[Edaily Reporter Kim Kyung-eun ] On the 15th, KB Securities analyzed that market concerns regarding Chinese memory semiconductor companies catching up technologically are excessive and that investors should use the recent stock price correction of SamsungElectronics(005930) as an opportunity to increase their holdings.

Kim Dong-won, Head of Research at KB Securities, stated in a report released that day, “Market concerns about China’s technological catch-up are excessive,” adding, “It is time to focus on SamsungElectronics’ pace of technological innovation and its high barriers to entry rather than the speed at which China’s Changxin Memory Technology (CXMT) is catching up.”

According to SamsungSecurities, the gap in DRAM process technology between SamsungElectronics and CXMT stands at 5 to 7 years, based on the timing of mass production. For the 1z process—CXMT’s current flagship process—SamsungElectronics had already begun full-scale mass production as early as September 2019. Similarly, for the 1a process, which CXMT began mass-producing last month, SamsungElectronics started production in October 2021, representing a time lag of approximately five years.

“SamsungElectronics has secured a competitive edge through its experience in mass-producing cutting-edge processes, stabilizing yield rates, and obtaining customer certifications,” said Director Kim, adding, “The likelihood of China narrowing this technology gap is expected to be limited.”

The next-generation DRAM technology recently unveiled by CXMT is also viewed as separate from securing commercial competitiveness. CXMT recently unveiled a 4F² structure DRAM technology capable of achieving higher integration density than existing DRAM. It is explained that verification of performance, yield, cost competitiveness, customer certification, and mass production capabilities is necessary for actual commercialization.

Furthermore, the market for 4F² structure DRAM has not yet developed commercial demand. Although SamsungElectronics announced technology for implementing 4F²-based vertical channel transistors as early as 2023, the relevant market has yet to materialize. This means it is difficult to interpret the Chinese company’s unveiling of new technology as an immediate competitive threat to SamsungElectronics.

“Competitiveness in the memory semiconductor sector is determined not by the mere development of new processes, but by stable mass production, yield assurance, and the ability to secure customer certifications,” emphasized Division Head Kim. “While CMXT is enhancing the technical maturity of existing processes, SamsungElectronics is continuing to advance its technology, focusing on next-generation leading-edge processes and HBM.”

He assessed that SamsungElectronics’ valuation (the level of its stock price relative to its enterprise value) has become more attractive due to the recent decline in its stock price. SamsungElectronics’ stock price has fallen 16% this month, entering a historically undervalued phase with a price-to-earnings ratio (P/E ratio) of around 3.

Head Kim said, “We anticipate a shareholder return policy that combines increased dividends with the repurchase and cancellation of treasury stock,” adding, “Given SamsungElectronics’ potential for enterprise value growth, the current stock price correction presents an opportunity to increase holdings.”