Samsung Electronics’ DS division has decided it wants an operating profit margin of more than 50 per cent.
Industry chatter on 18 February 2026 says the semiconductor unit is reorganising its product portfolio to shift production and sales towards lines that can clear that 50 per cent bar.
Many firms talk about improving product mix, but setting a hard margin target means someone is about to be told their pet product is a charity project.
An industry insider said: “The focus will be on high-yield products, and products with an operating profit margin of less than 50 per cent will be reduced in production or excluded from the core portfolio”, and “production line adjustments or sales strategies may be revised accordingly.”
The awkward test case is Samsung’s 10nm-class sixth-generation DRAM, known as 1c, for which the company is building capacity.
Yield is the unglamorous bit that decides whether the finance team claps or cries, and it is hard to brag about margins when too many chips are not fit to ship.
The yield for 1c DRAM is said to be around 60 per cent, which is miles away from the comfy 80 to 90 per cent range that lets you print money.
That means DRAM allocation is likely to be managed by use case, with servers, smartphones, and PCs all competing for supply while factory engineers grumble.
Server DRAM is said to be clearing 50 per cent margins thanks to strong demand, while high-bandwidth memory is apparently less profitable right now because yields are still not where they need to be.
So the near-term play is to push server DRAM harder, then ramp HBM once yields stop behaving like a practical joke.
An industry insider told ET News: “Samsung Electronics’ DRAM and HBM supply volume can be adjusted, so the impact on the market will be significant” and “price changes will be inevitable depending on supply volume”.
NAND gets the same treatment, with Samsung expected to focus production on its newer V8 and V9 generations, where the margins look less embarrassing.
The company is reportedly lifting V8 utilisation and speeding up the V9 conversion, while older generations get shoved along the conveyor towards the exit.
On system semiconductors, Samsung is expected to chase orders on the 5nm and 8nm processes, the grown-up choice if you want stable yield and a margin you can say out loud.
The 2nm node is still presented as the shiny future, but for now, the plan seems to be “stabilise yield” and “improve technology”, which is what you say when it is not ready.
By the fourth quarter, Samsung’s operating profit margin was 37.27 per cent, still trailing SK Hynix at 58.39 per cent, which is the sort of comparison that makes executives reach for new strategies.
Memory pricing has been running hot because AI infrastructure demand is outracing supply, so Samsung wants to tweak the portfolio while buyers are still paying up.
The industry expects memory prices to keep rising until the end of this year, with any slowdown pencilled in after new lines start full operation and the supply side catches up.
