Meritz Securities of South Korea: This is not the time to sell Samsung and SK Hynix; the market has a major misjudgment

BlockBeats message, July 17, Korean Meritz Securities researcher Kim Sunwoo said that the market has an exaggerated misunderstanding of the fundamentals of Samsung Electronics and SK hynix. At present, investors should not make short-sighted and pessimistic judgments about the semiconductor sector based solely on fragmented information.

Regarding rumors that SK hynix secures orders by cutting prices when signing long-term supply agreements with large technology companies, Kim Sunwoo said the arrangement is not a pure sacrifice of price, but a strategic investment to lock in demand from the generative AI and AI data center markets in advance. The company is expanding its mid- to long-term customer base through joint ventures and partnerships.

He expects that in the second half of this year, the DRAM demand fulfillment rate will be only 75% to 80%, and could fall further to the 60% range next year. Even if only real end-market demand is considered, the demand fulfillment rate would be only about 70%, and the supply shortage will still deepen.

Kim Sunwoo believes that Samsung Electronics’ share buybacks, cancellations, and dividends, as well as SK hynix’s potential launch of special dividends, will help ease market concerns. He also said both companies are currently in a phase of severe undervaluation and over-adjustment.