{"content_id":"nwnt1omoez","slug":"samsung-sk-hynix-ai-memory-stock-fact-check","locale":"en","schema_type":"Report","category":"report","category_name":"Report","title":"Foreign Investors Sell 7 Trillion Won Worth of Samsung Electronics and SK Hynix Shares; Fact-Check on AI Memory Earnings","summary":"While foreign investors’ net selling of around 7 trillion won cannot be viewed solely as a negative factor, it is also not a signal that unconditionally justifies buying by retail investors. We will outline investment criteria by distinguishing between the official earnings reports of Samsung Electronics and SK Hynix, memory prices, demand for AI infrastructure, and cyclical risks.","author":{"name":"Injoys Editorial Team","url":"https://injoys.com/ko/about"},"key_points":["On May 7, 2026, foreign investors recorded net sales of around 7 trillion won on the KOSPI, but the index closed higher thanks to buying by retail and institutional investors.","Following an operating profit of 57.23 trillion won in the first quarter of 2026, Samsung Electronics has provided guidance of approximately 89.4 trillion won in operating profit for the second quarter.","SK Hynix's official operating profit margin for the first quarter of 2026 was 72%, which is an exceptionally high level of profitability by manufacturing industry standards.","The forecast of annual operating profit in the 300 trillion won range should be distinguished as estimates by securities firms and consensus projections, rather than official figures.","The semiconductor cycle may not have disappeared but could have actually lengthened and strengthened due to demand for AI servers and HBM, with a slowdown in price growth being the key risk."],"content_markdown":"Based on publicly available data as of July 9, 2026, this article examines and verifies the arguments regarding Samsung Electronics and SK Hynix—specifically, claims of market overheating, undervaluation, and an AI memory supercycle—separately. The conclusion is not straightforward. While large-scale net selling by foreign investors is a clear warning sign, the official earnings reports and memory price trends of both companies simultaneously indicate profit leverage that is far stronger than in past semiconductor cycles.\n\nHowever, conclusions such as “sell immediately” or “buy unconditionally” are not appropriate for a data-driven analysis. Investment decisions must take into account official earnings, consensus estimates, memory prices, the sustainability of clients’ AI investments, the pace of supply growth, and valuation.\n\n## Key Conclusions\n\n- Foreign investors’ net selling of approximately 7 trillion won worth of KOSPI stocks is more likely to be interpreted as profit-taking and portfolio rebalancing focused on large-cap semiconductor stocks—which had surged sharply at the time—rather than a general withdrawal from the Korean stock market.\n- Samsung Electronics has provided guidance for Q2 operating profit of approximately 89.4 trillion won, following Q1 2026 operating profit of 57.23 trillion won. Even a simple sum of the first half figures alone amounts to approximately 146.6 trillion won.\n- SK Hynix reported first-quarter 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won, and an operating profit margin of 72%. While this level of profitability is rare in the manufacturing sector, figures around 75% still require a distinction between official confirmed figures and estimates.\n- Demand for AI servers, HBM, server DRAM, and eSSDs is driving memory prices sharply higher. However, if the rate of price increases slows or supply expansion outpaces demand, stock prices could correct before earnings results are released.\n- The key to deciding whether to sell or hold is not so much “whether the stock price has risen significantly,” but rather “whether the pace of upward revisions to earnings forecasts is being maintained” and “whether visibility on memory prices and orders is deteriorating.”