“Samsung Electronics at 309,000 won, SK hynix at 1.6 million won”... Morgan Stanley cuts price targets

[Financial News] Global investment bank (IB) Morgan Stanley lowered its price targets for both Samsung Electronics and SK hynix. The move reflects its forecast that, even if the boom in the artificial intelligence (AI) semiconductor market continues for the time being, industry conditions could worsen due to oversupply after 2028.
According to sources in the financial investment industry on the 10th, Morgan Stanley recently cut its price target for SK hynix from 2.6 million won to 1.6 million won, a reduction of about 38%. It also lowered its price target for Samsung Electronics from 381,000 won to 309,000 won, a reduction of about 19%.
Morgan Stanley analyst Sean Kim, who wrote the report, has warned in the past about the possibility of a downturn in the semiconductor market and is known among domestic investors as the “Grim Reaper of Semiconductors.”
In August 2021, analyst Sean Kim published a report titled “Memory: Winter Is Coming,” warning of a slowdown in the semiconductor industry.
In September 2024, he raised the possibility of an oversupply of memory semiconductors in a report titled “Winter Is Coming.” At the time, he cut SK hynix’s price target by 54% and Samsung Electronics’ by 28%.
Morgan Stanley expected supply to increase as new semiconductor production facilities begin operating from late 2027. It was concerned that the pace of AI data center construction could slow, potentially creating an imbalance in semiconductor supply and demand.
In particular, it factored in the possibility that tighter regulations on AI data centers after the U.S. midterm elections could delay construction schedules. It therefore forecast that a data center project with a capacity of about 5 gigawatts (GW), originally scheduled to come online in 2028, would be postponed to 2029.
Morgan Stanley analyzed that although demand for semiconductors is rising with increased AI investment, supply could exceed demand from 2028 if new production facilities come online while data center construction slows.
However, separate from concerns about a long-term slowdown in industry conditions, it raised its earnings forecasts for semiconductor companies for next year.
It raised its 2027 operating profit forecast for Samsung Electronics by 9% and for SK hynix by 13% from its previous estimates. Although it lowered its price targets, it maintained its Overweight ratings on both companies.
Morgan Stanley reportedly adjusted its price targets in light of the risk of increased supply and weaker profitability after 2028, despite the high likelihood that semiconductor companies’ earnings will improve in the near term.


[email protected] Han Seung-gon Reporter