SK Securities has sharply raised its target prices for Samsung Electronics and SK Hynix, citing structural changes in the memory industry driven by the rapid expansion of artificial intelligence (AI).
In a report released on April 8, the brokerage increased its target price for Samsung Electronics to KRW 400,000 from KRW 300,000, and for SK Hynix to KRW 2,000,000 from KRW 1,600,000, maintaining a “buy” rating on both companies. The upward revision reflects stronger-than-expected memory price trends and improved earnings stability supported by the expansion of long-term supply contracts.
According to the report, the memory industry is gradually moving away from its traditional cyclical nature. While long-term contracts may cap price spikes during upcycles, they provide downside protection during downturns, ultimately reducing earnings volatility. In an environment where capacity expansion remains constrained, such contract structures are also expected to mitigate the risk of oversupply.
Earnings forecasts were revised significantly upward. SK Securities projects Samsung Electronics’ operating profit to reach approximately KRW 326 trillion in 2026 and KRW 417 trillion in 2027, with memory expected to account for the bulk of earnings. For SK Hynix, operating profit is forecast at around KRW 253 trillion in 2026 and KRW 328 trillion in 2027.
SK Hynix, in particular, was noted for maintaining solid profitability even during periods of declining DRAM prices. Despite a still-limited share of high-bandwidth memory (HBM), the company’s stable earnings suggest that a shift toward higher-value products and evolving contract structures is already having a tangible impact.
The report also highlighted AI-driven demand as a key growth driver. With global investment in AI infrastructure expected to remain intact and memory continuing to serve as a critical bottleneck, mid- to long-term demand is likely to stay robust.
As a result, earnings estimates saw substantial upward revisions. Samsung Electronics’ quarterly operating profit forecasts for 2026 were raised by as much as 60%, with similar increases for its memory division. SK Hynix’s overall earnings outlook was lifted by up to 40%, with even larger upward adjustments in its NAND business.
SK Securities concluded that these structural shifts could lead to a broader re-rating of the sector. The memory industry, once characterized by sharp cyclical swings, is evolving into a more stable, cash-generating business. This transition could also support stronger shareholder returns, including higher dividends.
“The re-rating of the memory industry in the AI-driven growth cycle is still in its early stages,” the brokerage said, reaffirming its overweight stance on the semiconductor sector.
