Daesin Securities called recent semiconductor stock declines 'irrational' on the 22nd, maintaining its overweight rating. The firm reaffirmed buy ratings for Samsung Electronics (target price 560,000 won) and SK Hynix (target price 3.9 million won). Analyst Ryu Hyung-geun stated the market experienced excessive drops amid peak debates and forecast Q3 generic DRAM prices will rise over 20% quarter-on-quarter, with NAND up in the mid-to-high teens. The report cited suppliers' customized pricing strategies and supply shortages as recovery drivers.
Daesin Securities Forecasts Q3 Memory Price Increases
Ryu Hyung-geun forecast Q3 generic DRAM prices will increase over 20% (low-to-mid twenties) quarter-on-quarter, while NAND flash prices will rise in the mid-to-high teens on a global basis. The analyst noted price increase rates may vary among suppliers due to differing baseline burdens. Ryu stated the market should focus on suppliers' customized pricing strategies proving their effectiveness again.
Suppliers Implement Customized Pricing Strategies
The report stated that in supply shortage environments, pricing strategies differ by customer and application, with priority given to customers expected to purchase more immediately and in the future. Ryu described this as a natural progression, noting that a "memory semiconductor-driven power game" continues. The analyst stated some customers who survived through chip deflation benefits will face inevitable short-term profit damage.
Legacy Semiconductor Prices Surpass HBM in Supply Shortage
Demand for legacy semiconductors persists across multiple applications, according to the report. Supplier production continues to shrink further amid product mix transitions, and customers are accepting sharp price increases in the extreme supply-demand imbalance. Ryu noted some legacy products are trading at higher prices than high-bandwidth memory (HBM) in an unusual phenomenon. The analyst stated DDR4 and LPDDR4 will see the strongest price increases among product categories.
Long-Term Contracts Expand with Enhanced Terms
Ryu stated long-term contract (LTA) expansion continues as customer and supplier interests align on building stable memory semiconductor supply chains for the AI cycle. The analyst noted two market misunderstandings: first, LTAs do not apply to all customers but are concluded with core customers capable of synergy through strong partnerships. Second, the market focuses narrowly on LTA's short-term price suppression effect rather than medium-to-long-term value including cycle duration extension and synergy in AI-customized new business development.
The report stated early contracts were structured with both price floors and ceilings, but as supply shortage intensity deepened, subsequent contracts feature only price floors or fixed pricing throughout the contract period. Ryu cited early contract extension options as a representative example of measures to enhance contract value, stating such options allow suppliers to decide contract renewal well before expiration rather than near the end, enabling flexible capacity management and increasing cycle volatility reduction visibility.
FAQ
What investment ratings did Daesin Securities give Samsung Electronics and SK Hynix stocks?
Daesin Securities maintained buy ratings for both Samsung Electronics with a target price of 560,000 won and SK Hynix with a target price of 3.9 million won on the 22nd.
Why did Daesin Securities call recent semiconductor stock declines irrational?
Analyst Ryu Hyung-geun stated the market experienced excessive stock price drops amid untimely peak debates, and the firm forecasts Q3 generic DRAM prices will rise over 20% quarter-on-quarter with NAND up in the mid-to-high teens, driven by suppliers' customized pricing strategies and supply shortages.
How are long-term contracts for memory semiconductors changing?
Early long-term contracts featured both price floors and ceilings, but as supply shortages intensified, newer contracts include only price floors or fixed pricing throughout the contract period, with enhanced features such as early renewal options to enable flexible capacity management.
