▲AI PRISM* Customized Economic Briefing
*Editor's Note: 'AI PRISM' (Personalized Report & Insight Summarizing Media) is an "artificial intelligence (AI)-based customized news recommendation and summary service" developed with support from the Korea Press Foundation. It selects and provides six customized news items by reader type.
[Key Issue Briefing]
■ DS-DX Polarization: In contrast to the record-breaking results of Samsung Electronics' (005930.KS) semiconductor (DS) division, its smartphone and home appliance finished-goods (DX) division faced headwinds from surging memory costs, sharply worsening its profitability. As the performance bonus gap between DS and DX widened, the divide is spilling over into internal conflict, with a labor union centered on DX employees announcing plans for a rally.
■ Samsung's 100 Trillion Won Record: Even after reflecting performance bonus provisions in the second quarter this year, Samsung Electronics opened the era of quarterly operating profit exceeding 100 trillion won, a first among all global companies including big tech. Observers say the rapid expansion of AI data center demand drove the memory market into a phase of structural high growth, and the investment industry forecasts that the earnings improvement trend will continue with the full-scale shipment of sixth-generation high-bandwidth memory (HBM) HBM4 in the second half.
■ Hyundai Card AI Innovation: The data structuring strategy Hyundai Card has pursued for more than a decade is now shining in earnest with the arrival of the AI era. Through its proprietary AI platform 'UNIVERSE,' the company has shortened marketing design time from up to three days to 20-40 minutes and boosted response rates by up to six times compared with before.
[News of Interest to Corporate CEOs]
1. Samsung Mobile and Appliances 'Sluggish'... DS-DX Performance Polarizes
- Key Summary: Unlike Samsung Electronics' semiconductor (DS) division, which posted record-high results, the second-quarter operating profit of the smartphone and home appliance finished-goods (DX) division is expected to remain in the range of 400 billion to 900 billion won based on brokerage estimates, with some raising the possibility of a loss in the 1 trillion won range. This is because the share of memory in smartphone costs soared from 14% in the first quarter of last year to as much as 40% recently, squeezing profitability. Samsung Electronics has signaled a price increase for its new foldable phone 'Galaxy Z8' series, to be unveiled this month. As the performance gap between DS and DX widens, Donghaeng, the Samsung Electronics labor union centered on DX employees, plans to hold a rally of up to 3,000 people near the Suwon business site on the 16th. Meanwhile, Samsung Electronics plans to build a physical AI hub in Gumi, North Gyeongsang Province, including a 19 trillion won humanoid robot mass-production line, and to convert all its domestic and overseas production plants into 'AI autonomous factories' by 2030.
2. Samsung's Q2 Operating Profit Tops 100 Trillion Won for First Time, 'World No. 1'
- Key Summary: Samsung Electronics' second-quarter consolidated revenue was 171 trillion won and operating profit was 89.4 trillion won, up 129.3% and 1,810.3% respectively from a year earlier, setting a record high for the third consecutive quarter. Excluding provisions of 15 trillion to 17 trillion won for performance bonus funds (10.5% of business profit), actual operating profit reached 104 trillion to 106 trillion won, surpassing both Nvidia's all-time high operating profit of $53.5 billion and Apple's $50.8 billion—an unprecedented record among all companies worldwide. In the second half, profitability is expected to improve further as shipments of HBM4, which will be mounted on Nvidia's next-generation AI accelerators, begin in earnest. Samsung Electronics posted 146.6 trillion won in operating profit through the first half, and for the full year, profit of more than 350 trillion won is anticipated.
3. 500 Billion Won Invested in Data Structuring... Marketing Design from 3 Days to 40 Minutes
- Key Summary: Hyundai Card combined Mother AI and Allocation AI on its proprietary AI platform 'UNIVERSE,' shortening marketing design time from up to three days to 20-40 minutes and raising response rates by up to six times compared with before. Behind these results lies a long-term strategy in which, since Hyundai Card Vice Chairman Chung Tae-young declared 'Digital Hyundai Card' in 2015, the company has invested more than 1 trillion won in AI and data science, with 500 billion won of that concentrated on data structuring. Hyundai Card built a 'PDI tag' system that classifies vast data such as card payment records, location, and time by customer disposition and behavioral characteristics, creating a data environment that AI can immediately use. On this basis, Hyundai Card membership grew from 11.04 million in 2022 to 12.67 million last year, and its personal credit sales market share expanded from 16% to 17.5%.
[News for Corporate CEOs' Reference]
4. LG Energy Solution (373220.KS) Returns to Profit in Q2... Revenue Tops 7 Trillion Won
- Key Summary: LG Energy Solution recorded second-quarter consolidated revenue of 7.5602 trillion won, driven by expanded volumes of mid- to low-priced electric vehicle batteries and energy storage systems (ESS), surpassing quarterly revenue of 7 trillion won for the first time in two and a half years since the fourth quarter of 2023. Second-quarter operating profit was 113.3 billion won, down 77% from a year earlier, but the company emerged from operating losses that had continued for two consecutive quarters since the fourth quarter of last year. Excluding the advanced manufacturing production credit (AMPC) portion under the U.S. Inflation Reduction Act (IRA), it posted a loss of 127.7 billion won, with the delayed operation of Ultium Cells, its joint venture with General Motors (GM), analyzed as having burdened profitability. Lee Jin-myung, a researcher at Shinhan Investment, forecast that second-half ESS revenue would increase 46% compared with the first half.
- Key Summary: LG Electronics recorded second-quarter consolidated revenue of 23.8297 trillion won and operating profit of 1.5788 trillion won, breaking its record highs for the second quarter in both revenue and operating profit, and continuing operating profit in the 1 trillion won range for the second consecutive quarter. Expanded sales of premium infotainment in the vehicle solutions (VS) business and increased sales of air conditioners and heat pumps in the heating, ventilation, and air conditioning (HVAC) business led the results, while platform revenue based on home appliance subscriptions and the TV operating system (OS) 'webOS' also grew. In addition, a refund of about 300 billion won on tariffs paid on U.S. export volumes last year was reflected as a one-off in this quarter. The market is watching the AI data center cooling business and robotics as LG Electronics' next growth engines.
6. "AIDC and Chips Instead of Plants"... Shift in K-Construction's Overseas Order Landscape
- Key Summary: From January to May this year, domestic construction firms' overseas orders in the Asian region reached $1.85 billion, up 17% from a year earlier, while orders in the Middle East region over the same period plunged about 90%, shifting the center of gravity of overseas orders toward Asia. Samsung C&T (028260.KS) won a $217 million (about 331.5 billion won) AI data center (AIDC) project in Malaysia and secured a $151 million (about 229.1 billion won) new Samsung Electronics semiconductor plant construction project in Vietnam, with advanced-industry infrastructure establishing itself as a new source of business. Meanwhile, POSCO E&C won a $317 million (about 484.2 billion won) ethane terminal project in Thailand, and Incheon International Airport Corporation won the modernization and operation project for Uzbekistan's Urgench International Airport through a $134 million public-private partnership (PPP) scheme, newly pioneering the Central Asian market. The construction industry says that, as global big tech's expansion of AI investment and countries' competition to attract advanced manufacturing facilities continue, the shift from energy plant-centered to AI infrastructure-centered orders is not a temporary phenomenon but a structural change.
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