[Edaily Reporter kyoungeun kim ] DaishinSecurities announced on the 22nd that it is maintaining its investment rating of “Overweight” for the semiconductor industry—which has recently experienced a sharp decline in stock prices—citing the drop as an “irrational decline.”
Stating that there is no change to its existing stance, the firm assigned a “Buy” rating and a target price of 560,000 won to SamsungElectronics(005930). For SK hynix(000660), it maintained a “Buy” rating and a target price of 3.9 million won.
In the report, Ryu Hyung-geun, an analyst at DaishinSecurities, stated, “Amid controversy over an untimely market peak, the market has experienced an excessive decline in stock prices,” adding, “Since numerous reasons are inevitably cited during a sharp stock price drop, it is now time to untangle this complex web one by one.”
◇“Tailored Pricing Strategy for the Supply Industry Will Once Again Prove Its Effectiveness”
Analyst Ryu projected that in the third quarter of this year, prices for standard DRAM and NAND flash will rise by the mid-to-high 20% range and the mid-to-high 10% range, respectively, compared to the previous quarter. He noted that these figures are based on global standards, and since the underlying pressures vary by supplier, there may be some variation in the rate of price increases.
He explained, “The key point the market should focus on is that the supply sector’s tailored pricing strategies will once again prove their effectiveness,” adding, “In a supply-constrained environment, pricing strategies tend to vary by customer and application, and it is a natural progression to prioritize customers who are expected to purchase more now and continue to do so in the future.”
He continued, “The ‘power game’ driven by the memory semiconductor market is continuing,” and assessed that “for some customers who have weathered the storm by benefiting from ‘chip deflation,’ a short-term erosion of profits is inevitable.”
Regarding legacy semiconductors, he noted, “Demand continues to emerge across numerous applications,” adding, “Production by suppliers is being further scaled back amid a shift in product mix, and amid extreme supply-demand imbalances, customers appear willing to accept even sharp price hikes.” He added that, as a result, some unusual phenomena have been observed, such as legacy products trading at higher prices than High-Bandwidth Memory (HBM). By product category, the firm expects the strongest price increases to occur in DDR4 and LPDDR4.

◇“Long-Term Agreements: The Market Is Overlooking Their Hidden Value”
Regarding the spread of long-term agreements (LTAs), Analyst Ryu stated, “In times of upheaval, there are inevitably winners and losers,” adding, “To emerge as a winner in the current artificial intelligence (AI) cycle, it is necessary to establish a stable memory semiconductor supply chain, and as the interests of customers and the supply industry align, the spread of LTAs is continuing.”
However, he pointed out two misconceptions in the market. First, LTAs are not contracts applied to all customers. He said, “It is important to remember that these agreements are being signed primarily with key customers with whom we can build strong, mutually beneficial partnerships to generate synergies.”
Second is the perspective that focuses solely on the short-term price-capping effect of LTAs. Researcher Ryu emphasized, “Rather than taking a narrow view that LTAs will merely curb short-term price increases, we need to pay closer attention to the medium- to long-term value they will bring,” adding, “Now is the time to focus on the effect of extending the cycle’s duration and the synergies in building new businesses tailored to AI.”
He noted that while initial contracts are presumed to have been structured with both upper and lower price limits, as the severity of supply shortages intensifies, subsequent contracts are seeing stricter pricing terms—such as setting only a lower price limit or fixing prices for the duration of the contract.
Furthermore, he noted, “Proactive measures to enhance contract value are also being strengthened,” citing pre-contract extension options as a prime example. Analyst Ryu predicted, “Adding options that allow decisions on whether to extend long-term contracts to be made early—rather than near the expiration date of the existing contract—will enable flexible production capacity (Capa) management,” adding, “This will be a change that increases visibility into reducing cycle volatility.”