Samsung revenue rose 14% and HBM4 prices could double by 2027, per Morningstar
Samsung Electronics posted a preliminary September quarter revenue of KRW 195 trillion with a 55% operating margin, rising 14% and 289 basis points sequentially, Morningstar reported. Shares remained flat following the October 8 release as conventional memory pricing neared its peak, while long-term supply agreements for 2027 point toward high-bandwidth memory prices more than doubling.
September Quarter Earnings Meet Morningstar Forecasts
The preliminary figures for the September quarter met forecasts set by Morningstar equity research. Conventional DRAM and NAND prices rose 17% and 10% sequentially, slowing down from 45% and 53% gains in the prior quarter. Customer pushback and ongoing long-term agreements drove this deceleration in spot pricing growth.
Samsung will report its complete financial results on October 29.
Escalating HBM4 Pricing Pressures for 2027
Supply negotiations for 2027 point toward high-bandwidth memory prices doubling, well above initial forecasts of a 32% increase. Samsung reportedly proposed asking prices in the mid-to-high USD 4 range per gigabit for HBM4, triple the roughly USD 1.50 per gigabit cost of current HBM3E products.
TrendForce estimated on September 29 that the global HBM market blended average selling price will rise 121 percent year-on-year in 2027. This pricing pressure stems from tight wafer capacity shared by standard DRAM and advanced AI memory.
Big Tech Companies Shift to Guaranteed Volume Contracts
NVIDIA, Google, and Microsoft are among the big tech companies signing these contracts. Flipping the traditional model of quarterly spot deals, buyers pay for guaranteed volume while suppliers secure predictable revenue visibility.
HBM4 Stack Height Reduction Improves Output Yields
Samsung reported a reduction in HBM4 stack height, which reflects tight supply constraints rather than technological delays. Fewer layers increase final output yields and strengthen near-term revenue. However, Morningstar noted that advances in Chinese DRAM technology, such as CXMT’s early LPDDR6 commercialization, are narrowing the gap with market leaders and raising the risk of an earlier-than-expected memory downturn.
Morningstar maintained its fair value estimate of KRW 310,000 for Samsung, viewing shares as fairly valued while keeping a cautious stance on long-term cyclicality.