[Edaily Reporter Kim Kyung-eun ] While semiconductor stocks are rebounding following a sharp decline in July, forecasts suggest that their potential for further gains is limited. This is due to a widespread slowdown in demand following the surge in memory prices, coupled with the ongoing burden of rising interest rates. Earnings for the second half of the year at SamsungElectronics(005930)and SK hynix(000660)are also expected to fall short of market expectations.

Lee Min-hee, an analyst at BNK Investment & Securities, issued a “neutral” rating on the semiconductor sector in a report on the 15th, stating, “Memory demand momentum has peaked, and the slowdown trend is continuing into the second half of the year.”

In particular, the analysis suggests that the sharp rise in memory prices is weighing on demand. As memory accounts for nearly half of the bill of materials (BOM) for PCs and smartphones, mid- to low-end manufacturers have begun reducing memory capacity. Meanwhile, high-end product manufacturers have moved to raise prices in the second half of the year.

These trends are also evident in AI servers. According to BNK Investment & Securities, NVIDIA’s Vera Rubin NVL144, set for release at the end of the year, has reduced the system DRAM capacity per central processing unit (CPU) by about half compared to the original plan, and the total CPU memory has also been scaled back to 18–36 terabytes (TB). Analysts attribute this to factors such as the cost of memory in AI servers rising to around 30% of total costs.

A reduction in memory capacity is also expected for the Rubin Ultra NVL576, scheduled for release next year. It is understood that NVIDIA has lowered the number of HBM4E stacking layers from the initial 12–16 to 8, and reduced the HBM capacity per graphics processing unit (GPU) from 1 terabyte to 192–288 gigabytes (GB). Consequently, the projected total HBM capacity has also decreased from 144–576 TB to 110–166 TB. It is reported that other cloud service providers (CSPs) are also moving to reduce the HBM capacity in their new models scheduled for release next year.

On the supply side, competition to expand production capacity is heating up. BNK Investment & Securities projected that as capital expenditures by SamsungElectronics, SK hynix, Micron, and China’s CXMT increase, global DRAM production capacity will rise by approximately 50% by the end of 2028 compared to the end of 2025, and will nearly double by the end of 2030. Analysts note that if demand growth falls short of expectations, supply pressures could intensify.

Intensifying competition in the HBM market was also cited as a factor that could limit upside potential for stock prices. BNK Investment & Securities projected that starting with HBM4, SamsungElectronics will hold a 20–30% market share and Micron a 10–20% share, narrowing the gap with SK hynix. The firm believes that as NVIDIA reduces the stacking specifications for the next-generation HBM4E, market entry opportunities for SamsungElectronics and Micron will increase, which could in turn strengthen NVIDIA’s pricing power.

Interest rates are also a burden. While the scale of investment in AI infrastructure remains high, the free cash flow (FCF) of major U.S. cloud service providers (CSPs) is deteriorating due to large-scale capital expenditures. BNK Investment & Securities noted that if interest rates continue to rise, the financing burden on AI companies will increase, which could also heighten concerns about the sustainability of infrastructure investment.

Earnings for SamsungElectronics and SK hynix in the second half of the year are also expected to fall short of market expectations. Reflecting the slowing rise in memory prices and the strengthening of the Korean won, BNK Investment & Securities lowered its operating profit forecasts for SamsungElectronics in the third and fourth quarters by 5% and 2%, respectively, and revised those for SK hynix downward by 6% and 4%, respectively. Consequently, the firm downgraded its investment rating on SamsungElectronics to “Hold” and lowered its target price to 270,000 won. For SK hynix, it maintained a “Hold” rating and a target price of 1,480,000 won.

The analyst stated, “Although semiconductor stock prices have successfully rebounded from their valuation lows, the ongoing slowdown in demand momentum suggests that it will be difficult for prices to rise above average valuation levels,” and proposed a range-bound trading strategy with limited upside potential.