[Edaily Reporter Kim Kyung-eun ] On the 8th, KIWOOM Securities lowered its target price for SamsungElectronics(005930)from 430,000 won to 390,000 won, citing changes in the medium- to long-term outlook for the memory industry. It maintained its “Buy” investment rating and its status as the top pick in the semiconductor sector.

Park Yu-ak, an analyst at KIWOOM Securities, stated in a report released that day, “While SamsungElectronics’ stock price has been on an upward trend driven by earnings per share (EPS) growth, volatility is expected to increase in the second half of the year—when the EPS growth rate slows significantly—due to ‘factors driving change in the memory industry.’”

He cited the fact that finished goods manufacturers are adopting a conservative strategy regarding additional memory purchases as evidence of the slowing trend in memory prices.

Analyst Park explained, “Price hikes for PCs and smartphones, driven by rising component costs—including memory, central processing units (CPUs), and circuit boards—have begun in earnest,” adding, “Concerns over a decline in demand due to these price increases are prompting changes in the memory purchasing strategies of PC original equipment manufacturers (OEMs) and smartphone manufacturers.”

He continued, “It seems unlikely that the rate of memory price increases in the second half of the year will exceed expectations,” and predicted, “Consequently, it is unlikely that SamsungElectronics’ earnings per share (EPS) growth rate for the third quarter of this year will exceed current market expectations.”

Researcher Park said, “We need to prepare for increased stock price volatility, keeping in mind expectations for expanded market share in High Bandwidth Memory (HBM) 4 and enterprise solid-state drives (eSSDs), as well as concerns over rising market share by Chinese memory manufacturers.”

Regarding the preliminary second-quarter earnings announced by SamsungElectronics the previous day, he assessed that the memory business played a key role. Analyst Park estimated that the average selling price (ASP) of general-purpose DRAM rose 54% quarter-over-quarter, while NAND prices increased by 70%. He also analyzed that utilization rates in the Foundry and System LSI businesses improved, driven by expanded production of HBM4 base dies and the Exynos 2600.

On the other hand, he estimated that profitability in the Device Experience (DX) division likely deteriorated due to rising costs of memory and other components. Operating profit by business division is expected to be 89.2 trillion won for DS and 300 billion won for SDC, while DX (MX·Network) is projected to post an operating loss of 500 billion won and DX (VD·Home Appliances) an operating loss of 200 billion won.

SamsungElectronics’ third-quarter revenue is projected to reach 202 trillion won, and operating profit 112 trillion won—up 18% and 26%, respectively, from the previous quarter—in line with market consensus.