Global investment bank (IB) Morgan Stanley projected that a bull market (super cycle) for memory semiconductors will unfold and raised its target prices for Korea's semiconductor corporations Samsung Electronics and SK hynix.
According to the financial investment industry on the 11th, Morgan Stanley stated accordingly on Oct. 10 (local time) through its report "Memory–Maximum Pricing Power."
Morgan Stanley cited the memory semiconductor super cycle, saying, "DRAM prices have surpassed a record high," and added, "New price peaks generally lead to new stock price peaks, and this time there is plenty of revenue to support them."
It added, "The long-term growth driver of artificial intelligence (AI) remains solid," and "The rise in memory prices is uncharted territory, and given the strength of the cycle, the earnings outlook is quite bright."
In fact, memory prices are surging. The spot price of DDR5 (16Gb) was $7.5 in September, but is now $20.9, up 336%. This far exceeds market expectations.
Morgan Stanley set Samsung Electronics' target price at 144,000 won. It also saw that in a bull market, it could rise to 175,000 won.
It then set SK hynix's target price at 730,000 won. In a bull market scenario, it projected the price could rise to 850,000 won. The analysis is that SK hynix's market dominance in high bandwidth memory (HBM) will continue.
The bull market scenario target price (850,000 won) was calculated based on the price-earnings ratio (PER·market capitalization ÷ net profit).
Previously, Morgan Stanley fanned the semiconductor winter theory by releasing last year the reports "Memory-Winter Always Laughs Last" and "Winter looms," but from this year it changed its stance, saying it could be "A Warm Winter This Year."
On the 9th of last month, it also raised the target for Samsung Electronics to 110,000 won and SK hynix to 480,000 won. As the stock prices of the two stocks have risen steeply recently, it is interpreted that the target prices were raised again after just a month.