KB Securities has set a target price of 600,000 won (approximately $400) for Samsung Electronics (005930.KS), projecting that 2027 will mark the tightest supply environment in the 70-year history of the semiconductor industry. The firm views Meta\u2019s massive artificial intelligence (AI) infrastructure investment as a powerful signal that will dispel market concerns about a potential peak-out.<\/p>\n
In a report released on the 13th, Kim Dong-won, Head of Research at KB Securities, stated: \u201cWith virtually no new general-purpose memory production capacity expansion in 2027, Big Tech companies will begin formalizing long-term supply agreements (LTAs) starting next year. New production volumes will be allocated first to Big Tech firms with LTAs, meaning the supply shortage felt by general customers will intensify to \u2018supply cliff\u2019 levels.\u201d<\/p>\n
The recent correction in Samsung Electronics\u2019 share price is attributed to a combination of concerns over the sustainability of AI investment\u2014sparked by Meta\u2019s data center leasing plans\u2014and debates over whether second-quarter earnings have peaked. However, Kim expects these concerns to be resolved once Meta formalizes its investment plans during its earnings announcement later this month.<\/p>\n
Meta plans to build 7GW of AI data center capacity this year, followed by an additional 7GW in 2027, securing a total of 14GW of AI computing infrastructure. Meta\u2019s AI investment this year is estimated at approximately 220 trillion won (approximately $146.8 billion), accounting for roughly 20% of total U.S. Big Tech investment. Kim emphasized: \u201cInvestors should take note of Meta CEO Mark Zuckerberg\u2019s recent comment in an interview that \u2018I don\u2019t think anyone feels like they have enough compute in the AI industry.\u2019\u201d<\/p>\n
Samsung Electronics\u2019 earnings improvement is expected to accelerate into the second half of the year. KB Securities forecasts Samsung\u2019s operating profit will reach 110 trillion won (approximately $73.4 billion) in the third quarter and 124 trillion won (approximately $82.8 billion) in the fourth quarter, representing a widening improvement compared to the second quarter.<\/p>\n
Meanwhile, SK Hynix\u2019s (000660.KS) planned U.S. American Depositary Receipt (ADR) listing is also cited as a catalyst that could drive a broader revaluation of South Korean semiconductor stocks. KB Securities expects that \u201cstrength in SK Hynix ADRs will create a chain effect, lifting the underlying shares and Samsung Electronics\u2019 stock price, driving a virtuous cycle of semiconductor re-rating.\u201d<\/p>\n
Target prices for Samsung Electronics from major securities firms are clustered as follows: KB Securities at 600,000 won, NH Investment & Securities (005940.KS) at 530,000 won (approximately $354), Samsung Securities (016360.KS) at 500,000 won (approximately $334), Eugene Investment & Securities (001200.KS) at 560,000 won (approximately $374), Hyundai Motor Securities (001500.KS) at 440,000 won (approximately $294), and DB Securities at 360,000 won (approximately $240).<\/p>\n
The Kospi\u2019s valuation remains at historically depressed levels. According to Bloomberg, as of the 9th, the Kospi\u2019s 12-month forward price-to-earnings ratio (PER) stood at 6.35x, lower than the 6.82x recorded during the global financial crisis in October 2008. This is roughly half of its 52-week high of 11.98x.<\/p>\n
The Kospi\u2019s undervaluation stems from corporate earnings far outpacing share price gains. Since the start of this year, the Kospi\u2019s 12-month forward earnings per share (EPS) estimates have been revised upward by approximately 170%, marking the largest increase since 2006. EPS estimates have been revised upward for 17 consecutive months, the longest streak in about nine years.<\/p>\n
The Kospi\u2019s PER is merely one-third of Taiwan\u2019s Taiex index PER, which has a high semiconductor weighting. With Samsung Electronics and SK Hynix accounting for more than half of the Kospi\u2019s market capitalization, corporate governance issues and cyclical earnings structures are identified as the primary causes of the so-called \u201cKorea Discount.\u201d<\/p>\n
Views among investors are divided. Francis Tan, Chief Asia Strategist at Indosuez Wealth Management, assessed that \u201cif exposure to these names is not already significant, this is a good time to secure portfolio growth elements linked to the AI theme.\u201d<\/p>\n
Conversely, Charu Chanana, Chief Investment Strategist at Saxo Markets, cautioned that \u201cSouth Korea needs evidence that the memory supercycle still has momentum,\u201d noting that undervaluation alone cannot be a reason to buy. Chanana warned: \u201cWhile many hyperscale cloud providers will continue massive spending this quarter, if they begin discussing cost optimization, that would be a signal that high prices are suppressing demand.\u201d<\/p>\n
Some experts also recommend a cautious approach, noting that the price-to-book ratios (PBR) of both Samsung Electronics and SK Hynix surpassed 2x for the first time this year, reaching all-time highs, and that on a price\/earnings-to-growth (PEG) basis, they are no longer significantly undervalued.<\/p>\n
Risk factors include the growing competitive threat from late entrants such as China\u2019s ChangXin Memory Technologies (CXMT) and the extreme volatility of semiconductor stocks. The prospect that memory prices could peak in mid-2027 also weighs on sentiment.<\/p>\n
Despite these concerns, KB Securities maintains a strong buy rating on Samsung Electronics, judging that Big Tech\u2019s AI investment has entered a paradigm-shifting phase that is creating structural demand.<\/p>\n","protected":false},"excerpt":{"rendered":"KB Securities has set a target price of 600,000 won (approximately $400) for Samsung Electronics (005930.KS), projecting that…\n","protected":false},"author":2,"featured_media":84120,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17],"tags":[2588,15470,2587,466,15606,8135,335,44697,15877,3534,127,276,223,642,275],"class_list":["post-84119","post","type-post","status-publish","format-standard","has-post-thumbnail","category-samsung","tag-artificial-intelligence","tag-changxin-memory-technologies","tag-high-bandwidth-memory","tag-kb-securities","tag-kim-dong-won","tag-korea-discount","tag-kospi","tag-long-term-supply-agreement","tag-meta","tag-micron-technology","tag-samsung","tag-samsung-electronics","tag-samsung-group","tag-semiconductor","tag-sk-hynix"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/84119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=84119"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/84119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/84120"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=84119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=84119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=84119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}