KB Securities has identified Samsung Electronics as a major beneficiary of the expanding Google artificial intelligence (AI) ecosystem. The firm maintained its investment rating of 'Buy' and target price of 600,000 won.
Kim Dong-won, head of research at KB Securities, stated, "With the planned expansion of HBM4 production in 2027 and the new HBM4E mass production set for the first half of 2028, structural constraints on general DRAM production capacity will be unavoidable for an extended period. We expect the memory supply shortage to worsen until 2028."
KB Securities forecasts that the share of HBM in DRAM wafer production capacity will more than double from 15% this year to 34% next year. As most new DRAM production capacity will focus on HBM, memory prices are expected to rise by at least 30% in the third quarter, despite an increase in long-term supply agreements (LTA).
The company's performance is also expected to show significant improvement. For the third quarter, revenue and operating profit are estimated to reach 209 trillion won and 110 trillion won, respectively, marking increases of 143% and 805% compared to the same period last year. Analysts anticipate a third consecutive earnings surprise.
In particular, benefits from Google's increased investment in AI are expected. This year, Google's AI investments are projected to account for more than a quarter of the total AI investments by major U.S. tech companies.
Kim noted, "Samsung's memory supply to Google is estimated to meet 50% of server memory demand and 80% of HBM demand. Samsung holds the top market share in memory supply to Google, making it the largest beneficiary of the Google AI ecosystem."
* This article has been translated by AI.
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