"Samsung Electronics at 630,000 Won, SK hynix at 3.1 Million Won...Brokerages Keep Raising Target Prices"

Anticipation Builds for Samsung Electronics and SK hynix’s 188 Trillion Won Earnings
Brokerages Rapidly Raising Target Prices

The combined third-quarter operating profit forecast for Samsung Electronics and SK hynix is projected to surpass 188 trillion won, prompting a swift upward revision in expectations among domestic securities firms. With memory price hikes and soaring demand for high-bandwidth memory (HBM) for artificial intelligence (AI) servers driving results, securities companies are raising their target prices in succession, even suggesting that the memory supply shortage may persist into next year. However, the potential for renewed debate over a “semiconductor peak-out” remains a factor, depending on the pace of AI investment by global big-tech firms and whether the upward trend in memory prices slows.

On the 30th, as the KOSPI started on an upward trend, the real-time KOSPI and KOSDAQ indices were displayed on the electronic board in the dealing room at the Hana Bank headquarters in Jung-gu, Seoul. Photo by Yonhap News Agency

Samsung Electronics Forecasts Record-Breaking Quarterly Profit of 100 Trillion Won...SK hynix Also Expects All-Time High

According to financial information provider FnGuide on September 30, consensus estimates for Samsung Electronics’ third-quarter operating profit reached 110.2803 trillion won. This figure represents a dramatic 806% surge compared to the same period last year (12.1661 trillion won) and a significant 23% increase from the previous quarter (89.4924 trillion won). Should this estimate be realized, it would mark the first time in the company's history that Samsung’s single-quarter operating profit reaches the 100 trillion won milestone.

SK hynix is also set to achieve record-breaking results. The company’s third-quarter operating profit consensus amounts to 78.0577 trillion won, a 29% increase from the previous quarter (60.5426 trillion won). The combined third-quarter operating profit projections for both firms add up to 188.3380 trillion won, edging closer to the symbolic 200 trillion won mark.

The key drivers behind these unprecedented earnings expectations are undeniably the explosive surge in memory prices and the resulting supply-demand imbalance. According to market research firm TrendForce, the average selling price (ASP) of standard DRAM in the third quarter is expected to climb by 13-18% compared to the previous quarter, while NAND flash is projected to rise by 10-15%. In the market, this is attributed to exploding demand for AI servers and intensified competition among big-tech firms to secure memory, which has further solidified a supplier-favored market structure.

NH Investment & Securities, Eugene Investment & Securities: "Shortage Will Continue Until 2027"...Target Price Raised to 560,000 Won

In line with the anticipated record-breaking results, major domestic securities firms are swiftly raising their target prices for both companies. Yuanta Securities recently hiked Samsung Electronics’ target price from 530,000 won to 630,000 won, while Mirae Asset Securities raised theirs from 370,000 won to 400,000 won. For SK hynix, DB Securities suggested 2.3 million won, and Mirae Asset Securities projected 3.1 million won, raising market expectations even further.

In particular, NH Investment & Securities and Eugene Investment & Securities maintained their respective Samsung Electronics target prices at 530,000 won and 560,000 won, each recommending a “strong buy.” According to their reports, Samsung Electronics’ third-quarter revenue is forecast to reach 200.9 trillion won, up 133.5% year-on-year, with operating profit projected at 103 trillion to 105 trillion won.

Experts argue that recent market concerns over an AI investment peak-out are excessive. NH Investment & Securities analyzed, “AI investment has entered a new phase, expanding beyond hyperscalers to corporations and national-level initiatives. The spread of inference and AI agents is accelerating growth in CPU demand, which in turn is creating excess memory demand.” As a result, the memory supply shortage is expected to extend through 2027, while long-term supply agreements (LTAs) are set to become more robust. The average selling price (ASP) increase for HBM next year is also likely to exceed the previously estimated 45%.

Strong Won and DX Losses Present Challenges, but HBM4 and Enterprise eSSD Drive Results

Of course, not all factors are positive. The continued strength of the won—driven by a decline in the won-dollar exchange rate from the 1,440-won range to the 1,400-won range—along with rising component costs for smartphones and home appliances in the Device Experience (DX) and Mobile (MX) business divisions, are projected to result in an operating loss of approximately 1.8 trillion won. The inclusion of additional performance-based bonuses has also been cited as a factor prompting minor downward adjustments to near-term profit estimates.

Nevertheless, the dominant performance of the semiconductor (DS) division is more than offsetting these negatives. Operating profit for the DS segment alone in the third quarter is estimated at 104 trillion won, marking a quarter-over-quarter increase of over 17%. Price hikes for server DRAM and enterprise eSSD have led to a surge of about 17-18% for DRAM and 18-20% for NAND blended average prices, respectively. In addition, as ramp-up (production expansion) of sixth-generation HBM4 accelerates, its contribution to performance is increasing explosively.

Eugene Investment & Securities commented, “Samsung Electronics will showcase differentiated performance among its peer group, thanks to its turnkey production capabilities and unique pricing strategy. From the fourth quarter onward, the environment for negotiating HBM prices through 2027 will remain favorable to suppliers, suggesting there is ample room for further upgrades to earnings and share prices.” Furthermore, reduction in losses for the Foundry and System LSI divisions, heightened competitiveness in custom memory, and a potential reevaluation of shareholder return policies linked to the third-quarter results announcement are being interpreted as additional positive catalysts.

The Near-Term Inflection Point Is Micron’s Results...Macro Variables Like Treasury Yields and Oil Prices in Focus

All eyes in the market are now on the fourth-quarter FY results (June–August) of Micron Technology, the world’s third-largest memory supplier, to be announced on September 30 local time. Since Micron’s reporting period overlaps by about two months with the third quarter (July–September) of Korean semiconductor firms, it acts as a leading indicator for the overall memory industry’s circumstances and profitability.

If Micron’s revenue guidance and margins exceed market forecasts, the “semiconductor peak-out” worries that have been weighing on shares are expected to subside significantly. Conversely, if the selling price momentum stalls or margins decline, short-term volatility may rise.

In addition, macroeconomic variables are also key crossroads for share prices. In the New York bond market, the yield on 10-year U.S. Treasury bonds has soared to 5.266%, reaching its highest point since June 2007—over 19 years. On top of that, rising international oil prices caused by instability in the Middle East may dampen sentiment for tech stocks. However, securities firms maintain that the underlying memory supply-demand imbalance and structural growth centered on HBM4 remain solid, reinforcing the view that the K-semiconductor sector’s long-term upward trend will only strengthen further.

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