Samsung Electronics Target Prices Range from 270,000 Won to 600,000 Won as Securities Firms Offer Starkly Divergent Outlooks

[Financial News] Securities firms are sharply divided over Samsung Electronics. Some analysts expect earnings to peak and then decline, citing slowing memory demand and limited room for further price increases. Others anticipate a rebound, supported by high-bandwidth memory (HBM) and improvements in advanced-process yields. With target prices ranging from 270,000 won to 600,000 won—more than a twofold gap—some investors have expressed confusion.

Lee Min-hwi, a researcher at BNK Securities, said on the 15th regarding Samsung Electronics, "We are lowering our operating profit estimates for the third and fourth quarters of this year by 5% and 2%, respectively, from 11.47 trillion won and 12.17 trillion won to 10.85 trillion won and 11.88 trillion won."
Lee said, "We have lowered our forecast for the third-quarter average selling price (ASP) of DRAM from an 18% increase quarter on quarter to a 14% increase, and reduced our forecast for the average won-dollar exchange rate from 1,480 won to 1,420 won." He added, "We also reflected our expectation that Samsung Electronics' subsidiary Samsung Display will post weak results."
Regarding memory demand, he analyzed, "As memory costs reach their limit, demand elasticity is weakening not only for information technology (IT) products but also for servers." He added, "In the large language model (LLM) market, the share of closed-source models has plunged, while price cuts amid intensifying competition have caused the price paid per token to fall by more than half since June."
Lee forecast, "This will slow revenue growth and become a factor reducing the ability to purchase semiconductors." He explained, "Google and Meta Platforms are actually shifting from performance competition toward strategies focused on value for money and energy efficiency, while OpenAI and Anthropic are also slowing the pace of frontier-model development and focusing on restoring security and reliability."
He also expressed concerns about supply. Lee said, "With macroeconomic uncertainty rising and memory prices no longer likely to increase, manufacturers are instead aggressively expanding capacity based on optimistic expectations for long-term demand. This makes the outlook for memory supply and demand appear unfavorable."
Lee judged that although Samsung Electronics' shareholder-return policy and foundry business offered positive factors, much of this had already been reflected in the share price. He said, "The shareholder-return program is positive, but it is unlikely to affect the direction of the share price." He added, "Expectations for improved foundry profitability remain valid, but they appear to have been largely reflected in the share price." He continued, "Following the earnings estimate cuts, we are lowering our target price from 300,000 won to 270,000 won. Given the limited upside, we are also downgrading our investment rating from 'Buy' to 'Hold.'"
The target price proposed by BNK Securities differs significantly from those of other securities firms. On the 7th, Mirae Asset Securities set its target price for Samsung Electronics at 400,000 won. LS Securities forecast 450,000 won, Samsung Securities 400,000 won, and EUGENE Investment & Securities 560,000 won.


In contrast, some securities firms are focusing on the potential recovery of Samsung Electronics' competitiveness in HBM and foundry operations. KB Securities set a target price of 600,000 won, based on its analysis that Samsung Electronics could rebound simultaneously in its HBM and foundry businesses.
KB Securities forecast that Samsung Electronics will increase its market share through expanded mass production of HBM4, the sixth-generation HBM, and improved yields in the 2-nanometer process. It also expects the company to return to profitability in its foundry business. The firm assessed that turnkey competitiveness spanning memory, foundry, and packaging could influence the future growth of the semiconductor business.
Kim Dong-won, head of the research division at KB Securities, said, "Samsung Electronics, which recorded a 33% share of the HBM market in the second quarter of this year, is expected to approach a share of around 40% in the fourth quarter." He added, "This is because HBM4 revenue is expected to increase more than threefold in the third quarter from the previous quarter, while HBM4 is expected to account for more than 60% of total HBM revenue in the second half of the year."
Kim explained, "Samsung Electronics has secured a specific roadmap that includes full-scale HBM4 mass production, the supply of HBM4E (seventh-generation) samples to major customers, an HBM5 (eighth-generation) architecture using 1c core dies and 2-nanometer base dies, and zHBM, the next-generation HBM."
He judged that the foundry business had also entered a growth phase. Kim explained, "With the yield of its 4-nanometer production stabilized at above 80%, Samsung Foundry's 2-nanometer gate-all-around (GAA) yield is also improving rapidly to above 70%, indicating that its mass-production competitiveness in advanced processes is beginning to recover in earnest." He added, "Improved 2-nanometer yields could raise not only Samsung Foundry's future results but also its competitiveness in HBM base dies, accelerating future revenue growth."
Kim forecast, "The possibility of a return to profitability in the foundry business will increase significantly from the third quarter of this year, supported by the full-scale mass production of 4-nanometer language processing units (LPUs) and yield stabilization." He explained, "Samsung Electronics' current 4-nanometer yield is considered to be approaching a level at which it can effectively compete with Taiwan Semiconductor Manufacturing Company Limited (TSMC), while its 2-nanometer yield is also improving rapidly from below 50% at the beginning of the year. As a result, securing major U.S. customers is highly likely to become visible within the year."
Kim said, "As the only company to have secured the capability to provide turnkey solutions spanning HBM, foundry, and packaging beyond supplying standalone memory products, Samsung Electronics is expected to have an even larger field for future growth."


[email protected] Han Seung-gon Reporter