Samsung Electronics and SK Hynix experienced significant stock declines as semiconductor peak-out concerns emerged in South Korea's market. Samsung closed at 277,500 won, down 18,500 won (6.25%), while SK Hynix fell 25,000 won (5.68%) to 2,076,000 won, marking two-day drops of 12.7% and 11.4% respectively. The declines followed growing doubts about the sustainability of memory price increases that had driven the semiconductor super-cycle. Analysts are divided on the sector's trajectory, with Kiwoom Securities cutting Samsung's target price by 9.3% while other brokerages maintained bullish outlooks citing continued AI-driven demand growth.
Kiwoom Securities Lowers Samsung Target Price to 390,000 Won
Kiwoom Securities adjusted Samsung Electronics' target price from 430,000 won to 390,000 won, representing a 9.3% reduction. Park Yu-ak, a Kiwoom Securities researcher, stated that PC and smartphone companies are shifting to a conservative stance on additional memory purchases. Park noted that second-half memory price increases appear unlikely to exceed expectations, projecting that Samsung's stock will experience expanded volatility due to changes in the memory industry. This marked the second target price reduction for Samsung by a domestic securities firm in 2025, following an adjustment in March during the early stages of Middle East conflicts.
KB Securities and IBK Investment Raise Samsung Price Targets
KB Securities raised Samsung Electronics' target price from 550,000 won to 600,000 won, while IBK Investment Securities increased its target from 350,000 to 460,000 won. Kim Dong-won, head of KB Securities' research division, characterized recent AI concerns as noise, stating that excessive worries present buying opportunities. Kim projected global AI investment will expand from $800 billion this year to $1.1 trillion next year and $1.5 trillion by 2028, predicting memory supply shortages will persist long-term. He forecast memory semiconductor demand will grow 150-fold as AI applications diversify. Additional positive factors cited included anticipated share buyback cancellations, special dividends, and performance-based share purchases in the second half.
Analysts Forecast AI Investment Growth Through 2028
Market consensus maintains that discussing semiconductor peak conditions remains premature. KB Securities' analysis projected memory supply shortage conditions will intensify rather than ease. The firm identified shareholder return policy materialization and treasury stock purchases for performance compensation as upside catalysts. Kim Dong-won stated that memory supply shortages will become prolonged as global AI investment scales from $800 billion in the current year to $1.5 trillion by 2028, with memory semiconductor demand expected to increase 150-fold through diversification of AI application fields.
FAQ
What caused Samsung Electronics and SK Hynix stocks to decline?
The stocks fell due to concerns about semiconductor peak-out, with doubts emerging about the sustainability of memory price increases. Samsung closed at 277,500 won (down 6.25%) and SK Hynix at 2,076,000 won (down 5.68%), marking two-day declines of 12.7% and 11.4% respectively.
Why did Kiwoom Securities lower Samsung's target price?
Kiwoom Securities reduced Samsung's target from 430,000 won to 390,000 won (9.3% cut) because PC and smartphone companies are adopting conservative positions on additional memory purchases, with second-half earnings per share growth expected to slow and memory price increases unlikely to exceed expectations.
What is KB Securities' outlook on Samsung Electronics?
KB Securities raised Samsung's target price from 550,000 won to 600,000 won, projecting global AI investment will grow from $800 billion this year to $1.5 trillion by 2028, with memory semiconductor demand expected to increase 150-fold as AI applications diversify, making current concerns about AI a buying opportunity.
