J.P. Morgan maintained Samsung Electronics' “gain” rating, but lowered the target price from 480,000 won to 400,000 won to reflect the story of the downward memory cycle in the current market environment, and lowered the valuation target multiplier from 8 times to 6 times. The bank pointed out that management provided clear long-term information during the performance conference call, and was confident in the improvement of HBM and foundry execution capabilities, and was optimistic about the future. Management revealed that 60% to 70% of future memory production capacity has been locked in long-term contracts. The contract period is based on a five-year period, which can be extended by one year each year, and there is a minimum price guarantee to ensure adequate returns and incentives for investment. Management also said that long-term agreements have been signed with five major CSP customers, and five other major AI customer contracts are under negotiation. By the end of the second quarter, more than a quarter of the advance payment had been collected. The bank believes that Samsung's HBM4 and HBM4E samples are progressing smoothly. HBM4 sales are expected to increase by 3% in the second half of this year, accounting for 60% of HBM sales in 2026, and the market share of HBM in 2027 is expected to match the overall DRAM market share. In terms of foundry, AVGO recently received an order of about 200 billion US dollars, and 2nm orders continue to win, including Broadcom N/W chips, Samsung's own SoC, and Tesla AI chips. The bank expects significant improvements in the quality of the foundry package. Management expects eSD to account for more than 60% of sales this year, QLC bit shipments will double in the second half of the year compared to the first half of the year, and the V10 NAND was mass-produced in August. The bank believes that risk and return can become very attractive during the 12-month investment period, and investors are advised to accumulate shares when stock prices are weak.

J.P. Morgan maintained Samsung Electronics' “gain” rating, but lowered the target price from 480,000 won to 400,000 won to reflect the story of the downward memory cycle in the current market environment, and lowered the valuation target multiplier from 8 times to 6 times. The bank pointed out that management provided clear long-term information during the performance conference call, and was confident in the improvement of HBM and foundry execution capabilities, and was optimistic about the future. Management revealed that 60% to 70% of future memory production capacity has been locked in long-term contracts. The contract period is based on a five-year period, which can be extended by one year each year, and there is a minimum price guarantee to ensure adequate returns and incentives for investment. Management also said that long-term agreements have been signed with five major CSP customers, and five other major AI customer contracts are under negotiation. By the end of the second quarter, more than a quarter of the advance payment had been collected. The bank believes that Samsung's HBM4 and HBM4E samples are progressing smoothly. HBM4 sales are expected to increase by 3% in the second half of this year, accounting for 60% of HBM sales in 2026, and the market share of HBM in 2027 is expected to match the overall DRAM market share. In terms of foundry, AVGO recently received an order of about 200 billion US dollars, and 2nm orders continue to win, including Broadcom N/W chips, Samsung's own SoC, and Tesla AI chips. The bank expects significant improvements in the quality of the foundry package. Management expects eSD to account for more than 60% of sales this year, QLC bit shipments will double in the second half of the year compared to the first half of the year, and the V10 NAND was mass-produced in August. The bank believes that risk and return can become very attractive during the 12-month investment period, and investors are advised to accumulate shares when stock prices are weak.