Is 800,000 Won for Samsung and 7 Million Won for SK hynix Possible?... The Semiconductor Formula Changed by Micron

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There is analysis suggesting that the strong stock revaluation of Micron Technology, a U.S. memory semiconductor company, driven by structural changes in the era of artificial intelligence (AI) and long-term supply agreements (LTAs), could also significantly enhance the potential for further stock price gains for Samsung Electronics and SK hynix.

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According to the financial investment industry on May 27, global investment bank UBS maintained its 'buy' recommendation for Micron, while raising its target price more than threefold—from $535 to $1,625. Following this bold outlook, Micron's stock price surged 19% in a single day.

UBS cited the full-fledged implementation of LTAs as the main reason for its higher target price. It explained that with up to 30% of industry-wide DRAM (DDR) volume soon to be secured under long-term contracts, short-term sales volatility is reduced, providing greater demand visibility and a stable earnings profile.

UBS also raised all of its future earnings estimates for Micron. In particular, it applied a forward price-to-earnings ratio (PER) of 15 times—a level for growth stocks—to the expected 2029 earnings per share (EPS) of $117. This justifies the revaluation of Micron from a traditional cyclical manufacturer to a stable AI-driven growth stock.

If the so-called 'Micron 15x Rule' is applied to the domestic stock market, there is analysis that the stock prices of Samsung Electronics and SK hynix could more than double from current levels. The current forward PER for these two Korean semiconductor companies remains at around 6 to 7 times, indicating a significant undervaluation compared to overseas competitors.

According to NH Investment & Securities, Samsung Electronics' expected EPS for 2026 is 46,772 won. By simply applying a PER of 15, the stock price would be calculated at 701,500 won. Based on projected earnings for 2027 and 2028, the estimates are 748,000 won and 796,000 won, respectively. For SK hynix, the expected EPS for 2026 is 293,767 won; multiplying this by a PER of 15 yields a stock price estimate of 4,406,000 won. Based on 2027 and 2028 projections, the stock price estimates rise to 6,785,000 won and 7,586,000 won, respectively.

Domestic securities firms are currently setting the highest target prices for both companies using a PER of about 11. Korea Investment & Securities has set a target price of 570,000 won for Samsung Electronics, while Mirae Asset Securities has set a target price of 3,800,000 won for SK hynix.

Kim Younggeon, an analyst at Mirae Asset, explained, "Recently, the pace of increase in order backlogs for big tech companies' data centers has exceeded the pace of capital expenditure (CAPEX) increases," adding, "Memory LTA agreements are expanding to support stable facility investments." He went on to say, "As we move into the second half of the year, it is highly likely that new valuation benchmarks will be established, taking into account next year's valuations," and emphasized, "Although stock prices have already risen significantly in absolute terms, there is still ample upside potential remaining."

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