Samsung Electronics Co., Ltd.

Record profitability (good/surprising): - Samsung reported Q3 2026 revenue of KRW 195.3T and operating profit of KRW 107.4T, both up sequentially (rev +14%, op +20%)—and operating profit exceeded KRW 100T quarterly for the first time globally. - Operating margin improved to 55% (from 52% prior quarter). - Net profit KRW 75.1T (+5% QoQ); EPS KRW 11,462 (common) / 11,492 (preferred) (+6% QoQ). - Key driver: Memory strength (HBM expansion + strong server demand); other segments were mixed (System LSI mobile weakness; Foundry recovery improving; MX and Display pressured by cost/exchange/range effects).

Outlook: strong DS-led growth but macro/component-cost pressure persists (good + challenges): - Q4 2026: Expect company-wide earnings growth, mainly from DS, but DS faces macro uncertainty and rising component costs. - Memory (DS) view: AI infra build-out remains strong; plan to expand HBM4, plus high-performance DDR5, QLC SSDs, and server SSDs. - Foundry: Earnings growth expected via scaling advanced nodes (notably advanced 4-nano mass production ramp) and continued 2-nano order wins. - Display: Demand uncertainty persists, but company targets premium product demand and profitability via mass-production capability. - System LSI: Continued mobile demand slowdown expected through Q4 and into next year; strategy is profitability via higher-value mix and 200MP image sensor adoption + custom SoCs.

Memory 2028 supply tightness expectation & investment reality check (important + “surprising” risk): - Management expects tight memory supply to continue into 2028, not ease quickly—citing: - Supply capacity additions won’t translate quickly into bit growth due to long fab/equipment lead times and higher construction/equipment costs. - HBM structural constraints: as HBM generations ramp (HBM4E/HBM5), larger die size and more layers plus increased shift from conventional DRAM to HBM act as physical supply constraints. - They also noted 2027 higher CapEx may still not materially increase 2028 bit supply, despite industry expectations of shortage. - Opportunity: continued HBM4 leadership and ongoing AI infrastructure demand. - Risk: if AI/semicap spending timing shifts, tight supply could still persist longer than markets anticipate, impacting demand-supply balance and pricing.