As concerns grow over a "Black Monday" on Korea's stock market following a steep drop in U.S. semiconductor stocks, Japan's Nomura Securities sharply raised its target prices for Samsung Electronics and SK hynix, bolstering the case for a long-term rise in chip shares. The firm said investors should focus on structural growth centered on artificial intelligence (AI) rather than short-term corrections.
According to the financial investment industry on the 17th, Nomura, in a recent report, raised its target price for Samsung Electronics to 590,000 won from 340,000 won and for SK hynix to 4,000,000 won from 2,340,000 won. This is the first time SK hynix's target has been presented in the 4,000,000-won range. The upside from current levels exceeds 100% for both stocks.
The report is drawing attention because it was released right after global investor sentiment toward semiconductor stocks deteriorated sharply. On the 15th (local time), profit-taking in tech names swept the New York stock market on worries about inflation driven by high oil prices and the impact of rising interest rates. Nvidia, Micron and Intel all plunged, and the Philadelphia Semiconductor Index fell more than 4%. The Korean market is also facing the prospect of weakness led by chip stocks on the 18th.
Nomura instead focused on structural changes in the memory industry. It said the sector is shifting from a traditional cyclical industry—where results swung with demand for PCs and smartphones—to one of long-term growth based on the expansion of AI infrastructure.
In particular, it projected that the spread of agentic AI will explosively increase memory demand. As AI uses large amounts of KV (Key Value) cache memory to store and utilize values from prior calculations during inference, demand for AI memory, including high bandwidth memory (HBM), is bound to surge. Nomura forecast that while memory demand could increase by thousands of times over the next five years, the pace of supply growth will be limited to about 30% a year.
An expansion of data center investment was also cited as a key driver. Nomura projected that global data center capital expenditures (CAPEX) will grow from $1.16 trillion in 2025 to between $5 trillion and $6 trillion in 2030. It also expected memory's share of that to expand from the current 9% level to the 20% range.
It also mentioned the possibility of a valuation re-rating. Nomura said that while the 12-month forward price-earnings ratios (PER) of Samsung Electronics and SK hynix are currently around 6 times, the companies could warrant TSMC-level valuations given their positions as key players in the AI Semiconductor supply chain.
Nomura projected that Samsung Electronics' operating profit will rise from 307 trillion won in 2026 to 511 trillion won in 2028. SK hynix is also estimated to expand from 281 trillion won to 480 trillion won over the same period. In particular, SK hynix is expected to directly benefit from growing AI memory demand thanks to its leadership in the HBM market.