HBM Equipment Stocks That Hesitated Start Rally Again?

After a Sharp Rise This Year and Recent Adjustment... Sentiment Reverses After Samsung Electronics' Preliminary Earnings Announcement
Investments in High-Demand DDR5 Semiconductors and HBM Expected to Continue

Shares of high-bandwidth memory (HBM) equipment, which had recently stalled, are showing an upward trend again. This appears to be influenced by steady demand for HBM and expectations that semiconductor companies will increase related investments.

On the 12th, the KOSDAQ semiconductor sector index recorded 1720.94, rising 3.22% compared to the end of last month. This rebound came after consecutive declines in August and September.

Stocks considered HBM equipment shares also succeeded in rebounding. Hanmi Semiconductor's stock price rose 5.69% compared to the end of last month. STI and EO Technics also jumped 9.36% and 9.78%, respectively. DIIT surged 31.74%. These stocks had steadily increased throughout the year but recently experienced corrections due to fatigue from rapid rises. The semiconductor industry's overall recovery had not fully materialized, which also weighed on these stocks.

However, the mood changed starting with Samsung Electronics' third-quarter earnings announcement on the 11th. Samsung Electronics reported third-quarter sales of 67 trillion won and an operating profit of 2.4 trillion won. Although detailed results by business segment were not disclosed, securities firms estimated that the Device Solutions (DS) division, responsible for semiconductors, likely recorded a loss of around 3 trillion won. Notably, production cuts began to show some effect in the third quarter, leading to a slight improvement in semiconductor profitability. This suggests the industry has hit bottom. Dongwon Kim, a researcher at KB Securities, said, "Samsung Electronics' third-quarter preliminary earnings announcement is expected to serve as a recognition point for the earnings bottom," adding, "In the fourth quarter, prices for DRAM and NAND are expected to rebound simultaneously for the first time in two years since the third quarter of 2021."

Additionally, demand is expected to remain robust. Hyundai Motor Securities forecast that the global HBM market will grow from $2.3 billion (approximately 3 trillion won) last year to $10.3 billion (about 13.9 trillion won) by 2025, with an average annual growth rate of 64%. They anticipate increased demand for artificial intelligence (AI) servers, including graphics processing units (GPUs). Researcher Hyunggeun Ryu explained, "Currently, the unit price of HBM commands a premium about 6 to 7 times higher than conventional DRAM," adding, "While the price decline of general DRAM due to the prolonged downturn has been significant, the main reason customers continue to purchase HBM at high prices even during the downturn is its performance."

In particular, although the overall semiconductor investment scale is expected to decrease next year, investments related to DDR5 semiconductors and HBM, which have strong demand, are expected to continue, benefiting related equipment stocks. Samsung Securities researcher Hyunggeun Ryu said, "Investments in leading-edge process transitions and HBM production capacity expansion are still expected to be strong," adding, "This is judged to be aimed at actively responding to the demand for new products with strong demand." He further noted, "There is also potential for the industry's HBM expansion scale to increase."