\n\n## Claims in the Original Text and Verifiable Data\n\n| Issue | Verifiable Facts | Interpretation |\n|---|---:|---|\n| Foreign investors’ sales in the 7 trillion won range | As of the May 7, 2026, report, foreign investors were net sellers of approximately 7.15 trillion to 7.17 trillion won on the KOSPI, while retail investors were net buyers of approximately 5.99 trillion won. The KOSPI closed at 7,490.05, up 1.43%. | Large-scale selling does not always lead to a sharp drop in the index. At that time, buying by retail and institutional investors, along with expectations for semiconductor earnings, absorbed the selling pressure. |\n| Stocks Targeted by Selling | Foreign investors’ net sales of Samsung Electronics and SK Hynix totaled approximately 5.27 trillion won, accounting for about 74% of the total foreign net sales on the KOSPI. | This can be viewed as a reduction in exposure to the stocks that had led the recent rally, rather than a general flight from the Korean market. |\n| Samsung Electronics: “Annual Operating Profit in the 300 Trillion Won Range” | This is not an officially confirmed figure. However, based solely on the first-quarter 2026 operating profit of 57.23 trillion won and the second-quarter guidance of 89.4 trillion won, the first half of the year would total approximately 146.6 trillion won. | The forecast of annual operating profit in the 300 trillion won range falls within the realm of estimates by some securities firms and the consensus. A distinction must be made between guidance and forecasts. |\n| SK Hynix: “Operating Profit Margin of 75%” | The operating profit margin for the most recent officially confirmed quarter—Q1 2026—was 72%. | A forecast in the mid-70% range is possible, but it remains an estimate until official earnings are announced. |\n| Soaring Memory Prices | TrendForce forecasts that in Q2 2026, contract prices for standard DRAM will rise by 58–63%, and NAND flash prices will rise by 70–75%. For the third quarter, it forecast a slowdown in the rate of increase, with DRAM prices rising 13–18% and NAND prices 10–15%. | While prices will continue to rise, stock prices become more sensitive when the rate of increase slows. |\n| The 40-Month Semiconductor Cycle | While investment in AI infrastructure may extend the cycle, it is difficult to conclude that the supply and price cycle of the memory industry itself has disappeared. | It is more accurate to say that “the demand base and duration of the cycle have changed” rather than “the cycle has been broken.” |\n\n## Why Did Retail Investors Snap Up Foreign Selling?\n\nAttributing all retail buying solely to FOMO (fear of missing out) may underestimate the phenomenon. Three factors converged behind retail investors’ purchases of major semiconductor stocks at the time.\n\nFirst, earnings forecasts were sharply revised upward. Samsung Electronics’ guidance for the second quarter of 2026 significantly exceeds its full-year 2025 operating profit of 43.6 trillion won—by more than a full year’s worth in just one quarter. SK Hynix also posted an operating profit of 37.6 trillion won in the first quarter of 2026—equivalent to about 80% of its full-year 2025 operating profit of 47.2 trillion won—in a single quarter.\n\nSecond, foreign selling does not necessarily indicate a deterioration in fundamentals. Such selling may be a mix of portfolio rebalancing to reduce exposure to surging blue-chip stocks, short-term profit-taking, and sales for currency exchange rate and risk management purposes.\n\nThird, Korean retail investors can intuitively grasp the profit sensitivity of Samsung Electronics and SK Hynix. This is because the business structure is such that when semiconductor prices rise, not only revenue but also profit margins increase. However, if this intuition becomes excessive, it can lead to chase buying that ignores price and risk.\n\n## The Structure of the AI Memory Boom\n\n### What Is HBM?\n\nHBM stands for High Bandwidth Memory. It is a type of high-bandwidth memory created by vertically stacking multiple DRAM chips to enable AI accelerators and GPUs to rapidly exchange large volumes of data. Since memory bandwidth and power efficiency—not just computational performance—become bottlenecks in the training and inference of large-scale AI models, the strategic value of HBM has increased.\n\n### Why Have DRAM and NAND Prices Risen as Well?\n\nHBM production requires significant amounts of high-end DRAM wafers, packaging, and testing resources. When memory manufacturers prioritize production capacity for HBM and server-grade products, the supply of standard DRAM decreases. At the same time, AI servers require a large number of high-performance SSDs to store model parameters, vector databases, logs, caches, and checkpoints. This creates a ripple effect where HBM demand drives up prices for server DRAM, eSSDs, and even NAND.