◇ Rebounding in September After August’s Decline
According to the Korea Exchange on the 23rd, SK hynix, which started the month in the high 1.6 million won range, rose to 1.91 million won during intraday trading before closing the regular session at 1.862 million won, marking an 11.23% increase so far this month. Compared to the -2.56% decline (-1,718,000 won → 1,674,000 won) recorded in August, the market sentiment has clearly shifted this month. SamsungElectronics also showed a slight decline in August, with its stock price 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 alone.
While securities analysts agree it is too early to conclude that this September rebound marks “a full-fledged bull market,” they are in consensus that the market has found its bottom. 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 a record low of 5.5 times,” adding, “This was a phase where 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, “Although 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 raising concerns 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 general-purpose memory prices. In addition, concerns persist that the upside potential for SamsungElectronics and SK hynix stock prices could be capped by a short-term slowdown in price growth due to customer price resistance, as well as the possibility of a “peak-out” in 2028.
However, the securities industry emphasizes that attention should be focused on “structural changes in the cycle” rather than short-term price fluctuations. Lee Jae-won, an analyst at Yuanta Securities Korea, said, “In the current memory cycle, the core issue—the logic of supply and demand—is how long supply shortages 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 spread 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 suggest that the so-called “paradox of HBM expansion”—where the larger the share of HBM in total DRAM production capacity becomes, 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-centric 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, as it begins full-scale shipments of HBM4 and demand for custom semiconductors (ASICs) from big tech companies expands. 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 legacy products from Chinese manufacturers. Ryu Hyung-geun, an analyst at DaishinSecurities, emphasized, “Now is the time to focus on the further expansion of the cycle,” adding, “Given that this is accompanied by strengthened competitiveness in semiconductor technology, a more positive approach to stocks is warranted.”
