Kwon Young-hwa: "If you invest long-term in Samsung Electronics, bury it."

Professor Kwon Young-hwa advised that if you are investing in Samsung Electronics for the long term, the best approach is to bury it and not look at it, citing his experience of significant profits after over two years of initial losses. The turning point he suggested is two years, after which he began to see substantial profits.

Therefore, his conclusion is that for long-term investment, it's best to bury the shares and not look at them. Conversely, he stated that he has not experienced short-term buying and selling.

Foreign institutions, especially Nomura Securities, are very positive about Samsung. Nomura Securities expects the price to reach 670,000 won.

According to Professor Kwon Young-hwa, if investor sentiment recovers, many people will buy shares, leading to an upward trend in the long run.

Professor Kwon Young-hwa pointed out that the PER in the United States is much higher, whereas Samsung's PER is still quite low. In his view, it is not overvalued.

However, he noted that many people are still holding shares at a loss. While some have made money from past purchases, those who bought and sold midway, experiencing declines from their peak, are now contemplating whether to consistently average down or not.

Professor Kwon Young-hwa advised, "If you are investing for the long term, bury them and leave them." He drew a line, stating that he has not experienced short-term buying and selling. His perspective is that in the long term, the trend will be upward.

He mentioned that there might be people worried about potential incidents abroad who sold before Chuseok. He pointed out that investors who bought and sold midway, and are now down from the peak, are deliberating whether to consistently average down or wait for a sharp drop.

"If you are investing for the long term, I advise you to bury them and leave them. But if you are buying and selling short-term, I haven't experienced that myself. In the long term, it will trend upwards, I assure you."

Professor Kwon Young-hwa explained that foundry, memory, and system semiconductors each account for about half of Samsung's business. He analyzed that even if the foundry deficit is resolved, its impact on stock price might not be significant compared to memory, and TSMC's dominance with over 70% market share is not easily broken. He answered that this is reflected in the stock price.

His reasoning is the business composition. In the current situation, memory and system semiconductors are about half and half, meaning half of the market is for system semiconductors. TSMC dominates with a 70% market share, which is not easily broken.

TSMC dominates the market with over 70% share, and that situation is not likely to change easily. Samsung currently holds only about 6% market share.

Professor Kwon Young-hwa predicted that Samsung could reach 30% in 10 years. Going from 6% to 30% would be a five-fold increase. However, there's a history of past attempts by the second-place company to overtake the leader that did not succeed. Ten years ago, TSMC only had 50%, and Samsung once approached 20%.

The market itself is growing. The semiconductor market, including system semiconductors, used to have a growth rate of about 7% for several years, but now system semiconductors are growing at 14%, more than double, and are expected to reach 18%.

Memory is much larger and contributes significantly to sales. He assessed that while Samsung's market share has decreased, its performance has actually increased.

Professor Kwon Young-hwa assessed that Exynos is doing well currently, is being widely used in smartphones, and Samsung recently announced it became number one and its performance is significantly improving. The reason is its extensive use in smartphones.

He mentioned Samsung's recent announcement of becoming number one, along with reports of exceeding a certain market percentage. He added that next year will likely be even better, and performance is significantly improving.

Professor Kwon Young-hwa predicted that Samsung would take on many orders since emission capacity is full and no more can be accepted. The Taylor plant will begin operations soon, with mass production starting next year.

Recently, there are reports of ACM yield reaching 80% and the Inanho process yield exceeding 70%. The turning point he sees is after the Taylor plant stabilizes and yields become consistent. He expects many orders then, diagnosing that the current situation is highly favorable for Samsung.

A foundry's turnaround to profit aids company stability. However, the same logic negatively impacts the mobile phone business division. This is because memory prices have become too expensive, leading to a significant increase in phone prices.

When asked if a decrease in sales could hold back Samsung Electronics' stock price, Professor Kwon Young-hwa pointed out that a deficit of trillions of won already occurred in the second quarter. He predicted that due to excessively high memory prices, it will be difficult for some time, and recovery may take several years.

