[Click eStock] "Samsung Electronics, Foundry Growth is Key to Evaluation"

Massive Investment Expected in Foundry Business to Offset Volatility in Memory Sector

[Asia Economy Reporter Minwoo Lee] An analysis has emerged that Samsung Electronics will address the volatility in its memory business through massive investments in foundry.

On the 1st, Samsung Securities gave Samsung Electronics a 'Buy' rating and raised the target price by 16.9% to 78,000 KRW. The closing price the previous day was 66,700 KRW. Although the memory market is expected to improve next year, if not reaching a super boom, Samsung's business model is judged to be sustainable enough to surpass market conditions.

Hwang Minseong, a researcher at Samsung Securities, said, "Samsung's DRAM division has earned 46% more profit over the past three years than Taiwan's TSMC during the same period. TSMC's highest profit margin is similar to Samsung DRAM's lowest profit margin. Although the DRAM business accounts for less than 15% of Samsung Electronics' total sales, TSMC's market capitalization is 21% higher," adding, "Ultimately, Samsung Electronics cannot avoid the risks caused by extreme volatility in the memory business, so other businesses must grow to mitigate this."

Samsung Securities analyzed that the foundry business is at the center of this strategy. Researcher Hwang stated, "Just as it is hard to believe that Micron, with a 20% DRAM market share, can beat Samsung Electronics, which holds a 50% share, it is also a difficult path for Samsung's foundry with a 20% share to surpass TSMC's 50% share," and added, "Although Samsung Electronics has not yet presented a concrete strategy, its financial strength, aggressive investment, process technology capabilities, and future integration of memory and logic are expected advantages." The analysis suggests that memory will improve issues in mass production, foundry will address unspecified problems, and process technology will be enhanced.

Furthermore, through the Samsung Electronics Investor Forum held on November 30, Samsung reaffirmed its investment plan worth 133 trillion KRW through 2030 and is expected to further differentiate itself with the MBCFET technology at the GAA (Gate All Around) stage starting from 3nm. Researcher Hwang explained, "In particular, future emphasis will be on technology that connects and stacks dies at the wafer level, which is considered a favorable opportunity for Samsung, as it operates both memory and logic businesses simultaneously."

This content was produced with the assistance of AI translation services.