Meritz Securities: Do Not Sell Samsung and SK Hynix, Market Misjudgment Exists

Kim Sunwoo, a researcher at South Korea's Meritz Securities, stated that the market misunderstands the fundamentals of Samsung Electronics and SK Hynix, and that a pessimistic judgment on the semiconductor sector should not be made at this time. Regarding rumors that SK Hynix is lowering prices to secure orders when signing long-term supply agreements with major tech companies, Kim Sunwoo pointed out that this is not merely a price sacrifice but a strategic investment to lock in demand for generative AI and AI data centers. It is expected that the DRAM demand fulfillment rate will be between 75% and 80% in the second half of this year, potentially dropping to the 60% range next year; even when calculating the actual end-user demand, the fulfillment rate is only about 70%, which will deepen the supply shortage. He believes that Samsung Electronics' share buybacks, cancellations, and dividends, along with the potential special dividends from SK Hynix, will alleviate market concerns, and that both companies are currently in a phase of severe undervaluation and excessive adjustment.

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