[Click eStock] "Samsung Electronics Expected to Enter Upward Cycle in Q4"

On the 13th, KB Securities maintained its 'Buy' rating and target price of 95,000 KRW for Samsung Electronics, forecasting that the company will enter an upward cycle starting from the fourth quarter of this year.

Dongwon Kim, a researcher at KB Securities, stated, "From the third quarter, high-value-added DRAM (HBM, DDR5) sales accounted for 35% of total DRAM sales, marking an upward turn for the first time in two years since the third quarter of 2021. NAND prices are also expected to rebound starting in September due to expanded production cuts and the halt of price reductions, reversing the trend for the first time in two years since the third quarter of 2021." He added, "By the end of the year, DRAM and NAND inventories are expected to decrease by 50-60% compared to the second quarter, approaching normal levels." He further noted, "From the fourth quarter, there is a high possibility of reversal of the accumulated memory semiconductor inventory valuation loss amounting to about 3 trillion KRW, which will act as an upward factor for future earnings estimates."

It is estimated that Samsung Electronics has almost completed pre-orders for next year's high-bandwidth memory (HBM) volume. Although Samsung Electronics' HBM production capacity is expected to double compared to the previous year, demand is anticipated to exceed supply by 2 to 3 times. Researcher Kim predicted, "Especially from the third quarter of next year, Samsung Electronics is expected to start turnkey supply of HBM (foundry, memory semiconductors, 2.5D packaging), which will significantly increase order volumes compared to standalone HBM supply."

The memory semiconductor market is expected to experience a steep upward cycle starting next year as supply-demand imbalances caused by supply reductions become apparent from the end of the fourth quarter. Kim explained, "DRAM will see supply reductions of existing DRAM (DDR4) due to expanded production capacity of high-value-added products such as HBM and DDR5, leading to supply-demand imbalances. NAND prices will rebound due to 40-50% production cuts, 30% reduction in capital investment, and the halt of price reductions. Inventories, which peaked in the second quarter, are expected to approach normal levels by the end of the year."

Expansion of new customers due to next-generation memory product production is also anticipated. Kim said, "Starting next year, Samsung Electronics is expected to begin full-scale production of next-generation memory products optimized for expanding AI server applications, such as GDDR7, CXL, and PIM, which will highlight its strength in expanding new customer bases in the future."

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