Samsung sets market cap record as analysts forecast chip 'supercycle' will end 'winter'

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Samsung sets market cap record as analysts forecast chip 'supercycle' will end 'winter'

Published: 23 Sep. 2025, 19:06 Updated: 23 Sep. 2025, 19:49

PARK EUN-JEE
[email protected]

Audio report: written by reporters, read by AI

An engineer checks a monitor at Samsung Electronics' semiconductor plant in Hwaseong, Gyeonggi. [SAMSUNG ELECTRONICS]

[NEWS ANALYSIS]

An anticipated memory chip “supercycle" forecast in a recent Morgan Stanley report and elsewhere is lifting the outlook for Samsung Electronics and SK hynix, boosting their bargaining power in price negotiations and sending their shares soaring.

The market cap of Samsung Electronics exceeded the 500 trillion won ($359 billion) mark for the first time to close at 84,700 won per share on Tuesday, boosted by higher prices and demand for chips across the board.

Shares of SK hynix recorded an all-time high of 361,000 won the same day, up 2.85 percent compared to the previous day.

The boom in the memory chip sector began with high bandwidth memory (HBM) chips — a high-end component essential for AI — but demand is now expanding to more widely used memory types such as double data rate (DDR), low-power DDR (LPDDR) and NAND flash chips, including enterprise solid-state drives (eSSDs).

Under the title “Memory Supercycle — Rising AI Tide Lifting All Boats,” the New York-based brokerage predicted a steady price growth in the memory market through 2026 and upped its target prices for the Korean memory giants.

An end to winter?

Only a year ago, Morgan Stanley released a report with a strikingly grim tone, which sparked heavy sell-offs of both Samsung Electronics and SK hynix.

In its “Winter Looms” report, Morgan Stanley downgraded its industry view on Korea’s technology from “neutral” to “cautious,” and lowered its investment rating for SK hynix from "Overweight" to "Underweight."

Now, the brokerage has raised its target price for Samsung Electronics by 12 percent, from 86,000 won to 96,000 won while upgrading its investment rating from "Equal-weight" to "Overweight" for SK hynix with a target price adjustment from 260,000 won to 410,000 won.

For Samsung, the shift in investor sentiment is attributed to the latest custom chipmaking deals with big clients like Apple and Tesla as well as the reported passage of an Nvidia quality test for 12-layer fifth-generation high bandwidth memory, HBM3E.

“With its foundry business having passed the bottom of its earnings cycle, the company is expected to return to profit by 2027,” noted Son In-joon, an analyst at Heungkuk Securities, referring to the contract chipmaking business that suffered losses over the past quarters.

"Investment appeal is also rising, as fundamentals improve across the board — including the upcoming shipment of HBM3E 12-layer products to major customers,” the analyst said.

SK hynix's M16 plant in Icheon, Gyeonggi [SK HYNIX]

SK hynix already supplied the product to Nvidia and completed the development of next-generation HBM4. It also has a competitive edge in the high-performing NAND flash segment after acquiring Intel’s NAND business. Solidigm, born out of the Intel unit, is known for garnering strong business ties with U.S. Big Tech firms like Amazon and Google, which aggressively invest in servers for AI.

“Following DRAM, NAND is also beginning to feel the impact of AI-driven demand,” said Kim Un-ho, an analyst at IBK Securities.
“While expectations for a recovery in Quad-Level Cell NAND demand have been building since last year, the trend is projected to gain momentum starting in the third quarter,” Kim noted, adding that the demand from Big Tech far exceeds supply.

Restrained capacity from competitors

Samsung and SK hynix stand out as the major beneficiaries of AI-driven memory demand as they have sufficient room for ramping up capacity in the face of surging orders.

Competitors like Micron and CXMT, on the other hand, face capacity constraints.

“Micron is unable to significantly expand front-end capacity until its new fab in Idaho becomes operational in 2027, due to space constraints at its sites in Taiwan and Japan,” said Park Sang-wook, an analyst at Shinyoung Securities, projecting Micron’s monthly capacity at around 340,000 wafers throughout this year and next.

In the case of China’s CXMT, the production capabilities have been hampered by lower yield as it lags behind on the technology road map.

“CXMT, which had been aggressively expanding until this year, is now focusing on conversion investment to diversify its portfolio beyond LPDDR4 into server-grade DDR5 and HBM3,” Park noted, “However, the company is reportedly facing ongoing issues with heat generation and low yield in its server product lines. Consequently, Chinese customers are said to be cutting back on DDR5 server orders previously allocated to CXMT.”

BY PARK EUN-JEE [[email protected]]