Samsung Electronics received a maintained buy rating and 600,000 won target price from KB Securities on July 23 as the biggest Google AI beneficiary. Samsung currently supplies 50% of Google's server memory demand and 80% of its HBM (High Bandwidth Memory) as of Q3 this year, holding the #1 position in Google's memory supply share. KB Securities Research Head Kim Dong-won attributed the rating to Samsung's dominant supply position amid Google's accelerating AI infrastructure investments, which are expected to represent over 25% of total US Big Tech AI spending this year. The assessment comes as Google develops its next-generation server chip 'Frozen v2' optimized for the Gemini model, driving sustained demand for Samsung's advanced memory products through 2028.
KB Securities Maintains Buy Rating and 600,000 Won Target Price
KB Securities maintained its 'buy' investment opinion and 600,000 won target price for Samsung Electronics on July 23. Research Head Kim Dong-won stated in a report that Samsung Electronics records the #1 memory supply share to Google and is evaluated as the biggest beneficiary of Google's AI ecosystem. The firm based its assessment on Samsung's current supply position of 50% of Google's server memory demand and 80% of HBM as of Q3 this year.
Samsung Holds 50% Google Server Memory Share and 80% HBM Supply
Samsung Electronics supplies 50% of Google's server memory demand and 80% of its HBM as of Q3 this year, according to KB Securities estimates. Kim Dong-won stated that Samsung Electronics holds the #1 position in Google's memory supply share. The firm identified Samsung as the biggest beneficiary of Google's AI ecosystem based on this dominant supply position.
Google Develops Frozen v2 Chip with 25% Share of Big Tech AI Investment
KB Securities forecast that AI investments by Google and other US Big Tech companies will continue for several years. Kim Dong-won explained that US Big Tech companies including Google have the perception that 'under-investment in AI is more dangerous than over-investment' and will preempt AI infrastructure by guaranteeing rental fees to external datacenter operators through next year. The firm noted Google's recent announcement of plans to develop next-generation server chip 'Frozen v2' optimized for the Gemini model to hardware. Kim stated that Google is expected to expand the procurement proportion of its own chips along with TPU while developing Frozen v2 in parallel, and that Google's AI investment scale this year will account for more than one-quarter of total US Big Tech AI investment.
Memory Supply Shortage Forecast to Intensify Through 2028
KB Securities expects memory supply shortage to intensify through 2028. Kim Dong-won stated that Samsung Electronics faces inevitable long-term structural constraints on general DRAM production capacity due to expansion of HBM4 production with 1c DRAM next year and HBM4E mass production in the first half of 2028. He analyzed that memory prices in Q3 will rise at least 30% or more amid expanding long-term supply agreement (LTA) proportion from the second half of this year, and that most new production capacity will be concentrated on HBM as the HBM proportion of DRAM wafer production capacity expands from 15% in 2026 to 34% in 2027.
Samsung Q3 Revenue and Operating Profit Expected to Surge 143% and 805%
KB Securities forecast continued improvement in Samsung Electronics' earnings. Kim Dong-won projected that Q3 revenue and operating profit will increase 143% and 805% respectively year-over-year, with earnings surprises expected for three consecutive quarters, and that second-half operating profit will also increase more than 7 times year-over-year. He evaluated that the impact of consumer IT demand fluctuations from smartphones and PCs will be limited unlike the past as the AI datacenter revenue proportion of the memory business rises to 70% following expansion of long-term supply contracts with Big Tech companies.
FAQ
What rating did KB Securities give Samsung Electronics on July 23?
KB Securities maintained a 'buy' investment opinion and 600,000 won target price for Samsung Electronics on July 23, identifying the company as the biggest beneficiary of Google's AI ecosystem expansion.
What is Samsung's current memory supply share to Google?
Samsung Electronics supplies 50% of Google's server memory demand and 80% of its HBM (High Bandwidth Memory) as of Q3 this year, holding the #1 position in Google's memory supply share according to KB Securities estimates.
What are Samsung's Q3 earnings projections?
KB Securities projects Samsung's Q3 revenue and operating profit will increase 143% and 805% respectively year-over-year, with second-half operating profit forecast to increase more than 7 times year-over-year.
