South Korea’s leading brokerage firms have sharply downgraded their 2025 earnings forecasts for Samsung Electronics, cutting projected operating profits by trillions of won in just a month. While some have criticized the revisions as overly pessimistic, industry insiders argue they are justified.
The downgrades stem from intensifying competition from overseas rivals offering aggressive pricing and concerns over potential tariff hikes on semiconductor-inclusive products under a second Trump administration. Samsung shares, which traded at 80,000 won earlier this year, now hover around the 50,000-won range, reflecting these challenges.
As of December, eight brokerage firms significantly lowered their operating profit projections for Samsung compared to reports issued just a month or two earlier.
NH Investment & Securities made the steepest cut, slashing its 2025 forecast from 46.03 trillion won in early November to 35.14 trillion won by mid-December — a reduction of more than 10 trillion won. Other firms followed suit:
- Daol Investment & Securities: 48.97 trillion won → 38.78 trillion won
- Yuanta Securities Korea: 46.86 trillion won → 37.91 trillion won
- BNK Securities: 40.39 trillion won → 34.21 trillion won
- IBK Securities: 40.53 trillion won → 35.45 trillion won
- Eugene Investment & Securities: 39.97 trillion won → 36.18 trillion won
- Kiwoom Securities: 42.06 trillion won → 39.47 trillion won
The cuts are largely attributed to Chinese semiconductor firms, including ChangXin Memory Technologies (CXMT) and Fujian Jinhua Integrated Circuit (JHICC), which are flooding the market with low-cost products. These companies have priced DRAM chips as low as $0.75 per unit, just one-third of the market price of $2.10, undercutting Samsung’s pricing power.
Weakening demand compounds the problem. While memory chips for artificial intelligence applications remain in high demand, sales of Samsung’s staple products for PCs and smartphones — traditionally its core markets — are slowing.
“Demand for lower-cost products is surging, highlighting the growing influence of CXMT,” said Ryu Young-ho, an analyst at NH Investment & Securities. “Samsung’s stock price already reflects concerns about its technological competitiveness and China’s market share gains, with its price-to-book ratio now trading at around 1.0.” For context, Samsung’s PBR stood at 1.69 in July, when its stock price peaked at 87,800 won.
Daol Investment & Securities noted that Samsung might be forced to cut prices for DRAM and NAND chips to stay competitive. “The downward revisions to Samsung’s earnings forecast reflect adjustments to the annual average selling prices for DRAM and NAND,” said Ko Young-min, an analyst at Daol. “With sluggish demand in mobile and display sectors, the company’s overall growth momentum remains weak.”
Hyundai Motor Securities analyst Noh Geun-chang echoed these concerns, pointing to Samsung’s lower profit margins in high-bandwidth memory (HBM) chips and limited ability to offset falling prices in general-purpose memory. “Tariff hikes under a second Trump administration could further suppress demand for finished products containing memory chips, restricting Samsung’s profit recovery,” Noh said.
