① On Friday, SK Hynix's share price rebounded above 600,000 Korean won, while Samsung Electronics' share price reached a new all-time high; ② Nomura Securities raised its target price for SK Hynix from 840,000 Korean won to 880,000 Korean won and increased Samsung Electronics' target share price from 150,000 Korean won to 160,000 Korean won; ③ The bank noted that the profitability of the memory industry is rapidly improving.
Cailian Press, December 26 (edited by Bian Chun) Driven by the strong performance of U.S. stocks and the optimistic earnings outlook under the 'memory super cycle,' the share prices of South Korea’s 'chip duo'—SK Hynix and Samsung Electronics—both rose in early trading on Friday.
SK Hynix's share price rebounded above 600,000 Korean won, and as of press time, it was trading at 602,500 Korean won, up 2.47%; while Samsung Electronics' share price hit another record high, briefly touching 116,900 Korean won during the session, and as of press time, it was trading at 116,500 Korean won, up 4.86%.
On December 25, U.S. stock markets were closed for Christmas. On Christmas Eve (December 24), U.S. stocks rose across the board, delivering the much-anticipated 'Santa Claus rally,' with all three major indices closing strongly higher. This positive sentiment also spilled over into the South Korean stock market.
In addition, it was reported that Nomura Securities recently maintained its 'buy' rating for SK Hynix and set an 880,000 Korean won target share price, up from the previous expectation of 840,000 Korean won.
Nomura Securities stated: 'As artificial intelligence (AI) investments and server deployments continue to increase, pricing power for memory chips is shifting toward suppliers, providing memory companies with a more flexible market environment to adjust their product portfolios.'
Nomura also raised Samsung Electronics’ target share price from 150,000 Korean won to 160,000 Korean won and pointed out that given the continued rise in memory chip prices, Samsung still has significant room for improvement in performance through next year.
'With both commodity DRAM and NAND flash memory prices surging significantly in the fourth quarter, the profitability of the memory industry is rapidly improving,' said Nomura Securities.
The bank noted that commodity DRAM prices rose 30%-40% in the fourth quarter, while server DRAM prices are expected to increase 40%-60% quarter-on-quarter.
Earlier this week, semiconductor industry insiders reportedly indicated that Samsung’s memory business and SK Hynix are expected to achieve gross margins of 63%-67% in the fourth quarter, surpassing Taiwan Semiconductor's 60%.
Editor/KOKO