[Click eStock] "Samsung Electronics: Market Recovery Signals from Q3... Target Price Maintained"

On June 18, Daishin Securities maintained its "Buy" investment rating and target price of 74,000 KRW for Samsung Electronics, stating, "While it is not an easy goal to restore technological competitiveness in a short period, the market is expected to start detecting signs of improvement from the third quarter of this year."

On this day, Daishin Securities researcher Ryu Hyungkeun commented, "Weak performance in the first half is inevitable, but shifting the strategy from short-term market share to focusing on strengthening future profit fundamentals should prove effective," adding, "Currently, the stock is trading at 0.9 times its 12-month forward price-to-book ratio (PBR), which suggests a favorable risk-reward profile."

For general-purpose DRAM, certification of DRAM 1b (5th generation) products for major clients is expected to be mostly completed within the first half of the year. Sales contributions are expected to begin in earnest from the third quarter, laying the groundwork for widening the sales gap once again.

In the NAND flash sector, efforts are underway to meet the specifications required for AI (artificial intelligence) inference products. Ryu noted, "The process upgrades necessary for mass production are expected to be completed within the fourth quarter," and added, "Development of V10 (estimated 428 layers) with hybrid bonding is also proceeding as planned."

The HBM (high-bandwidth memory) segment is expected to face short-term weakness. Ryu stated, "Reflecting the delay in entering major North American GPU (graphics processing unit) clients, we have revised this year's HBM sales forecast down from 6.5 billion Gb (gigabits) to 5.5 billion Gb," but also pointed out, "However, for HBM3e, the company has succeeded in entering all but one client, and it is too early to take a pessimistic view of HBM4."

Ryu explained, "The yield rate for the base die (the core component mounted at the bottom of HBM) has reached a stable trajectory, and the yield for DRAM 1c (6th generation) required for mass production of core dies has also shown recent improvement," adding, "With sample supply to major clients planned for August and product certification targeted for completion within the year, it cannot be said that the timeline is significantly delayed."

The operating profit forecast for the second quarter has been revised down from 6.3 trillion KRW to 6.1 trillion KRW, reflecting the downward revision of memory semiconductor profit expectations. Ryu added, "The memory semiconductor industry is not about pioneering new technological standards, but about quickly adapting to established standards," and continued, "As collaboration with customers becomes more important in the AI era, if the company can successfully shift to a customer-centric business strategy, there will be opportunities to regain market leadership."