Samsung Electronics · SK Hynix, stock price targets significantly raised driven by AI demand

Citigroup reflects an optimistic outlook on the memory semiconductor industry’s recovery, significantly raising the target stock prices for Samsung Electronics and SK Hynix. The background is that, with the proliferation of artificial intelligence, demand for high-performance memory is increasing, and prices are expected to continue rising in the second half of the year.

According to financial investment industry reports on the 12th, Citigroup, in a report released on May 11th, raised Samsung Electronics’ target stock price from the original 300k Korean won to 450k won, and SK Hynix from 1.7 million won to 3.1 million won, both with buy ratings. The target stock price is the level that securities firms or investment institutions consider appropriate for the future, which is interpreted as an improvement in the performance and industry prospects of the related companies.

Citigroup believes that it is highly likely that global memory prices will continue to rise in the second half of this year. In particular, factors such as the expansion of token limits by Anthropic, the operator of AI chatbot Claude, the promotion of the new memory module SOCAM2, and the rising sales prices of high-bandwidth memory (HBM) are seen as driving prices higher. The report forecasts that the average selling prices (ASP) of DRAM and NAND in the second half of this year will increase by 200% and 186% respectively compared to the same period last year, surpassing previous estimates of 190% and 172%. The growth rate forecast for solid-state drives (SSD) has also been revised upward from 242% to 267%.

The core logic for SK Hynix is similar. Citigroup assesses that if HBM prices rise more than expected in the second half, the prices of general memory may also continue to increase. It is expected that the average selling price of HBM in the fourth quarter will be 30% higher than the previous quarter. Additionally, the rising prices of 64GB DDR5 RDIMMs for servers and the official application of SOCAM2 are also seen as factors pushing up mobile DRAM prices. RDIMM is a type of DRAM module used in servers and workstations, which incorporates registers or buffer chips in the middle to ensure stable memory signal processing.

The core of this report is not only the upward revision of the target stock prices for the two companies. The market is paying attention to whether the expansion of AI investment will not only impact high-value memory such as HBM but also trigger a chain reaction affecting the prices of ordinary DRAM and NAND. If this trend can translate into actual performance improvements, the valuation re-evaluation of domestic semiconductor giants may further continue. However, given that memory industry prosperity fluctuates significantly with demand changes and supply adjustments, how long the upward price trend can last remains a key variable in stock price movements.