[Edaily Reporter Kim Kyung-eun ] On the 31st, NH INVESTMENT & SECURITIES maintained its “Buy” rating and target price of 530,000 won for SamsungElectronics(005930), noting that the downside for memory prices is becoming more resilient due to the expansion of long-term supply agreements (LTAs).

Ryu Young-ho, an analyst at NH INVESTMENT & SECURITIES, stated in a report released that day, “Given the limited changes in fundamentals, the recent decline in the stock price is excessive.”

Ryu analyzed that SamsungElectronics, like its competitors, is expanding LTAs with major customers. The company has currently finalized negotiations with 10 customers, including five major hyperscalers, and the contracts operate on a five-year rolling basis. To strengthen contract compliance, Samsung is also applying security deposits and price floors. In the medium to long term, he projected that the volume covered by long-term contracts will expand to 60–70% of total production capacity.

He noted, “While market opinions are divided regarding the impact of LTAs, the expansion of long-term contracts is a factor that further solidifies the downside support for memory prices,” adding, “As unmet demand is expected to persist through 2027, it will be difficult for supply to keep pace with demand in the short term.”

He predicted that the trend of improving earnings would continue in the third quarter. SamsungElectronics’ third-quarter revenue is estimated at 209.4 trillion won, up 143.3% year-over-year and 22.1% quarter-over-quarter, while operating profit is projected at 111.8 trillion won, up 819.0% year-over-year and 24.9% quarter-over-quarter. Even after accounting for some deferred provisions for performance-based bonuses, the firm expects rising memory prices to underpin earnings.

In particular, with the full-scale launch of sixth-generation high-bandwidth memory (HBM4) beginning in the third quarter, HBM is projected to account for approximately 60% of HBM revenue in the second half of the year. Average selling prices (ASPs) for DRAM and NAND in the third quarter are estimated to rise by 18.0% and 20.0%, respectively, while bit growth (B/G) is projected to reach 5.2% and 8.8%, respectively. Despite recent concerns about the NAND market, the company is expected to maintain solid performance, driven by an expanding share of enterprise SSDs (eSSDs).

However, the Device Experience (DX) division is expected to remain in the red for the second consecutive quarter due to rising component prices.

Analyst Ryu stated, “Along with the recovery of the LSI and foundry segments, the competitiveness of the foundry and custom memory businesses will come to the fore,” adding, “We also expect a revaluation driven by the company’s shareholder return policy.”