[Click eStock] "Samsung Electronics, Profitability Improvement Due to Memory Price Increase"

[Image source=Yonhap News]

DS Investment & Securities analyzed on the 25th that Samsung Electronics is expected to see profitability improvement in the second half of the year due to the rise in legacy DRAM prices.

Researcher Lee Surim of DS Investment & Securities stated, "We forecast 2024 sales to increase by 19% year-on-year to KRW 308.8 trillion, and operating profit to grow by 470% to KRW 37.4 trillion."

Lee explained, "Considering the high market share in the general-purpose DRAM and NAND markets, the profit improvement effect from rising memory prices will become greater as we move into the second half."

Lee also predicted that the memory upcycle will continue. He analyzed, "Although the rate of memory price increase will slow down in the second half, strong demand for HBM is encroaching on 1a (4th generation) and 1b (5th generation) wafer production capacity (CAPA). Compared to this, suppliers' new investment stance remains conservative, so it is still too early to discuss the end of the cycle."

It is also encouraging that signals of investment recovery in general servers have recently been detected, and DDR5 spot prices are also rising. Lee assessed, "Samsung Electronics currently has the advantage of ample investment resources and available fab space compared to competitors, which increases its investment attractiveness when IT demand rebounds."

He added, "There is also an ongoing expectation that significant deliveries to major customers related to HBM3e during the second half will act as a trigger for the stock price."