Q3 memory price increases exceed expectations; HBM profitability to match that of general-purpose DRAM next year; Nomura repeatedly raises target prices for SK Hynix and Samsung

The memory chip industry is entering a new phase marked by accelerating price hikes and significantly expanding profitability—Nomura Securities’ latest research report shows that Q3 price increases will far surpass prior expectations, and the profitability gap between HBM and general-purpose DRAM will gradually close by around 2027. According to Zhui Feng Trading Desk, on June 24, Nomura Securities released its global memory industry research report, raising SK Hynix’s target price from 4 million KRW to 4.7 million KRW—a 18% increase—and maintaining Samsung Electronics’ target price at 670,000 KRW (having previously raised it from 590,000 KRW on June 22). As of the report’s publication date, Samsung Electronics’ share price stood at 340,500 KRW, implying an upside potential of 96.8%; SK Hynix’s share price was 2.58 million KRW, implying an upside potential of 82.2%. The two core drivers behind these target-price upgrades are: first, Q3 memory price increases have substantially exceeded earlier expectations; second, Nomura has simultaneously raised its 2027 earnings forecasts and adopted a more moderate assumption regarding the Korean won’s appreciation.

Nomura: Samsung and SK Hynix can still double in value!

In fact, even industry insiders find it difficult to predict, two or three years from now, just how deeply we’ll rely on AI, how massive token consumption will become, and how much genuine headroom exists for memory demand. Thus, it’s understandable that research conclusions vary widely. Nomura’s core thesis is that the market has severely underestimated the exponential growth of demand. AI inference, RAG retrieval, and the explosive proliferation of agent-based applications—combined with surging user numbers, longer interaction durations, and increasing task complexity—will drive memory demand to surge thousands-fold within five years. From simple question-answering to generating one-hour videos, token consumption jumps directly from dozens to the hundred-million level—making HBM and DRAM not merely important, but absolutely indispensable. On the supply side, however, global memory capacity can grow by only 5–6× over five years (a compound annual growth rate of 30%). Even if the entire industry pours money into capacity expansion, it still cannot fill the enormous ‘demand gap’ carved out by AI. Software optimization and cache compression may only delay the shortfall—they cannot fundamentally resolve the supply-demand imbalance. Long-term agreements (LTAs) lock in high profitability Historically, memory stocks were cyclical: prices rose and fell, and profits swung wildly. Now, things have changed: 3–5-year long-term agreements (LTAs) have effectively transformed the cycle into a sustained bull run. Nomura notes that LTAs signed between leading cloud providers, AI enterprises, and Samsung and SK Hynix include minimum purchase volumes over 3–5 years, advance payments, and capital expenditure support—with extremely high penalties for breach of contract. Moreover, high-end memory supplies—especially HBM—are inherently scarce, fueling intense customer competition for allocation; buyers are highly willing to accept premium pricing and long-term contractual terms.

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