Is this the semiconductor sector’s real bottom? ... “Samsung Electronics and SK hynix to begin a W-shaped rebound in November”

[Financial News] KB Securities forecast that a W-shaped rebound in the semiconductor sector would begin as the gap between earnings and share prices narrows. It maintained its “Positive” rating on the sector and named Samsung Electronics Co., Ltd. and SK hynix its top picks. Both stocks are rated “Buy,” with target prices of 600,000 won and 3.5 million won, respectively.
On the 2nd, KB Securities researcher Lee Chang-min said, “The memory market is expected to enter the acceleration phase of a powerful upcycle in 2027, with prices rising and shipments increasing at the same time,” adding, “While growing demand for high-bandwidth memory (HBM) is constraining the supply of commodity DRAM, the spread of artificial intelligence (AI) inference will further drive up memory demand.”
He estimated that next year, prices of commodity DRAM and NAND would rise 40% and 32%, respectively, year over year, while HBM prices would increase 121%. “We expect memory makers’ earnings to continue their upward trend in 2027,” he explained. “By contrast, based on projected earnings for next year, the price-to-earnings ratios (PERs) are just 3.0 times for Samsung Electronics Co., Ltd. and 2.5 times for SK hynix.”
He continued, “We believe current share prices have passed the peak of concerns, so this is the time to focus on upside potential rather than downside risks,” and forecast, “In particular, a W-shaped rebound will begin in November and December as the gap between earnings and valuations narrows.”
Regarding concerns about excessive investment in AI, he focused on supply shortages. “Big tech companies’ AI investments have recently begun translating into actual cloud revenue and earnings growth,” Lee said. He assessed, “AI infrastructure investment is currently in an expansion phase aimed at keeping pace with AI demand, which is growing faster than expected.”
He also cited the spread of agentic AI as a factor driving demand growth. “As tasks become more complex and cycles repeat several times, token usage will surge,” he said. “Demand is expected to rise significantly not only for GPUs and HBM, but also for high-capacity DRAM and NAND used to store data.”
Lee added, “Earnings growth is all but assured for Samsung Electronics Co., Ltd. and SK hynix, thanks to rising commodity memory prices, the normalization of HBM prices, and a larger share of long-term supply contracts,” and said, “As the direction of shareholder returns becomes clearer, supply-and-demand conditions will also improve.”
[email protected] Joo Won-gyu Reporter