Goldman Sachs Raises Samsung to ₩260,000, SK Hynix to ₩1.35 Million: "The Strongest Memory Cycle in History"

On March 12, 2026, Goldman Sachs issued a landmark dual upgrade for South Korea's two semiconductor giants, raising its price target on Samsung Electronics from ₩205,000 to ₩260,000—a 27% increase—and lifting SK Hynix from ₩1.2 million to ₩1.35 million, a 12.5% jump. Both stocks retain Buy ratings. The investment bank's central thesis is striking in its conviction: despite a historic rally in memory chip prices and surging earnings, both companies remain "significantly undervalued."

The upgrades arrive at a pivotal moment. AI infrastructure spending, projected to reach $655 billion globally in 2026, has triggered what Goldman describes as a structural paradigm shift in memory semiconductors. As AI technology expands into Vision-Language-Action (VLA) models integrating vision, language, and behavior, the demand for data processing and storage is growing at an unprecedented pace—and Samsung and SK Hynix sit at the epicenter of this transformation.

Market Context: Fundamentals at Record Levels Despite KOSPI Turbulence

The Korean stock market experienced a dramatic shock in early March when the KOSPI plummeted more than 12% in a single session—its largest decline on record—as geopolitical tensions surrounding the Iran conflict triggered a global risk-off wave. Samsung Electronics shares, which had touched an all-time high of ₩223,000 on February 27, retreated to approximately ₩184,000 by March 12. SK Hynix similarly pulled back to around ₩930,000 from its 52-week high of ₩1,099,000.

Goldman Sachs views this correction as a buying opportunity, and the fundamental data supports that assessment. According to TrendForce, Q1 2026 conventional DRAM contract prices surged 90–95% quarter-over-quarter, shattering the earlier forecast of 55–60% and setting a new record for quarterly price increases. Server DRAM prices rose approximately 90% QoQ, PC DRAM exceeded 100%, and mobile DRAM (LPDDR5X) climbed roughly 90%—all categories posting their steepest historical gains simultaneously.

The supply picture is equally compelling. SK Hynix has reported that its entire HBM, DRAM, and NAND production capacity is sold out through 2026. Memory makers are prioritizing server and AI applications, with the reallocation of NAND production capacity toward more profitable DRAM manufacturing further tightening supply across the board. The structural nature of this supply shortage—driven by the massive capital requirements of transitioning to advanced nodes and HBM production—distinguishes this cycle from previous memory booms that were primarily demand-driven.

Samsung Electronics: ROE at 37%, the Return of the Memory King

Goldman Sachs substantially raised its earnings forecasts for Samsung Electronics, projecting the company's return on equity to reach approximately 37%—a historical high. Multiple brokerages have converged on a full-year 2026 operating profit forecast in the range of ₩90–100 trillion ($62–69 billion), representing more than a doubling from the previous year. Some analysts, as reported by WCCFTech, project operating profit as high as $73 billion (approximately ₩106 trillion).

The semiconductor division is the overwhelming driver. KB Securities projects that Samsung's chip business will account for 55% of total revenue and a remarkable 90% of operating profit in 2026. Samsung's HBM revenue is forecast to triple year-over-year to ₩26 trillion, fueled by its expected entry into the HBM4 supply chain for major technology companies including NVIDIA and Google.

Samsung is executing an aggressive capacity expansion, targeting 250,000 wafers per month of HBM production by year-end—a 47% increase from the current 170,000 wafers. The company commenced HBM4 mass production in February 2026 alongside SK Hynix, and has delivered paid final samples to NVIDIA as it moves through the qualification process. Beyond semiconductors, Samsung announced the cancellation of ₩11.6 trillion ($8 billion) in treasury stock during the first half of 2026, signaling a significant shift toward shareholder returns that further strengthens the investment case.

SK Hynix: An 80% ROE at 4.5x Earnings—A Valuation Anomaly

Goldman Sachs's analysis of SK Hynix borders on extraordinary. The firm projects the company's ROE will exceed 80%—a figure virtually unprecedented in the global semiconductor industry. DRAM operating margins are expected to reach the high-70% range, with NAND margins in the high-40% territory.

Yet at current prices, SK Hynix trades at just 4.5x earnings and 1.7x book value. Goldman's ₩1.35 million target implies approximately 45% upside from the current ₩930,000 share price, while the consensus average of ₩1.22 million from 35 analysts—all of whom rate the stock a Buy—suggests roughly 31% upside. Even the most conservative analyst target sits well above the current trading level.

