[Edaily Reporter PARK MIN ] The two leading stocks in the domestic market— SamsungElectronics(005930)and SK hynix(000660)—are helping fuel a trend reversal by breaking out of the “Boxpi” (a portmanteau of “box range” and “KOSPI”) amid a battle to stabilize the KOSPI at the 7,000 level. In contrast to last month’s weakness, the market has been gradually raising its lows this month by weathering strong external headwinds, such as U.S. interest rate hikes and global concerns over the pace of artificial intelligence (AI) development. While some point to “slowing momentum in memory price increases” as a factor capping stock prices, the securities industry analyzes that, since the valuation bottom has been confirmed, it is actually advantageous to approach the market from the perspective of gradual buying (increasing exposure).

◇ Rebounding in September After August’s Decline

According to the Korea Exchange on the 23rd, SK hynix continued its upward trend from the high 1.6 million won range earlier this month, rising to 1.91 million won during intraday trading before closing the regular session at 1.862 million won—an 11.23% increase. Compared to the -2.56% decline (from 1,718,000 won to 1,674,000 won) recorded in August, the market sentiment has clearly shifted this month. SamsungElectronics also saw its stock price remain largely flat in August, falling 0.95% from 262,500 won to 260,000 won, but has since risen 9.80% (from 260,000 won to 285,500 won) this month.

While securities analysts agree that it is too early to conclude that this September rebound marks “the beginning of a full-fledged bull market,” they are in agreement that the market has found a floor. Na Jeong-hwan, an analyst at NH INVESTMENT & SECURITIES, noted, “The domestic stock market underwent a sharp correction in July and August, causing the KOSPI’s 12-month forward price-to-earnings ratio (P/E ratio) to fall to 5.5x, an all-time low,” adding, “This was a phase in which stock prices were weighed down not by actual earnings deterioration, but by vague doubts about future earnings.”

In fact, the valuations of SamsungElectronics and SK hynix are significantly below the global Big Tech average. The 12-month forward P/E ratio for SK hynix, as currently estimated by the securities industry, ranges from the mid-3x to the low-5x range, while SamsungElectronics’ P/E ratio is also only around 4x. Compared to the global semiconductor and big tech averages, which trade at around 15 to 25 times, these companies are significantly undervalued.

Kim Dong-won, Head of Research at KB Securities, emphasized, “While concerns about the pace of AI development have grown, investment in AI infrastructure and memory orders are actually on the rise,” adding, “Now that the gap between stock prices and fundamentals is widening, it is time to prepare for a future rebound.”

◇ Attention on “Supply Shortages Due to HBM Concentration”

Some observers are expressing caution that competition among Chinese semiconductor companies—such as Changxin Memory (CXMT) and Yangtze Memory Technology (YMTC)—to expand production capacity and market share could increase downward pressure on generic memory prices. In addition, concerns persist that the short-term price rally could slow due to price resistance from customers, and that the possibility of a peak-out in 2028 could cap the upside potential of SamsungElectronics and SK hynix’s stock prices.

However, the securities industry emphasizes that attention should be focused not on short-term price fluctuations but on “structural changes in the cycle.” Lee Jae-won, an analyst at Yuanta Securities Korea, said, “The core of the current memory cycle lies in the dynamics of supply and demand—specifically, how long the combination of tight supply and long-term contracts can sustain high profits, rather than the magnitude of short-term price increases.”

Baek Gil-hyun, an analyst at Yuanta Securities Korea, also noted, “Considering the erosion of general-purpose DRAM production capacity by High Bandwidth Memory (HBM) and the demand for high-capacity memory driven by the proliferation of AI inference, it is highly likely that the resolution of supply constraints will be much later than expected,” and raised SamsungElectronics’ target price to 630,000 won that day.

In particular, many analysts believe that the so-called “paradox of HBM expansion”—where the larger the share of HBM within total DRAM production capacity, the more production capacity for existing general-purpose products is reduced—will exacerbate the structural supply shortage of DRAM. Consequently, there are forecasts that general-purpose DRAM prices in the second half of the year will also post double-digit growth rates, exceeding market expectations.

Division Head Kim Dong-won said “SamsungElectronics’ share of general-purpose DRAM production capacity is projected to continue shrinking to 73% in 2025, 65% in 2026, and 59% in 2027,” adding, “As the shift toward HBM-centered production accelerates, supply constraints for general-purpose DRAM will inevitably intensify, leading to a prolonged structural supply shortage through 2027.”

SK hynix also anticipates a trend-based rebound in its stock price, backed by proven earnings, driven by the full-scale shipment of HBM4 and expanding demand for application-specific integrated circuits (ASICs) from big tech companies. Kim Young-geon, an analyst at MIRAE ASSET SECURITIES, explained, “Demand for higher HBM4 capacity and bandwidth is surging across next-generation accelerators from major big tech companies—such as AMD’s MI455X, NVIDIA’s Rubin, and Meta’s MTIA—as well as their proprietary ASICs.” Seo Seung-yeon, an analyst at DB Securities, also predicted, “Full-scale HBM4 shipments will begin in the third quarter, and the year-over-year increase in HBM4 prices is expected to reach 70% in 2027.”

Ultimately, the industry’s consensus is that investors should focus on the sustained AI infrastructure investments by hyperscalers and the visibility of demand driven by long-term agreements (LTAs) spanning five years or more, rather than being swayed by short-term price fluctuations or concerns about Chinese companies entering the legacy market. Ryu Hyung-geun, an analyst at DaishinSecurities, emphasized, “Now is the time to focus on the further expansion of the cycle,” adding, “As this is accompanied by strengthened competitiveness in semiconductor technology, a more positive approach toward stocks is warranted.”