Samsung Electronics and SK Hynix stocks rebounded sharply on July 3, with Samsung closing at 309,500 won (up 8.22%) and SK Hynix at 2,425,000 won (up 10.88%), driven by bargain buying after recent declines. Korean brokerage firms raised target prices for both companies, with Korea Investment Securities setting Samsung's target at 590,000 won and KB Securities raising SK Hynix's target from 3.8 million won to 4.2 million won. Analysts cited solid semiconductor fundamentals despite recent AI peak-out concerns and macro uncertainties, projecting memory supply shortages to persist through 2028 as global Big Tech demand expands.
Korean Brokerages Raise Samsung and SK Hynix Target Prices
Korea Investment Securities raised Samsung Electronics' target price to 590,000 won, citing anticipated recovery in high-bandwidth memory (HBM) competitiveness and sustained average selling price (ASP) advantages. Researcher Chae Min-sook stated that with labor strike risks resolved, market attention will refocus on memory market conditions and HBM competitiveness, with HBM market share expansion and higher ASP versus competitors expected to drive earnings growth.
KB Securities increased SK Hynix's target price from 3.8 million won to 4.2 million won, reflecting projected memory price increases for 2026 (DRAM +199%, NAND +255%) and raising full-year operating profit estimates to 290 trillion won (2026) and 468 trillion won (2027). Researcher Kang Da-hyun noted that wafer production capacity for DRAM and NAND will grow only 7% and 4% respectively next year, while demand growth will reach 17% and 19%, intensifying memory supply shortages.
Sangsang Securities also raised SK Hynix's target price to 3.8 million won. Researcher Jung Min-kyu projected Q3 operating profit at 81.6 trillion won (up 23.3% quarter-over-quarter) and full-year revenue at 350.1 trillion won with operating profit of 275.7 trillion won, driven by expanded HBM volume and rising contract prices for general-purpose products in the second half.
Samsung Electronics Q2 Operating Profit Forecast at 86 Trillion Won
Samsung Electronics' Q2 revenue is forecast at 178.7 trillion won with operating profit of 86 trillion won, representing year-over-year increases of 140% and 1,740% respectively and exceeding market consensus of 85 trillion won. Korea Investment Securities adjusted its Q2 operating profit estimate from 96 trillion won to 86 trillion won to reflect employee stock compensation costs, clarifying this as an accounting adjustment rather than a deterioration in business conditions. Researcher Chae Min-sook emphasized that mid- to long-term profit visibility and sustainability are strengthening.
SK Hynix Q2 Operating Profit Projected at 69 Trillion Won
KB Securities forecast SK Hynix's Q2 operating profit at 69 trillion won (up 649% year-over-year) with an operating margin of 77%, and Q3 operating profit at 87 trillion won (up 662% year-over-year) with an operating margin of 82%. The projections indicate strengthening earnings momentum heading into the second half.
Researcher Kang Da-hyun stated that a full-scale memory procurement competition will be triggered from the second half as AI agent proliferation extends to edge devices including PCs and smartphones.
Analysts Project Memory Supply Shortages Through 2028
KB Securities projected that next year's wafer production capacity growth for DRAM and NAND will be limited to 7% and 4% respectively, while demand growth will reach 17% and 19%, deepening memory supply shortages in 2027. Global AI investment is expected to expand from $800 billion in 2026 to $1.5 trillion in 2028, with M7 (seven major US Big Tech companies) free cash flow anticipated to surge 91% year-over-year as AI monetization enters full swing.
Researcher Kang Da-hyun noted that memory demand has increased 100-fold since 2022 and is projected to increase another 100-fold over the next five years. The share of memory semiconductors within total AI investment is expected to rise vertically from 14% last year to 50% next year with the emergence of autonomous driving and humanoid robots.
Sangsang Securities researcher Jung Min-kyu identified foreign investor inflows following SK Hynix's American Depositary Receipt (ADR) listing and the narrowing of the valuation gap versus North American competitors as key variables to monitor.
FAQ
What target prices did Korean brokerages set for Samsung Electronics and SK Hynix stocks?
Korea Investment Securities set Samsung Electronics' target price at 590,000 won. KB Securities raised SK Hynix's target price from 3.8 million won to 4.2 million won. Sangsang Securities set SK Hynix's target price at 3.8 million won.
What are Samsung Electronics' Q2 earnings forecasts?
Samsung Electronics' Q2 revenue is forecast at 178.7 trillion won with operating profit of 86 trillion won, representing year-over-year increases of 140% and 1,740% respectively and exceeding the market consensus of 85 trillion won.
Why do analysts expect memory supply shortages to persist through 2028?
Analysts project that wafer production capacity growth for DRAM and NAND will be limited to 7% and 4% respectively in 2027, while demand growth will reach 17% and 19%. Global AI investment is expected to expand from $800 billion in 2026 to $1.5 trillion in 2028, with memory demand projected to increase 100-fold over the next five years following a 100-fold increase since 2022.