\n\n### Why Operating Profit Margins Are Abnormally High\n\nThe memory semiconductor industry is characterized by a high proportion of fixed costs. Since factory and equipment costs have already been incurred, when selling prices rise, a significant portion of the additional revenue flows directly into operating profit. During periods of supply shortages, customers prioritize securing volume over price, leading to simultaneous improvements in both product mix and pricing. This is the key factor behind exceptional figures such as SK Hynix’s 72% operating profit margin in the first quarter of 2026.\n\n## The Difference Between Samsung Electronics and SK Hynix\n\n| Category | Samsung Electronics | SK Hynix |\n|---|---|---|\n| Business Structure | Diversified structure including memory, System LSI, foundry, smartphones, displays, and home appliances | Pure-play semiconductor business focused on memory, with high sensitivity |\n| Latest Confirmed Major Financial Results | Guidance for Q2 2026: Revenue of approximately 171 trillion won, operating profit of approximately 89.4 trillion won | Q1 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won |\n| Strengths | Simultaneously benefits from a recovery in the memory market and options in the foundry and finished product businesses | Booming demand for HBM, server DRAM, and eSSDs directly drives profits |\n| Key Risks | Cost pressures in the set business; fluctuations in foundry yield and order intake; sustainability of HBM competitiveness | High profit sensitivity to falling memory prices; high concentration of customers and products |\n| Key Metrics for Investors | DS division profit margin, HBM shipments and customer certifications, improvement in foundry profitability | HBM volume and prices, server DRAM prices, eSSD profitability, pace of capital expenditures |\n\n## Why You Shouldn’t Blindly Believe That “A P/E Ratio of 5–6 Is Cheap”\n\nSemiconductor stocks have traditionally tended to have lower P/E ratios as earnings approach their peak. While a low P/E ratio may appear attractive when earnings grow significantly and earnings per share (EPS) surge, this is because the market is already pricing in the next downturn cycle to justify the low valuation.\n\nTherefore, a low P/E ratio does not always indicate undervaluation. The key questions are as follows:\n\n1. Are earnings forecasts for the next 4–8 quarters continuing to be revised upward?\n2. Will the long-term contract prices for HBM and server DRAM hold steady?\n3. Are customers’ AI infrastructure investment plans holding steady?\n4. Is there a possibility that new capital expenditures could create an oversupply in 2027–2028?\n5. Has the stock price risen too far ahead of the earnings growth rate?\n\nThe P/E ratio is merely a starting point. In the memory industry, the direction and pace of earnings growth are often more important than the absolute size of profits.\n\n## Signals to Consider Selling or Reducing Exposure\n\nThis list is not investment advice but a checklist for assessing risk.\n\n- The growth rate of DRAM and NAND contract prices slows, and securities firms stop raising their earnings estimates.\n- HBM supply contract terms shorten, or pressure to renegotiate prices increases.\n- AI capital expenditure guidance from NVIDIA, cloud service providers, and Big Tech companies is revised downward.\n- Customer inventory days increase, and orders shift from a “stockpiling” mode to a “de-stocking” mode.\n- Capital expenditures by major companies such as Samsung Electronics, SK Hynix, and Micron surge simultaneously, raising concerns about a supply glut in 2027–2028.\n- Stock prices have surged sharply in the short term, but earnings estimates have not kept pace, making both forward P/E and P/B ratios a cause for concern.\n- Variables affecting South Korean semiconductor production costs—such as a strong won, export restrictions, geopolitical risks, and electricity, water, and labor costs—are deteriorating.\n\n## Signals That Could Justify Holding or Increased Interest\n\nConversely, if the following signals continue to emerge, it would be difficult to conclude that fundamentals have been compromised, even if a short-term correction occurs.\n\n- Quarterly earnings consistently exceed consensus estimates.\n- Rising memory prices spread beyond HBM to server DRAM, LPDDR, and eSSD.\n- Long-term supply contracts with major customers, advance payments, and take-or-pay agreements increase.\n- Even as capital expenditures rise, the actual start of operations is delayed, prolonging the supply shortage.