SK Hynix maintains a commanding approximately 62% share of the global HBM market. UBS projects the company will capture roughly 70% of the HBM4 market for NVIDIA's next-generation Rubin platform. Bank of America estimates the total HBM market will reach $54.6 billion in 2026, a 58% increase from the prior year, with Goldman Sachs forecasting that HBM demand for custom ASIC-based AI chips will surge 82%, accounting for one-third of the market.

The company began HBM4 mass production in February 2026, with its new M15X fab's first clean room scheduled for completion in May. All 2026 HBM supply negotiations with key customers are already finalized, providing exceptional earnings visibility. SK Hynix's market capitalization has reached $434 billion, making it the world's 25th most valuable company—a remarkable ascent for a firm that traded below ₩163,000 just twelve months ago.

The HBM4 Transition: A Two-Horse Race with Global Implications

The competitive dynamics of the HBM market are evolving rapidly. Both Samsung and SK Hynix simultaneously initiated HBM4 mass production in February 2026, with both companies delivering paid final samples to NVIDIA as they compete for supply contracts on the Rubin platform, which will use HBM4 exclusively and is scheduled for volume availability in the second half of 2026.

TrendForce projects that HBM3E will still account for roughly two-thirds of total HBM shipments in 2026, with HBM4 gaining traction progressively. The transition to 16-Hi HBM4 stacks represents a significant technical challenge, with Samsung, SK Hynix, and Micron all competing for NVIDIA's next-generation contracts. KB Securities forecasts that Samsung and SK Hynix together will supply over 90% of the HBMs used in North American big tech companies' custom ASICs, underscoring the duopoly's strategic importance.

Goldman Sachs particularly highlighted the ASIC opportunity, forecasting that HBM demand for custom AI accelerators will skyrocket 82%. As Google's TPUs, Amazon's Trainium chips, and Microsoft's Maia processors all require high-bandwidth memory, the addressable market extends well beyond NVIDIA GPUs—a structural tailwind that many investors may be underestimating.

Investment Implications: Balancing Historic Opportunity Against Real Risks

The bull case is formidable. DRAM supply shortages are expected to persist through at least the second half of 2026. Macquarie Equity Research argues that this memory upcycle, unlike previous cycles that lasted 4–6 quarters, is underpinned by structural AI demand that could sustain elevated pricing beyond 2026. Korean semiconductor valuations remain at 30% discounts to global peers despite superior earnings growth—Macquarie projects 48% earnings growth for Korean equities in 2026. KB Securities forecasts a combined operating profit of ₩178 trillion for Samsung and SK Hynix, up 109% year-over-year.

The bear case deserves serious consideration. Morningstar analysts note that the current price supercycle has persisted for eight consecutive quarters, and they expect memory prices to decline after 2027 as the AI supercycle is "not perpetual." The March KOSPI crash demonstrated that even the strongest fundamental trends can be overwhelmed by macro shocks. Additionally, US-China technology tensions continue to pose regulatory risks for Korean chipmakers, and any unexpected slowdown in AI infrastructure spending could trigger a sharp correction in memory-heavy portfolios.

Outlook: Catalysts, Scenarios, and What to Watch

Near-term catalysts include Samsung and SK Hynix's Q1 2026 earnings releases in April, the ramp-up of HBM4 mass production, NVIDIA's Rubin platform launch in the second half, and Q2 DRAM contract price negotiations. Goldman Sachs noted that Q2 supply negotiations are starting at higher price levels than anticipated, which was a core driver of the target upgrades.

In the bullish scenario, DRAM shortages intensify through year-end, HBM4 adoption accelerates beyond expectations, and Samsung approaches KB Securities' ₩320,000 target while SK Hynix moves toward the high-end analyst estimate of ₩1.7 million. In a more conservative scenario, geopolitical risk re-escalation or emerging concerns about AI investment sustainability could result in range-bound trading or further pullback from current levels.

Goldman Sachs also raised its KOSPI target to 7,000, explicitly stating that "now is not the time to reduce exposure to Samsung Electronics or SK Hynix." The firm's view is that the market has not yet fully priced in the magnitude of the earnings revision cycle that is underway.

Key Takeaways

Goldman Sachs's simultaneous target upgrades for Samsung and SK Hynix underscore a market reality that continues to exceed expectations: the AI memory supercycle is intensifying, not peaking. With Samsung projecting a 37% ROE and SK Hynix an extraordinary 80%-plus ROE, record DRAM price increases across all categories, HBM4 mass production now underway, and valuations that remain compressed relative to earnings power, the fundamental case for Korean semiconductor exposure is as strong as it has ever been. However, the March market crash serves as a stark reminder that macro and geopolitical risks can overwhelm even the most compelling bottom-up stories. Investors should carefully assess their risk tolerance and portfolio positioning as they navigate what may prove to be the most consequential period in memory semiconductor history.