"Biggest 'Supply Cliff' in 70 Years of Memory History Approaching... Now Is the Time to Buy Samsung Electronics" [Click eStock]

On July 16, KB Securities stated that the recent decline in Samsung Electronics' stock price is a temporary phenomenon caused by weakened investor sentiment, not a deterioration of the company's fundamentals. The firm emphasized that, from a medium- to long-term perspective, this should be seen as a buying opportunity.

In a report released that day, Kim Dongwon, Head of Research at KB Securities, said, "The core fundamentals—the long-term growth potential of the artificial intelligence (AI) infrastructure industry and the shortage of memory supply—have not changed compared to a month ago. The recent stock price correction is considered to be a result of weakened investor confidence rather than changes in earnings or the structure of the memory industry."

Next year is expected to mark the most severe supply constraints in the 70-year history of the memory semiconductor industry. The share of high-bandwidth memory (HBM) in global DRAM wafer production is projected to more than double, rising from 15% in 2026 to 34% in 2027. This means that most new production capacity will be concentrated in HBM, making it essentially impossible to expand the supply of general-purpose memory. As a result, the supply shortage felt by ordinary customers is expected to intensify, moving beyond a simple supply-demand imbalance to a near supply cliff.

Kim added, "The U.S. Federal Energy Regulatory Commission (FERC) recently streamlined the grid connection process—the biggest bottleneck for building AI data centers—through a fast-track procedure. This is expected to reduce the grid connection period from more than five years to just one to two years." He further explained, "Major U.S. Big Tech companies are also investing in their own power generation facilities, which is accelerating power acquisition timelines. As a result, the speed of AI data center construction could be more than twice as fast as before."

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