Goldman Sachs: Memory Sector Fears Overstated, Fundamentals Remain Strong
Amid growing market skepticism about the future of the memory chip industry, Goldman Sachs has released a counter-narrative. In its latest report, the investment bank asserts that current concerns are exaggerated. It maintains that underlying supply-demand dynamics continue to support elevated memory chip prices. Accordingly, Goldman Sachs has reaffirmed its 'Buy' ratings on both Samsung Electronics and SK Hynix, with price targets of KRW 490,000 and KRW 3.5 million, respectively.
AI-Driven HBM Demand Fuels Optimistic Price Forecast
The core of Goldman's bullish thesis centers on the structural demand shift driven by artificial intelligence. The report highlights that demand for High Bandwidth Memory (HBM), essential for AI servers, is consistently outpacing industry supply.
Goldman Sachs projects a significant price surge. By 2027, the blended average selling price for HBM from Samsung and SK Hynix is forecast to rise approximately 87% and 100% year-over-year, both approaching $2.9 per Gb. This outlook is roughly 24% above current market consensus.
Widening Supply Gap and Rising Revenue Contribution
This optimistic pricing forecast is grounded in a tightening supply-demand balance. The analysis suggests that challenges in achieving high yields for the latest-generation HBM products will lead to a more severe supply shortage in 2027 compared to this year.
This robust demand will fundamentally alter the revenue mix for both companies. Goldman estimates HBM's contribution to total DRAM revenue will jump from about 8% and 14% in 2024 to 16% and 22% in 2027 for Samsung and SK Hynix, respectively, potentially reaching 18% and 25% by 2028. HBM is rapidly transitioning from a niche product to a core earnings driver.
Favorable Contracts and Lean Inventories Add Resilience
Beyond demand-side strength, the report points to positive shifts in the industry's ecosystem. Terms of long-term supply agreements are becoming increasingly favorable for memory suppliers.
Samsung Electronics, for instance, has already signed deals with the world's top five data center customers and is in final negotiations with five other major clients. These multi-year contracts are expected to account for 60% to 70% of its planned HBM capacity, providing high revenue visibility and stability.
Furthermore, industry inventory levels remain lean. Goldman estimates that both Samsung's and SK Hynix's DRAM and NAND inventories stood at 2-4 weeks at the end of Q2, below the normal range of 4-5 weeks. This healthy inventory position indicates no imminent oversupply pressure, offering another layer of support for pricing.