It has been predicted that the stock price of Samsung Electronics may rise again after a prolonged period of weakness. Some securities firms even predicted that Samsung Electronics’ stock price could surpass 100,000 won ($74.25).
As one of South Korea’s largest companies, Samsung Electronics has faced challenges in performance, leading to a period of stagnation in its stock prices.
KB Securities upgraded Samsung Electronics’ target stock price to 110,000 won ($81.64), a 15.8% increase, citing that the company has entered a normal earnings trajectory. As of the previous trading day, Samsung Electronics closed at 84,100 won ($62.41).
According to Kim Dong-won, an analyst from KB Securities, the reason for the increase in net profits for this year and next year is the upward revision of DRAM and NAND price estimates, which have been raised by 40.4% and 51.8%, respectively, compared to the same period last year.
As a result, this year’s net profits of Samsung Electronics have been revised upwards by 19.1% to $23 billion, while next year’s net profits have been revised upwards by 16.2% to $31.9 billion.
Kim also stated that Samsung Electronics’ memory business operating profit is expected to get better by $22.2 billion this year to $13.3 billion.
Additionally, the company’s foundry business is expected to turn a profit from the third quarter, with a $1.4 billion performance improvement compared to the previous year. Therefore, the company’s Device Solution (DS) business operating profit is expected to improve by $23.7 billion to $12.6 billion this year.
Also, he expected the earthquake that occurred in Taiwan in April is expected to have a positive impact on Samsung Electronics in the second quarter’s DRAM and foundry price negotiations. This is because of the disruptions in production at Micron and TSMC.
“Samsung’s foundry will turn to profit from the second half of the year due to an increase in operation rate. From 2025, significant performance improvements are expected as Samsung’s AGI (General Purpose Artificial Intelligence) semiconductor, ‘Mach-1′, starts being supplied to data center companies from the second half of this year,” Kim explained.
There are several factors that could positively impact Samsung Electronics’ corporate performance this year. In particular, Hyundai Motor Group is expected to order high-performance AI chips that support Software Defined Vehicles (SDV), which will use Samsung Foundry’s 5nm process.
This will be done through a Design Solution Partner (DSP), which is a service and supply chain management company that works with Samsung Foundry. DSP’s team members have a variety of design track records and expertise in Samsung Foundry’s process offerings.
According to Kim, “Samsung Electronics is expected to lay the groundwork for expanding its foundry market share in the future by starting mass production of the 2nm GAA (Gate-All-Around) process from 2025.”
GAA is a technology first developed by Samsung Electronics that improves semiconductor power consumption and performance compared to the existing FinFET technology. A FinFET is a type of field-effect transistor (FET) that has a thin vertical fin instead of being completely planar.
