[Click eStock] Less Risen Samsung Electronics, Attractive Investment Destination for Foreigners Highlighted

On the 5th, KB Securities maintained its buy rating and target price of 85,000 KRW for Samsung Electronics. This is based on the judgment that the decrease in memory semiconductor inventory began in the second quarter, leading to an increase in DRAM shipments, which will be a factor in raising memory semiconductor profits in the second half of the year.

Kim Dong-won, a researcher at KB Securities, explained, "DRAM shipments in the second quarter are estimated to increase by 15-20% compared to the previous quarter, indicating that inventory reduction is expected to begin," adding, "The increase in DRAM shipments will lead to a reduction in inventory valuation losses, which will be a factor in raising memory semiconductor profits in the second half of the year." He continued, "Although memory semiconductor prices are inevitably expected to decline until the third quarter, the rate of price decline will significantly slow down, and from the fourth quarter, as the production cuts by the three global memory companies are reflected in supply and demand, DRAM and NAND prices are expected to turn upward due to the effect of increased shipments."

Samsung Electronics is expected to officially enter the AI server memory market starting in 2024 with the anticipated launch of HBM3 in the fourth quarter. Currently, HBM2 is the main memory for AI servers, but from next year, the expansion of HBM3's share is expected to account for 20% of the overall market.

Researcher Kim said, "The market share of HBM3 based on sales is expected to expand from 12.1% in 2022 to 16% (estimated) in 2023 and 22.1% (estimated) in 2024, while the share of HBM2 (HBM2e) is expected to decrease from 87.9% in 2022 to 84% (estimated) in 2023 and 77.9% (estimated) in 2024." He added, "Accordingly, Samsung Electronics' HBM market share, with the expected launch of HBM3 within this year, is projected to expand from 40% in 2022 to 43% (estimated) in 2023 and 45% (estimated) in 2024."

Although global server shipments in 2023 are expected to decrease by 3% compared to the previous year, shipments are expected to enter an increasing phase from the third quarter. Server shipments in the third quarter are estimated to increase by 12.7% year-on-year, and fourth-quarter shipments are estimated to increase by 4.5% year-on-year. Additionally, memory semiconductor demand is expected to spread from mobile centered on the iPhone in the third quarter to PCs and servers in the fourth quarter.

Researcher Kim stated, "Foreign investors, who have shown the largest net buying since 2000 in Samsung Electronics money moves (net buying of 10.5 trillion KRW as of June 1, accounting for 78% of the total net buying in the KOSPI), are expected to continue for the time being," explaining, "This is because Samsung Electronics' stock price has risen less compared to memory semiconductor competitors this year (Samsung Electronics 30.6%, SK Hynix 47.1%, Micron 38.2%), and considering the value of the foundry business and foreign exchange gains (won appreciation), it is emerging as an attractive investment destination."