KB Securities forecasted on July 13 that Samsung Electronics will face an unprecedented memory supply shortage next year, maintaining a 'Buy' rating and 600,000 won target price on Samsung Electronics stocks. KB Securities Research Head Kim Dong-won attributed the shortage to near-zero expansion of new general-purpose memory production capacity combined with big tech companies' long-term supply agreements (LTA) set to begin in earnest. Kim stated that new memory production volumes will be allocated primarily to big tech firms with LTAs, causing general customers to experience cliff-level supply shortages next year. The forecast comes as semiconductor stocks face concerns over peak earnings, with Meta's AI infrastructure investment plans potentially alleviating market worries.
KB Securities Forecasts Zero New Memory Capacity Amid Big Tech Supply Agreements
Kim Dong-won stated that next year's general-purpose memory new production capacity expansion will be virtually nonexistent, while big tech companies' long-term supply agreements will begin in earnest. He said new memory production volumes will be allocated primarily to big tech firms that have signed LTAs. Kim judged that general customers' actual experience of memory supply shortage will intensify to cliff levels next year as a result.
Meta Plans 7GW AI Datacenter Expansion for 2026
Meta plans to add 7 gigawatts (GW) of AI datacenter capacity next year following this year's 7GW construction, securing a total of 14GW in AI computing infrastructure. Kim stated that recent Samsung Electronics stock price adjustments resulted from concerns over AI investment sustainability surrounding Meta's datacenter leasing plans, combined with second-quarter earnings peak debates. He emphasized that if Meta formalizes next year's 7GW AI investment during its second-quarter earnings conference call on July 29, it will serve as a powerful signal to resolve market concerns about AI investment sustainability at once.
KB Securities Estimates Samsung Q3 Operating Profit at 11 Trillion Won
KB Securities estimated Samsung Electronics' third-quarter operating profit at 11 trillion won and fourth-quarter operating profit at 12.4 trillion won. The firm expects earnings improvement to expand compared to the second quarter. KB Securities assessed that SK Hynix's American Depositary Receipt (ADR) strength is expected to create a chain effect not only on the parent stock but also on Samsung Electronics stock price increases. The firm forecasts this will lead to a virtuous cycle of semiconductor rerating.
FAQ
What did KB Securities forecast for Samsung Electronics on July 13?
KB Securities forecasted on July 13 that Samsung Electronics will face an unprecedented memory supply shortage next year, while maintaining a 'Buy' rating and 600,000 won target price on Samsung Electronics stocks.
Why does KB Securities expect memory supply shortages next year?
KB Securities Research Head Kim Dong-won attributed the shortage to near-zero expansion of new general-purpose memory production capacity combined with big tech companies' long-term supply agreements set to begin in earnest, with new production volumes allocated primarily to big tech firms.
What are KB Securities' operating profit estimates for Samsung Electronics?
KB Securities estimated Samsung Electronics' third-quarter operating profit at 11 trillion won and fourth-quarter operating profit at 12.4 trillion won, expecting earnings improvement to expand compared to the second quarter.
