Samsung Electronics will announce its Q2 2026 preliminary results on July 7, with the market viewing this release as a turning point to gauge whether the artificial intelligence memory supercycle will continue or decline. This marks the first quarter where AI semiconductor demand surge is fully reflected in quarterly revenue. Securities firms consider the management messages on second-half HBM shipment outlook, long-term supply agreements (LTA), and shareholder return policies at the end-of-July conference call more critical than the operating profit figure itself for determining future Korean stocks direction.
Analysts Prioritize Conference Call Guidance Over Q2 Earnings Numbers
Market attention has already shifted from the earnings figures to the conference call scheduled for the end of July. Securities firms explain that since the earnings numbers are largely priced into the stock, management messages at the conference call will likely determine short-term stock direction. Key focus areas include second-half HBM shipment plans, LTA progress, HBM4 mass production schedule, next year's HBM price negotiation direction, Device Solutions (DS) division performance guidance, and additional shareholder return policies such as treasury stock buybacks and dividends. Analysts note that if HBM supply expansion and customer acquisition plans become concrete, it could improve investment sentiment across the semiconductor sector.
Q2 Consensus Projects 170 Trillion Won Revenue and 85 Trillion Won Operating Profit
According to securities firms, Samsung Electronics' Q2 consensus (average of securities firm estimates) stands at approximately 170 trillion won in revenue and around 85 trillion won in operating profit. These figures represent year-over-year increases of over 130% and nearly 1700% respectively, expected to rewrite record-high performance. Son In-jun, researcher at Yuanta Securities, stated, "DS division operating profit is expected to record 81.6 trillion won, up 52% from the previous quarter, leading company-wide performance growth," adding, "Memory division operating profit is expected to reach 83.1 trillion won as customer competition to secure memory inventory has increased pricing negotiation power."
Son further explained, "Samsung Electronics is estimated to have recorded a higher average selling price (ASP) than competitors based on aggressive price increase policies," noting, "If HBM4 preemptive shipment effects and long-term supply agreement (LTA) negotiations with major data center customers are finalized in Q3, more favorable pricing conditions are likely to have been established." Son projected that shareholder return competition among memory companies will intensify in the second half, stating, "Samsung Electronics is expected to use 50% of annual free cash flow (FCF) for shareholder returns centered on treasury stock cancellation," adding, "Large-scale shareholder return policies could serve as a revaluation factor for the stock, which has been relatively weak recently."
Memory Cycle Assessed as Early-to-Mid Phase with Supply Constraints Through 2027
Securities firms analyze that the memory market has not yet reached the mid-cycle phase. While HBM and server DRAM demand is rapidly increasing due to AI investment expansion, supply expansion remains limited due to cleanroom shortages, making it difficult for supply to keep pace with demand growth at least until Q4 next year. Kim Sun-woo, researcher at Meritz Securities, stated, "Memory price increases are likely to continue until year-end," adding, "Memory market supply shortages are expected to persist until the end of next year due to supply constraints from cleanroom shortages."
Kim explained, "While the proportion of consumer (B2C) memory such as smartphones is gradually shrinking, AI-centered memory demand is rapidly expanding," noting, "Cloud service providers (CSPs) are expanding LTAs and strategic cooperation centered on HBM and server DRAM to secure AI infrastructure, and will move to secure memory in various ways until year-end." Lee Jong-wook, researcher at Samsung Securities, diagnosed that the memory market remains in the "first half of the cycle."
Lee stated, "Most concerns raised after DRAM price surges and semiconductor operating profit improvements — hyperscaler excess capacity concerns, AI model efficiency controversies, domestic strike risks, investment expansion burdens — are entering a resolution phase," explaining, "Meanwhile, agent AI demand and cloud companies' AI revenue have steadily grown, and customers continue to demand higher-performance HBM and large-capacity server DRAM." Lee assessed, "While second-half DRAM price increases may slow somewhat, suppliers have not yet entered full-scale expansion," adding, "Samsung Electronics' 2100 trillion won investment plan in the memory sector through 2040 and early activation plans for Pyeongtaek P5 and P5-2 are evidence that the company views mid-to-long-term memory demand positively."
FAQ
Q: What will Samsung Electronics announce on July 7?
A: Samsung Electronics will announce its Q2 2026 preliminary results on July 7, with consensus estimates projecting approximately 170 trillion won in revenue and around 85 trillion won in operating profit.
Q: Why do analysts consider the conference call more important than the earnings numbers?
A: Securities firms explain that the earnings numbers are largely priced into Samsung Electronics' stock, so management messages on second-half HBM shipment outlook, long-term supply agreements, and shareholder return policies at the end-of-July conference call will likely determine short-term stock direction.
Q: How long do analysts expect memory supply constraints to continue?
A: Analysts project that cleanroom shortages will limit supply expansion, making it difficult for supply to keep pace with demand growth at least until Q4 2027, with memory price increases likely continuing until year-end 2026.
