Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: DS Investment & Securities | Rating: Buy | Target Price: 530,000 KRW (~$397.30 USD)
- Record Earnings: 3Q26 operating profit exceeded 100 trillion KRW for the first time in company history, driven by an explosive recovery in the DS (Device Solutions) division.
- HBM Leadership: Rapid generation transition with HBM4 already accounting for 60% of HBM revenue in 3Q26.
- Outlook: Upward revisions for 4Q26 and FY2027 estimates based on strong demand for High-End DRAM and QLC SSDs.
Investment Thesis and Target Price
DS Investment & Securities maintains a Buy rating and a Target Price of 530,000 KRW (~$397.30 USD based on 1334 KRW/USD). Despite a short-term price correction following the earnings release—attributed to a base effect from market rebounds and Google’s underperforming results—the analyst emphasizes that the fundamental industry recovery and visibility for 2027 growth remain robust. The valuation is expected to normalize as macro risks ease and the current undervaluation is corrected.
Earnings Estimates and Financial Preview
3Q26 Actual Results:
- Revenue: 195.3 trillion KRW (~$146.4B USD), +14% QoQ
- Operating Profit: 107.4 trillion KRW (~$80.5B USD), +20% QoQ (OPM 55%)
- Divisional Operating Profit:
- DS Division: 106.5 trillion KRW (~$79.8B USD) [DRAM: 81.8 trillion KRW (~$61.3B USD, OPM 83%), NAND Flash: 26.7 trillion KRW (~$20.0B USD, OPM 64%), LSI/Foundry: -1.98 trillion KRW (~$1.48B USD)]
- DX Division: -0.8 trillion KRW (~$600M USD)
- SDC: 1.1 trillion KRW (~$825M USD)
- Harman: 0.6 trillion KRW (~$450M USD)
- Memory Metrics: DRAM B/G +3%, ASP +20%; NAND Flash B/G +5%, ASP +18%.
Future Forecasts:
- 4Q26 Estimates (Revised Up): Revenue of 224.3 trillion KRW (~$168.2B USD, +15% QoQ) and Operating Profit of 132.8 trillion KRW (~$99.6B USD, +24% QoQ, OPM 59%). This is supported by DRAM guidance (mid-to-high 10% B/G) and NAND guidance (mid 10% B/G).
- FY2027 Estimate (Revised Up): Operating Profit raised from 612 trillion KRW to 632 trillion KRW (~$473.8B USD, +63% YoY, OPM 63%), despite a conservative FX assumption of 1,370 KRW/USD.
Key Semiconductor Drivers and Catalysts
1. HBM4 Dominance: Samsung has achieved the fastest generation transition in the industry, with HBM4 revenue share reaching 60% of total HBM sales in 3Q26. HBM supply for 2027 is already sold out at target price levels, with continuous requests for volume increases from major customers.
2. Foundry Recovery: Advanced nodes (below 8nm) are operating at full capacity. The analyst notes a significant increase in 2nm project wins (expected to double YoY) and expects HPC revenue to exceed 50% of the foundry mix by next year. New customer contracts for 2nm and demand for HBM4 base dies are key catalysts.
3. Market Demand: Strong demand is being driven by new GPU and CPU launches for DRAM, and large-scale orders for QLC SSDs. Long-term agreements (LTAs) are expanding beyond hyperscalers to include mobile, automotive, and network sectors, with a goal to fill 60-70% of capacity through 2030 via LTAs.
🔗 Original Source: View the official filing/article here.