[Click eStock] "Samsung Electronics, Semiconductor Market Bottoming Out in First Half of Next Year"

[Asia Economy Reporter Song Hwajeong] KB Securities maintained its 'Buy' rating and target price of 100,000 KRW for Samsung Electronics on the 16th, anticipating that the semiconductor market will hit bottom in the first half of next year.

Dongwon Kim, a researcher at KB Securities, stated, "Contrary to concerns, demand from customers in both memory and non-memory semiconductor sectors is expected to increase significantly compared to this year, making it highly likely that the semiconductor market will bottom out in the first half of next year." He explained, "Next year's DRAM demand is expected to increase by 20-23% year-over-year, mainly driven by the four major North American data center companies, surpassing Samsung Electronics' DRAM supply growth of 16%. Additionally, foundry sales are expected to increase by 25% next year, with demand exceeding supply."

As of December, the four major North American data center companies?Amazon, Microsoft, Meta, and others?are steadily increasing their memory semiconductor orders and maintaining an elevated purchasing pattern, contrary to previous expectations of order reductions. Researcher Kim analyzed, "Despite the semiconductor price decline cycle, the somewhat aggressive increase in DRAM orders next year can be reinterpreted as a positive outlook on memory semiconductor demand. The reason for the increase in orders from data center companies is that DRAM inventory has decreased by 30% compared to the previous quarter, and proactive server investments for building metaverse platforms are also influencing this."

The foundry sector has already secured orders for two years through 2023, so significant performance improvements are expected starting next year. Kim said, "Next year, Samsung Electronics' non-memory division sales and operating profit are expected to increase by 26% and 102% year-over-year, respectively, reaching 27.2 trillion KRW and 3.6 trillion KRW, driven by higher foundry utilization rates and improved 5nm production yields, achieving record-high performance." He added, "In particular, sales to Samsung Electronics' major foundry customers (Qualcomm, NVIDIA, IBM, etc.) are estimated to reach 10 trillion KRW next year." Kim also noted, "Samsung Electronics' current stock price has risen 12.8% from its low point but has fallen 6.5% since the beginning of the year, which will increase its relative attractiveness compared to SK Hynix and Micron in the global semiconductor sector."

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