Korea SK Securities: Memory is the cheapest stock among the bottlenecks of the AI era

"SK Securities continues to view the memory rerating as still only at its earliest stage. TSMC commands a high multiple because it is a platform style manufacturer that enables its customers' futures. The same holds for memory in the AI era. Structurally elevated earnings power and visibility, and the strengthened shareholder returns built on top of them, mean that the memory rerating and the unwinding of the Korean memory discount will move together. With Samsung Electronics and SK Hynix currently trading at around a 12MF P/E of 6.0x, their share prices indicate that they remain the cheapest stocks among the bottlenecks of the AI era. As value within the industry shifts and is reallocated, the metric to trust and follow is the change in earnings power, not a valuation framework anchored in the past. We maintain our Overweight rating on semiconductors."