[IR] Samsung Electronics (005930) – Q2 2024 Earnings Presentation / 2024-07-31

💡 3-Second Summary

In Q2 2024, Samsung Electronics posted consolidated revenue of KRW 74.07T and operating profit of KRW 10.44T, driven by expanded sales of high-value AI server memory and broad memory price increases. In H2 2024, the company plans to accelerate commercial sales of HBM3E and 1b-nm 32Gb DDR5 server modules while commencing mass production of 2nd-generation 3nm GAA to strengthen its market leadership.

📊 1. [Key Guidance & Quantitative Roadmap Summary]

[Q2 2024 Historical Performance (Confirmed Financials)]

• Consolidated Revenue: KRW 74.07T (+3% QoQ, +23% YoY)
• Operating Profit: KRW 10.44T (+KRW 3.84T QoQ, +KRW 9.78T YoY)
• Net Profit: KRW 9.84T (Net Margin: 13.3%, ROE: 11%)
• R&D Expenses: KRW 8.05T (10.9% of total revenue)
• Division Financial Breakdown (Revenue / Operating Profit):
  • DS (Device Solutions): KRW 28.56T (+94% YoY) / KRW 6.45T (YoY +KRW 10.81T)
    • Memory: KRW 21.74T (+142% YoY)
  • DX (Device eXperience): KRW 42.07T (+5% YoY) / KRW 2.72T
    • MX / Network: KRW 27.38T / KRW 2.23T
    • VD / DA: KRW 14.42T / KRW 0.49T
  • SDC (Samsung Display): KRW 7.65T / KRW 1.01T
  • Harman: KRW 3.62T / KRW 0.32T
• Balance Sheet & Cash Flow Highlights:
  • Net Cash Position: KRW 84.31T (Increased from KRW 81.89T in Q1 ’24)
  • Acquisition of Tangible Assets (Capex): KRW 11.94T executed in Q2 ’24
  • Key Financial Ratios: Current Ratio 258%, Debt-to-Equity Ratio 27%

[Quantitative & Strategic Roadmap (Forward-Looking)]

• H2 2024 Roadmap:
  • Memory: Expand commercial sales of HBM3E and 1b-nm 32Gb DDR5-based high-density server modules; optimize QLC lineups across all applications and expand AI server SSD sales.
  • Foundry: Commence mass production of sub-5nm and 2nd-generation 3nm GAA, targeting 2024 annual foundry revenue growth to exceed market growth.
  • System LSI: Prepare stable supply for Exynos 2500, expand 200MP image sensor adoption to telephoto cameras, supply DDI to North American clients, and initiate Q4 mass production of new server PMICs.
• Medium- to Long-Term Roadmap (FY2025–2028):
  • Foundry: Prepare 2nm mass production for 2025 and develop/distribute the 2nm GAA PDK to support customers’ full-scale product design activities; target a 4x increase in AI/HPC customer count and a 9x increase in revenue by 2028 compared with 2023.

🚀 2. [Business Strategies & Future Plans]

• Device Solutions (Memory / System LSI / Foundry):
  • Memory: With conventional DRAM/NAND bit supply constraints expected as production and sales of HBM and server DRAM increase, the business will focus on expanding sales of high-value products—including HBM3E, 1b-nm 32Gb DDR5 128GB modules, and AI server SSDs—to strengthen its market leadership.
  • System LSI: Focuses on securing stable flagship SoC supply, expanding 200MP sensors into telephoto cameras, and broadening PMIC and DDI product offerings.
  • Foundry: Plans to leverage 2nd-generation 3nm GAA mass production to drive revenue and prepare 2025 2nm GAA mass production alongside PDK distribution to support customers’ product design activities and achieve long-term growth targets.
• Samsung Display (SDC):
  • Small- and medium-sized panel business plans to meet customer flagship smartphone and AI upgrade demand through the stable supply of improved panels with lower power consumption and higher brightness. Large panel business will operate high-margin QD-OLED lines and expand monitor lineups to improve profitability.
• Device eXperience (MX / VD / DA / Harman):
  • MX: Drive flagship revenue growth through new foldable models (enhanced durability, battery, camera) featuring Galaxy AI and sustained Galaxy S24 marketing, while launching new premium form factors including Galaxy Ring and Watch Ultra.
  • VD / DA: Preempt peak season demand with premium/large TVs, strengthen TV service platform competitiveness, and scale global distribution of Bespoke AI appliances and B2B HVAC systems.
  • Harman: Secure new orders in automotive display solutions and expand market leadership in portable/TWS consumer audio.

📝 Editor’s Comment (Management Perspective)

① Analysis of Management’s Core Growth Logic Management identifies sustained AI infrastructure investments by hyperscalers and tech enterprises as a core catalyst driving strong demand across both HBM and conventional server memory (DRAM and server SSDs). In response to conventional DRAM/NAND bit supply constraints resulting from increased production and sales of HBM and server DRAM, Samsung’s strategy is to prioritize high-value product sales—focusing on HBM3E, 1b-nm 32Gb DDR5 high-density server modules, and AI server SSDs—to strengthen its market leadership. Concurrently, Foundry aims to utilize 2nd-generation 3nm GAA ramp-up and 2025 2nm readiness to broaden its AI/HPC customer base for medium- to long-term growth.

② Key Tracking Points To verify whether management’s high-value memory mix and leading-edge foundry strategies translate into verified business execution, the primary tracking points include:

• HBM3E & 1b-nm High-Density Server DDR5 Ramp-Up: Progress in HBM3E commercial shipments and the sales expansion of 1b-nm 32Gb-based 128GB high-density server DDR5 modules in subsequent quarterly earnings presentations.
• Foundry 3nm 2nd-Gen Mass Production & 2nm Customer Design Progress: Stable production execution of 2nd-gen 3nm GAA and the progress of customer product design activities supported by 2nm GAA PDK distribution in official IR materials.

📢 Disclaimer & Source Information

Source: This content was structured and generated based on official financial fact data from the company’s IR presentations and regulatory press releases.

Investment Risk Warning: This content is provided solely for informational and linguistic reference purposes. Forward-looking guidance contained in IR materials represents corporate estimates and does not guarantee future financial performance. Under no circumstances does this constitute financial advice or a recommendation to buy/sell specific securities. All investment decisions and financial liabilities rest entirely with the investor.

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