Samsung Group flags flutter in the wind at Samsung Electronics’ headquarters in Seocho-gu, Seoul. News1
Samsung Electronics (005930.KS) shares have shown sharp volatility, but their growth trajectory remains intact, according to a securities firm outlook.
Kim Dong-won, an analyst at KB Securities, said in a report on the 15th, “Samsung Electronics’ share price has recently fallen 30 percent from its recent peak, reflecting concerns about a slowdown in AI investment. However, the industry’s core fundamentals—the long-term growth of the AI infrastructure industry and a shortage of memory supply—have not changed compared to a month ago.” KB Securities issued a “buy” rating and a target price of 600,000 won for Samsung Electronics on the 13th.
“The recent price correction is judged to reflect a contraction in investment sentiment more than any change in earnings or the structure of the memory industry,” Kim said. “Therefore, this correction is a price adjustment created by excessive market concern rather than damage to fundamentals, and from a medium- to long-term perspective, it is rather expected to become a buying opportunity,” he added.
He forecast that next year will be the tightest supply period in the 70-year history of the memory chip industry. “The supply shortage is highly likely to continue at least until 2028, and in particular, aggressive investment centered on high-bandwidth memory (HBM) is expected to structurally constrain general-purpose DRAM production capacity,” Kim explained.
He added, “The share of HBM in global DRAM wafer production is expected to more than double from 15 percent this year to 34 percent next year. This means most of the new production capacity is concentrated on HBM, and the expansion of general-purpose memory supply is effectively expected to be limited.” He also analyzed that “as a result, the memory supply shortage felt by ordinary customers is expected to intensify beyond a simple tight supply-demand balance to a level close to a ‘supply cliff.'”
He also noted that the pace of AI data center construction in the United States is expected to more than double. “The U.S. Federal Energy Regulatory Commission (FERC) recently streamlined the power grid connection process—which had been the biggest bottleneck for AI data center construction—into a fast track, so the power grid connection period, which previously took more than five years, is expected to be shortened to about one to two years,” Kim said. “Accordingly, U.S. Big Tech companies can advance their power procurement schedules while simultaneously investing in their own power generation facilities, and the pace of AI data center construction is also expected to more than double compared to before.”
Samsung Electronics shares hit a peak of 362,500 won on the 18th of last month, but fell 29.8 percent from that peak to close at 254,500 won on the 13th of this month. However, starting with the 14th, when they rebounded 3.34 percent (263,000 won), they also closed at 279,500 won on that day, up 6.24 percent from the previous trading session.
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