[Edaily Reporter Park Sun-Yeop ] Analysts in the securities industry have suggested that the recent stock price correction in the memory package substrate sector should be viewed as a buying opportunity. Although concerns have been raised about price cuts in the second half of the year, analysts believe there is a greater likelihood of a supply shortage due to the shift toward high-performance memory and stagnant supply capacity.
Kim Min-kyung, an analyst at Hana Securities, stated in an electrical and electronics sector report on the 3rd, “Concerns over price cuts for memory package substrates are unfounded,” adding, “This stock price correction should be viewed as a strong buying opportunity.” Hana Securities maintained its sector investment rating at “Overweight” and kept its “Buy” rating and target price of 250,000 won for DaeduckElectronics(353200). DaeduckElectronics’ closing price the previous day was 131,000 won.

Recently, memory package substrate stocks such as DaeduckElectronics ( SIMMTECH Co., Ltd.(222800)) and ( HAESUNG DS(195870) ) have experienced a sharp correction. This is due to concerns over overheating in AI investments following news that Meta plans to lease computing resources externally, as well as media reports suggesting the possibility of price cuts for memory package substrates in the second half of the year, which have dampened investor sentiment.
However, Hana Securities viewed the likelihood of a price cut as low. The firm reasoned that, given memory semiconductor companies are currently posting high operating profit margins, there is little incentive for them to demand price cuts from package substrate manufacturers. Instead, it highlighted the fact that memory package substrate prices were raised last April. While this partly reflected rising prices of raw materials such as gold and copper, the firm interpreted the price adjustment as partially reflecting concerns over supply and demand in the second half of the year.
From a supply-and-demand perspective, the firm also noted that the likelihood of a supply shortage is increasing. Memory package substrate manufacturers have seen their production capacity stagnate following large-scale capacity expansions from 2020 to 2022. Meanwhile, the mainstay memory products have shifted from DDR4 and LPDDR4 to DDR5, LPDDR5, and LPDDR5X. Since high-performance memory features larger die sizes and requires substrates with larger surface areas and more layers, the volume that can be produced using the same equipment decreases.
Additionally, the fact that leading global substrate manufacturers are focusing on expanding production capacity for the highly profitable flip-chip ball grid array (FCBGA) was cited as a factor tightening the supply of BT substrates.
Demand outlook for the second half of the year and beyond is also favorable. Hana Securities explained that the supply of standard memory for NVIDIA’s Rubin project and expanded DDR5 shipments by Chinese memory manufacturers are scheduled for the second half of this year. In the medium to long term, the firm projected that demand for package substrates will rise sharply as the three major memory manufacturers continue their aggressive capacity expansions.
Researcher Kim cited long-term supply agreements (LTAs) as a sign of a shortage in memory package substrate supply. He referenced the case where, after SIMMTECH Co., Ltd. signed a single sales and supply agreement worth over 1000억 won with Micron in March 2020, the actual supply shortage intensified and the market entered a price hike cycle. He went on to analyze, “Considering the current global demand and supply situation for PCBs, it is highly likely that a similar trend will occur in the second half of this year.”