Samsung Electronics and SK Hynix Investment Strategies

This decoupling is attributed to Samsung Electronics' HBM4 leadership expectations and rumors about some production issues at SK Hynix. Experts diagnose that HBM4 production issues are surmountable and short-term stock price differences should not be given significant importance.

Recent securities firm reports tend not to be fully reflected in market consensus due to analyst vacancies. While these reports anticipate around ₩100-105 trillion, the actual figures are closer to ₩103-104 trillion.

In September, semiconductor exports exceeded 50% of total exports, with MCP exports, including HBM, surging. Despite the effect of a declining exchange rate, the rise in average selling price (ASP) offsets this, and final earnings are expected to approach ₩105-110 trillion.

The 'sell-on' pattern, where stocks are sold during Samsung Electronics' earnings announcements, has been repeatedly observed.

Considering the decoupling trend between Samsung Electronics and SK Hynix, a slight downward trend for confirmation of materials, rather than a stock rebound, is expected after the earnings announcement.

Ahead of the confirmed earnings announcement at the end of October, preliminary earnings serve only as a limited means to gauge whether they exceed market consensus.

As seen in Micron's case, questions about the industry's supply and demand direction will continue, and market forecasts for 2027 will likely be detailed.

Similar to Micron's earnings announcement, there will likely be a Q&A session on the industry's supply and demand direction. In preliminary earnings announcements, the crucial point is whether the earnings meet the consensus.

Life Asset Management's proposal for Samsung Electronics to buy back and cancel shares highlighted the importance of shareholder-friendly policies. A balanced approach balancing stable dividends and share cancellation to improve per-share value is needed.

While institutional limitations on share cancellation due to the Financial Industry Separation Act are clear, wisdom is needed to find solutions through discussions with policy authorities. Detailed aspects of shareholder-friendly policies and policy solutions for supply and demand stability are required.

Amid high interest rates, foreign investors tend to reduce their exposure to risky assets. When cutting investments in emerging markets, sales tend to concentrate on highly liquid markets like South Korea.

Samsung Electronics and SK Hynix often had foreign ownership exceeding 50%, but it has now fallen to the 40% range. This indicates that while fundamentals are solid, stock price volatility is increasing due to supply and demand factors.

The discussion about a supply shortage extending to 2028 has emerged.

This reflects expectations for the direction of the semiconductor market, linked to AI data center facility investments.

The semiconductor cycle's peak may be reached around 2030-2031, later than the initially anticipated 2028. This is due to additional demand exceeding the long-term supply agreements (LTAs) of major hyperscalers.

A market trend of securing volume even at rising prices has formed. Additional contract prices compared to existing LTAs are higher, leading to an expected increase in average selling price (ASP) and a prolonged period of high prices.

They are accelerating AI investments by raising funds through structured deals combined with financial institutions.

Customer companies prioritize securing volume over memory prices, and unlike in the past, stable supply chain maintenance, not cost proportion, has emerged as a key factor.

However, demand growth is projected to exceed 25%, likely intensifying the supply shortage. Consequently, competition for volume between data centers and general IT products is expected to be fierce.

Unlike the 2018 and 2019 cycles, data center investments are continuing despite a shrinking smartphone and PC market.

With data center sales accounting for approximately 63% of Micron's revenue, data centers tend to secure products at higher prices than smartphones or PCs.

Chinese local companies like Tencent, Alibaba, ByteDance, and Baidu are demanding long-term supply agreements (LTAs).

This movement is analyzed as evidence that the current semiconductor supply situation is very tight.

CXMT is an excellent company but faces difficulties in securing semiconductor equipment. This makes it challenging for planned capacity expansions to proceed smoothly.

As a result, CXMT's impact on the fundamentals of Korean companies over the next five years is expected to be limited.

Stock prices of semiconductor CME companies are rising concurrently not only in Korea but also in the U.S., Japan, and Taiwan. TSMC's facility investment has nearly tripled compared to the past, indicating a sustained cycle of increased orders.

However, not all CME companies are rising; a 'barbell strategy' is needed, focusing on investing in companies with verified leading products.

After the first surge, in the second cycle, the number of remaining stocks in the market is likely to slim down. The focus should be on leading companies that have proven their competitiveness, rather than simply those with perceived potential.

Nvidia's case shows a trend where the low point continuously rises even during stock price corrections. It rose until 2024, paused in 2025, and rose again in 2026.

Samsung Electronics and SK Hynix are also currently in a period of correction, but their low points are steadily rising. While it will take time to break through previous highs in the short term, they are ultimately expected to gradually trend upwards like Nvidia.