SK Hynix down 7%, Samsung at a 1-year low.
Morgan Stanley slashed target prices:
SK Hynix: -54% (₩260,000 → ₩120,000)
Samsung Electronics: -27% (₩105,000 → ₩76,000)
Reasons:
DRAM cycle peak in Q4 2024.
HBM price declines due to oversupply.
Chinese firms ramping up investment.
Opinion
This drastic downgrade signals a fundamental reassessment of the memory market. A 54% cut for SK Hynix suggests that HBM, previously seen as a growth driver, may now face structural risks.
The rise of Chinese chipmakers isn’t just about oversupply—it’s about shrinking the technology gap. If China narrows its lead in DRAM/HBM, Korean dominance could erode faster than expected.
Core Sell Point
The combination of Chinese competition and potential HBM oversupply suggests Korean memory leaders may lose their competitive edge faster than anticipated. The structural risks are mounting, making the recent sell-off more than just a short-term correction.
Shares of SK Hynix and Samsung Electronics plunged in early trading on September 19, following a sharp target price cut by Morgan Stanley. The report, released during the Korean Chuseok holiday, significantly lowered its valuation for both chipmakers, triggering investor concerns.
Market Reaction
As of 9:25 AM KST:
SK Hynix fell 7.00% (-₩11,400) to ₩151,400.
Samsung Electronics dropped 1.71% (-₩1,100) to ₩63,300, hitting an intraday low of ₩62,700—its lowest in a year.
Morgan Stanley's Downgrade: "Winter Looms"
New Target Prices:
SK Hynix:₩260,000 → ₩120,000 (-54%)
Samsung Electronics:₩105,000 → ₩76,000 (-27%)
Key Reasons for Downgrade:
DRAM Cycle Peaking in Q4 → Downturn expected through 2026.
HBM Oversupply Risk → Rising production may push prices down.
Chinese Chipmakers Expanding Aggressively → Increased competition may erode Korean firms’ dominance.
Morgan Stanley's pessimistic outlook follows its August warning—"Prepare for the semiconductor cycle peak"—which questioned whether the industry could sustain its 2025 growth expectations.
The "Winter Looms" title echoes its 2021 report, "Memory Winter is Coming," which accurately predicted the last downturn. This historical accuracy may explain the market's strong reaction.
[Compliance Note]
All posts by Sellsmart are for informational purposes only. Final investment decisions should be made with careful judgment and at the investor’s own risk.
The content of this post may be inaccurate, and any profits or losses resulting from trades are solely the responsibility of the investor.
Core16 may hold positions in the stocks mentioned in this post and may buy or sell them at any time.