\n- Shareholder returns, dividends, and share buyback policies link the surge in profits to shareholder value.\n- Orders from major customers for Samsung Electronics’ foundry business are confirmed not just by media reports but through official contracts and revenue.\n\n## Points to Consider When Expanding Your Focus to Foundries and Equipment Stocks\n\nBottlenecks in TSMC’s advanced processes and packaging could present opportunities for Samsung Electronics’ foundry business and domestic semiconductor equipment, materials, and component companies. However, the mere fact that “TSMC is busy” does not mean that all domestic foundry-related stocks will benefit.\n\nEquipment and materials stocks are more volatile than large-cap stocks. The following points should be verified.\n\n| Checkpoint | Why It’s Important |\n|---|---|\n| Actual Revenue Exposure | Verify whether increased investment by Samsung Electronics and SK Hynix translates into revenue for the company in question. |\n| Process Stage | The closer a company is to bottleneck areas—such as HBM, advanced packaging, EUV, inspection and metrology, and eSSD—the greater its potential to benefit. |\n| Order Backlog | This indicates whether there are actual orders, rather than just a market trend. |\n| Operating Profit Margin | Even if revenue increases, profits can be diluted if costs—such as production costs, labor costs, and component procurement costs—rise. |\n| Customer Concentration | If a single customer’s investment schedule is delayed, earnings volatility increases. |\n| Valuation | These stocks may rise faster than blue-chip stocks, but they can fall even more sharply if expectations are dashed. |\n\n## Key Distinctions to Make When Interpreting Data\n\n### Official Earnings, Guidance, and Consensus Are Different\n\nOfficial earnings are past figures announced by the company. Guidance is a preliminary forecast provided by the company. Consensus is the average or range of forecasts from securities firms. The statement, “Samsung Electronics may generate operating profit in the 300 trillion won range this year,” is a forecast, not an officially confirmed result.\n\n### Operating Profit and Net Income Are Different\n\nOperating profit is the profit generated from core business operations. Net income is the final profit after accounting for financial gains and losses, taxes, equity method adjustments, and one-time gains and losses. When comparing global companies, mixing operating profit and net income in your analysis can distort the conclusions.\n\n### Quarterly and Annual Earnings Should Not Be Directly Compared\n\nThe fact that Samsung Electronics’ operating profit guidance for the second quarter of 2026 exceeds its full-year operating profit for 2025 is a strong signal that its earnings resilience has surged. However, it is risky to simply multiply a single quarter’s figure by four to determine annual earnings. Memory prices, shipment volumes, exchange rates, bonuses, depreciation, and inventory valuations fluctuate from quarter to quarter.\n\n## Overall Assessment\n\nThe 2026 AI memory boom for Samsung Electronics and SK Hynix is not merely a passing trend; it is already reflected in their official earnings. The fact that retail investors absorbed the selling pressure despite foreign investors’ net sales of around 7 trillion won cannot be explained solely by unconditional frenzy. There are clear grounds for this: accelerating earnings growth, memory supply shortages, and an improved product mix centered on HBM.\n\nHowever, it is precisely because of these strong numbers that we must remain even more level-headed. The most dangerous moment in the memory industry may not be when earnings are poor, but when earnings are so strong that everyone begins to believe, “This time is different.” While this cycle may be longer and stronger than in the past, the laws of supply and demand have not disappeared.\n\nTherefore, investors must abandon simplistic frameworks such as “It’s over because foreign investors sold” or “It’s definitely cheap because the P/E ratio is low.” The key is to track the upcoming quarterly earnings reports, memory price growth rates, visibility into HBM contracts, the sustainability of Big Tech’s AI investments, and the pace of supply growth in 2027–2028 all at the same time.","content_html":"\u003cp\u003eBased on publicly available data as of July 9, 2026, this article examines and verifies the arguments regarding Samsung Electronics and SK Hynix—specifically, claims of market overheating, undervaluation, and an AI memory supercycle—separately. The conclusion is not straightforward. While large-scale net selling by foreign investors is a clear warning sign, the official earnings reports and memory price trends of both companies simultaneously indicate profit leverage that is far stronger than in past semiconductor cycles.