Brokerages began lowering their price targets in late July due to concerns that the commodity chip market had peaked and China's push to produce semiconductor lithography equipment domestically.
The closing prices for Samsung Electronics, top right, and SK hynix, bottom right, are shown on a screen in Hana Bank's trading room in central Seoul on Aug. 7.NEWS1
Brokerages are lowering price targets for Samsung Electronics and SK hynix following concerns that the chip market has passed its peak and that Chinese rivals are catching up.
Kiwoom Securities lowered its price target for Samsung Electronics to 350,000 won ($250) on Monday, down from its previous 390,000 won target. It also lowered its target for SK hynix to 2.1 million won from 2.2 million won but maintained its “buy” ratings for both stocks.
High memory prices are prompting smartphone makers to take a more conservative approach to purchases, and demand for memory used in laptops and PCs is also expected to be weaker than was forecast at the beginning of the year, Kiwoom Securities analyst Park Yoo-ak said.
“Among the large-scale capacity expansions driven by long-term supply agreements, increased supply in 2027 will weigh on the commodity memory market,” Park said.
Advances by Chinese memory makers in both technology and market share also pose a threat.
CXMT has successfully entered the PC and server markets by increasing its use of domestically produced equipment. YMTC is also increasing its share of the mobile and client solid-state drive, or SSD, markets, putting pressure on Korean companies.
Brokerages began lowering their price targets in late July following concerns that the semiconductor market had peaked, SK hynix’s second quarter earnings announcement and China’s push to domestically produce semiconductor lithography equipment.
Mirae Asset Securities cut its price target for Samsung Electronics to 370,000 won from 550,000 won and its target for SK hynix to 2.8 million won from 4.2 million won; Shinhan Securities lowered its price target for Samsung Electronics to 450,000 won from 590,000 won and its target for SK hynix to 2.7 million won from 4.2 million won; and Samsung Securities also lowered its Samsung Electronics price target to 400,000 won from 500,000 won and its SK hynix target to 3 million won from 3.5 million won.
“We concluded that the share price correction stemming from expectations for lower NAND contract prices had run its course, but this was immediately followed by the issue of China’s domestically produced lithography equipment,” Mirae Asset Securities said. “The decline in share prices across the industry appears excessive, but we determined that adjustments to our price targets were also inevitable.”
A person walks past SK hynix's headquarters in Icheon, Gyeonggi, on July 29.YONHAP
The recent declines in the companies’ share prices have also pushed brokerages to bring their targets more in line with current valuations. Samsung Electronics shares were trading at 240,000 won as of 2:55 p.m. on Tuesday, up 4.35 percent from the previous day. SK hynix was trading at 1.43 million won, up 0.7 percent. These figures, however, remain sharply below their record highs of 374,500 won and 2.987 million won, respectively, reached in June.
Despite lowering price targets, brokerages continue to see medium- to long-term growth potential and attractive valuations, particularly on the strength of high bandwidth memory (HBM).
“Samsung Electronics’ HBM shipments in 2027 will increase 109 percent from this year, and its blended average selling price will rise 81 percent, allowing it to regain the No. 1 position in the HBM market,” Park said, forecasting a rebound in the share price on the back of HBM earnings growth.
BY JANG SEO-YUN [lee.taehee2@joongang.co.kr]
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
