Samsung Electronics (005930.KS) could pay a combined 70 trillion won ($50 billion) in cash dividends in the second half of this year on the back of improving memory chip earnings, according to a brokerage report. A prolonged shortage of conventional DRAM chips, caused by expanded production of high-bandwidth memory, is expected to lift profits and widen the room for shareholder returns.
Kim Dong-won, head of research at KB Securities, said in a report on the 1st that "assuming 110 trillion won in remaining shareholder-return funds for the three years from 2024 to 2026, the company could carry out 70 trillion won in cash dividends and 40 trillion won in share buybacks and cancellations."
Specifically, the report estimated cash dividends of 30 trillion won in the third quarter and 40 trillion won in the fourth quarter, assuming separate taxation of dividend income applies and the company meets a 25% payout ratio requirement. Funds left over after the dividends would still be ample enough for share cancellations, Kim said.
The next round of shareholder returns should also grow sharply as earnings rise. KB Securities expects Samsung Electronics to post quarterly operating profit averaging more than 100 trillion won in the second half, with annual operating profit reaching 368 trillion won this year and 555 trillion won next year. If the company again returns 50% of free cash flow under its next three-year shareholder-return policy, the total would expand more than fourfold to 600 trillion won from 140 trillion won over the most recent three years.
In the memory market, the expansion of HBM output was cited as a factor prolonging the shortage of conventional DRAM. According to the report, Samsung Electronics said at Korea Premium Week 2026 that HBM would account for more than one-third of global DRAM wafer capacity in 2027. KB Securities expects the share of capacity devoted to conventional DRAM, excluding HBM, to shrink to 65% this year and 59% next year from 73% last year.
HBM consumes more than three times as many wafers as conventional DRAM, meaning that every increase in HBM output eats into conventional DRAM supply capacity. KB Securities projected that even if the three DRAM makers, including Samsung Electronics, allocate 30% of total DRAM wafer input to HBM by the end of 2027, HBM would account for just 13% of supply in terms of storage capacity.
HBM4 is estimated to account for 80% of Samsung Electronics' HBM revenue next year, up from 40% this year. "HBM selling prices in 2027 are estimated to rise more than 100% from a year earlier," Kim said.
