Recently, Samsung Electronics completely upended market expectations by posting an unprecedented first-quarter operating profit of 57 trillion won. In response, securities firms sharply raised their target prices for Samsung Electronics and SK hynix, signaling the peak of a semiconductor supercycle.
With the increase in memory semiconductor prices far outpacing market estimates, the pace of profitability improvement for the two domestic semiconductor leaders is also expected to be exceptionally steep. Accordingly, some in the securities industry are even floating the unprecedented target prices of "400,000 electronics" and "2 million nics," issuing aggressive buy calls.
On the 10th, Samsung Electronics finished trading at 206,000 won, up 0.98% (2,000 won) from the previous day. SK hynix also closed at 1,027,000 won, up 2.91% (29,000 won).
Earlier, as Samsung Electronics released record-breaking results, the steeper rise in memory semiconductor prices is pushing up earnings expectations across the semiconductor sector, including SK hynix.
In fact, Samsung Electronics disclosed on the 7th that its preliminary first-quarter revenue this year surged 68% on-year to 133 trillion won, while operating profit skyrocketed 755% to 57.2 trillion won. The figures show that the pace of recovery in the semiconductor cycle is completely outstripping market expectations.
Securities firms are also raising target prices one after another. SK Securities set a target price of 400,000 won for Samsung Electronics. Other brokerages also raised their targets for Samsung Electronics to ▲ KB Securities 360,000 won ▲ IBK Securities 350,000 won ▲ Daol Investment & Securities 350,000 won ▲ Yuanta Securities Korea 330,000 won.
Target prices for SK hynix, which is set to announce first-quarter results, are also trending higher. SK Securities proposed 2,000,000 won for SK hynix, while others raised theirs to ▲ KB Securities 1,900,000 won ▲ Yuanta Securities Korea 1,800,000 won ▲ Korea Investment & Securities Co. 1,800,000 won.
The key driver behind the target price hikes is, of course, results. Optimism prevails that both corporations will continue an unprecedented run of earnings thanks to the restructuring of the semiconductor industry.
SK Securities forecast Samsung Electronics' operating profit at 327 trillion won this year and 417 trillion won next year. It projected SK hynix's operating profit at 253 trillion won this year and 328 trillion won in 2027.
KB Securities on this day even offered a "bold outlook" that SK hynix's operating profit this year will exceed those of Microsoft and Google.
KB Securities projected SK hynix's operating profit this year at 251 trillion won. That would surpass Microsoft, ranked fifth globally in operating profit (245 trillion won), and Alphabet, Google's parent company, ranked sixth (240 trillion won).
Kim Dong-Won, head of research at KB Securities, said, "SK hynix's global operating profit ranking is expected to rise from fourth in 2026 to third in 2027," adding, "In particular, in 2027 Samsung Electronics will rank first and SK hynix third in global operating profit's top 10."
Han Dong-hee, an SK Securities analyst, said, "We raised our earnings outlook for this year and 2027 due to memory prices rising more than expected," and added, "Also, as long-term supply contracts take shape, earnings stability has improved."
Expectations also grew that expanding long-term supply contracts will ease the semiconductor industry's distinctive cyclical volatility. With long-term contracts allowing a defense of certain volumes and prices even in downcycles, analysts say corporations' earnings stability will be further strengthened.
It was also expected that the long-term supply contract market will mitigate the risk of oversupply from capacity expansions. One analyst noted, "Operating leverage is not permanent, and given strong demand for artificial intelligence (AI), long-term supply contracts are a rational choice when capacity additions are needed."