"Samsung to Reach 320,000 Won... Memory Chips Fully Sold Out Through Next Year"

KB Securities has raised its target price for Samsung Electronics from 240,000 won to 320,000 won. The brokerage upgraded its operating profit forecast after revising up its outlook for this year’s price increases in Dynamic Random Access Memory (DRAM) and NAND flash memory. It maintained its "buy" investment rating.
Kim Dong-won, Head of Research at KB Securities, said on the 12th, "While demand for modern DRAM and NAND flash memory is rising rapidly, supply growth is expected to remain limited through next year, so the upward trend in memory prices is likely to continue for the time being." He added, "In particular, price increases in general-purpose DRAM that surpass those of HBM3E high-bandwidth memory will directly translate into a sharp improvement in profitability, and the full-scale shipment of premium HBM4 for Nvidia Corporation is also expected to be a positive driver for earnings."
Samsung Electronics’ operating profit for the first quarter of this year is estimated at 40 trillion won, six times higher than a year earlier. Second-quarter operating profit is projected at 51 trillion won, about eleven times last year’s level, raising expectations for an earnings surprise.
Kim explained, "This is because DRAM and NAND flash memory prices in the first quarter are expected to rise 51% and 48% quarter-on-quarter, respectively, far exceeding the price increases seen in the fourth quarter of last year." He went on, "In particular, operating profit in the memory division alone is forecast to jump elevenfold year-on-year to 38 trillion won in the first quarter, meaning a single quarter’s performance could surpass last year’s full-year memory operating profit of 32 trillion won."
With the rapid improvement in AI inference performance, the likelihood of commercializing Physical Artificial Intelligence (Physical AI) in preparation for artificial general intelligence (AGI) by 2030 is increasing. The spread of AI inference and Physical AI is expected to drive greater demand for data processing and storage across a wide range of edge devices, including robots and autonomous driving systems. Analysts say this will serve as a structural driver of demand growth for memory semiconductors, which are a core strategic asset for AI.
Kim added, "Taking this into account, we believe Samsung Electronics’ memory semiconductor volumes are effectively fully sold out through next year," and continued, "Global Big Tech companies are also believed to be expanding discussions on five-year long-term supply contracts aimed at 2030."