Morgan Stanley Slashes Samsung, SK Hynix Price Targets

Morgan Stanley has cut its price targets for South Korea’s two biggest memory chipmakers, lowering its SK hynix target by 38% and its Samsung Electronics target by 19%, Seoul Economic Daily reported on Tuesday. The move came on the same day both stocks led a sharp rebound on the Seoul market.

Morgan Stanley

According to the report, analyst Shawn Kim reduced the SK hynix target to 1.6 million won from 2.6 million won, and the Samsung Electronics target to 309,000 won from 381,000 won. The target for Samsung’s preferred shares was lowered to 247,200 won from 304,800 won. The bank kept overweight ratings on both companies and switched its top semiconductor pick to Samsung Electronics from Samsung Electro-Mechanics.

Supply concerns for 2028

MoneyToday, which also reported the cuts, said Morgan Stanley viewed short-term memory fundamentals as solid but flagged rising supply in 2028 as new production capacity comes online. The bank lowered its long-term profit margin and valuation multiple assumptions as a result.

Seoul Economic Daily said the bank cut its average operating margin assumption for SK hynix over 2029 to 2035 to 28% from 53%. It also trimmed expected high-bandwidth memory (HBM) margins for 2027 and 2028 to about 70% for SK hynix and 65% to 72% for Samsung. Other risks cited included Chinese capacity expansion, HBM competition and delays to data centre construction after the US midterm elections, with about 5 gigawatts of projects scheduled for 2028 expected to slip to 2029.

At the same time, Morgan Stanley raised its 2027 operating profit forecasts by 9% for Samsung and 13% for SK hynix, the report said.

Kospi rebounds on chip rally

The cuts did not stop a broad rally in Seoul. The Korea Times reported that the Kospi closed 4.39% higher at 5,239.13 on Tuesday, while the Kosdaq gained 4.48% to 667.61. SK hynix rose 6.69% to 1,212,000 won and Samsung Electronics climbed 4.74% to 198,900 won.

Foreign investors were net buyers for the first time in eight sessions, purchasing a net 353.2 billion won of shares, while retail investors sold a net 1.34 trillion won, according to the newspaper. It linked the gains to easing Middle East tensions and a 6.9% overnight jump in the Philadelphia Semiconductor Index. The won strengthened 9.6 won to close at 1,337.5 per dollar.

Han Ji-young, an analyst at Kiwoom Securities, told the Korea Times that worries about the AI industry and chip earnings had “already been largely priced into stocks.”

What’s next

Views on the sector remain split. MoneyToday reported that Goldman Sachs said semiconductor stocks had entered an oversold zone, noting there may be few catalysts for gains by year-end but that selective investment appeal had increased. Goldman forecast AI infrastructure investment rising from about US$1.3 trillion next year to about US$2 trillion by 2028.

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