The recovery condition he proposed is price stability. He stated that some level of expectation might be possible after memory prices stabilize to a certain extent, but in the current situation, it is likely to remain challenging for several years, and this is already anticipated.

Professor Kwon Young-hwa said he was surprised by the reaction to Astra. There's talk that the market's response was unexpectedly strong, which he interpreted as implying that Claude or Gemini might think they need to further increase AI-related investments to avoid falling behind.

Overall, he seems to believe that the current AI bubble theory is overly exaggerated, too extreme.

The criticism emerged that bottlenecks definitely exist, hindering AI plans. The argument is that AI skepticism and bubble theories overlook issues like power supply.

Professor Kwon Young-hwa cited HBM as a figure. Currently, only 60% of supply can be met. CPUs are also experiencing severe shortages, and 2.5D packaging is bottlenecked by excessive volume. MLCC components and power supply are in similar situations.

It would be understandable if semiconductors were 100% supplied, but currently, only 60% can be provided, causing bottlenecks everywhere. Professor Kwon Young-hwa cited data from Korean semiconductor exports: while volume did not increase, unit prices exploded, leading to a massive surge in revenue.

Supply will increase somewhat from late 2027 to 2028. While revenue grows, more components are being exported. The question was also raised whether building data centers would truly lead to power shortages. He observed that so far, existing power grids sufficed because volume had not increased, but this will not be the case in the future.

Even if everything goes well, opposing opinions are bound to emerge. Professor Kwon Young-hwa said that it's impossible for everything to be 100% perfect.

He explained that everything in life proceeds through thesis, antithesis, and synthesis, and there's a stock market adage that when everyone agrees it will happen, it often doesn't. He noted that when the price hit 370,000 won, there was talk of it reaching 500,000 or even 4,000,000 won, but when it dipped, anxiety appeared. He advised against being too swayed by external negative factors, as it can cause emotional distress.

The issue was raised that for the medium to long term, the US will either foster its own companies while damaging Hynix and Samsung, or push for factories to be built in the US. Professor Kwon Young-hwa replied that the latter is more likely. He predicted that Samsung and SK originally had no intention to invest in memory, but the US government has been exerting immense pressure to invest recently, and they might eventually succumb to this pressure and invest. Professor Kwon Young-hwa sees this as the US siphoning off money earned by Korean companies.

The medium-to-long-term scenario he outlined has two paths. Either the US will foster its own companies while damaging Hynix and Samsung, or it will try to prevent Korea from continuing to earn money by pushing them to build factories in the US. He replied that the latter, pressure to build factories within the US, is more likely. He predicted that Samsung and SK originally had no intention to invest in memory, but the US government has been exerting immense pressure to invest recently, and they might eventually succumb to this pressure and invest.

Concerns were raised that continued investment in the US would reduce operating profit. Professor Kwon Young-hwa countered that it's not necessarily so, as investment brings various benefits.

He cited three benefits: the US would provide many subsidies and various forms of support; having customers all in the US makes local production much more advantageous; and direct delivery eliminates the need for logistics. He explained that various costs would be saved, customer demands could be met immediately, and problems resolved swiftly.

Professor Kwon Young-hwa recounted that in the past, many companies investing in China also learned those technologies.

His explanation of the structure is this: all employees are local, so their skill level increases, and then those people leave to start their own companies. Ultimately, technological capability is bound to rise. He pointed out that this is an unavoidable situation, so the approach is to react to it and secure some practical benefits.

Professor Kwon Young-hwa believed that foreign investors would sell if the price falls and probably also sell if it rises, because they need to realize profits. What he considers important is whether foreign investors can return.

Currently, foreign ownership is only 46-47%. He explained that it used to be over 50%. He believes that if performance improves, it will likely return to over 50% as before, which would reflect much more positively on the stock price.