\u003c/p\u003e\n\u003cp\u003eHowever, conclusions such as “sell immediately” or “buy unconditionally” are not appropriate for a data-driven analysis. Investment decisions must take into account official earnings, consensus estimates, memory prices, the sustainability of clients’ AI investments, the pace of supply growth, and valuation.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#key-conclusions\" class=\"anchor\" id=\"key-conclusions\"\u003e\u003c/a\u003eKey Conclusions\u003c/h2\u003e\n\u003cul\u003e\n\u003cli\u003eForeign investors’ net selling of approximately 7 trillion won worth of KOSPI stocks is more likely to be interpreted as profit-taking and portfolio rebalancing focused on large-cap semiconductor stocks—which had surged sharply at the time—rather than a general withdrawal from the Korean stock market.\u003c/li\u003e\n\u003cli\u003eSamsung Electronics has provided guidance for Q2 operating profit of approximately 89.4 trillion won, following Q1 2026 operating profit of 57.23 trillion won. Even a simple sum of the first half figures alone amounts to approximately 146.6 trillion won.\u003c/li\u003e\n\u003cli\u003eSK Hynix reported first-quarter 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won, and an operating profit margin of 72%. While this level of profitability is rare in the manufacturing sector, figures around 75% still require a distinction between official confirmed figures and estimates.\u003c/li\u003e\n\u003cli\u003eDemand for AI servers, HBM, server DRAM, and eSSDs is driving memory prices sharply higher. However, if the rate of price increases slows or supply expansion outpaces demand, stock prices could correct before earnings results are released.\u003c/li\u003e\n\u003cli\u003eThe key to deciding whether to sell or hold is not so much “whether the stock price has risen significantly,” but rather “whether the pace of upward revisions to earnings forecasts is being maintained” and “whether visibility on memory prices and orders is deteriorating.”\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch2\u003e\u003ca href=\"#claims-in-the-original-text-and-verifiable-data\" class=\"anchor\" id=\"claims-in-the-original-text-and-verifiable-data\"\u003e\u003c/a\u003eClaims in the Original Text and Verifiable Data\u003c/h2\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eIssue\u003c/th\u003e\n\u003cth\u003eVerifiable Facts\u003c/th\u003e\n\u003cth\u003eInterpretation\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eForeign investors’ sales in the 7 trillion won range\u003c/td\u003e\n\u003ctd\u003eAs of the May 7, 2026, report, foreign investors were net sellers of approximately 7.15 trillion to 7.17 trillion won on the KOSPI, while retail investors were net buyers of approximately 5.99 trillion won. The KOSPI closed at 7,490.05, up 1.43%.\u003c/td\u003e\n\u003ctd\u003eLarge-scale selling does not always lead to a sharp drop in the index. At that time, buying by retail and institutional investors, along with expectations for semiconductor earnings, absorbed the selling pressure.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eStocks Targeted by Selling\u003c/td\u003e\n\u003ctd\u003eForeign investors’ net sales of Samsung Electronics and SK Hynix totaled approximately 5.27 trillion won, accounting for about 74% of the total foreign net sales on the KOSPI.\u003c/td\u003e\n\u003ctd\u003eThis can be viewed as a reduction in exposure to the stocks that had led the recent rally, rather than a general flight from the Korean market.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eSamsung Electronics: “Annual Operating Profit in the 300 Trillion Won Range”\u003c/td\u003e\n\u003ctd\u003eThis is not an officially confirmed figure. However, based solely on the first-quarter 2026 operating profit of 57.23 trillion won and the second-quarter guidance of 89.4 trillion won, the first half of the year would total approximately 146.6 trillion won.\u003c/td\u003e\n\u003ctd\u003eThe forecast of annual operating profit in the 300 trillion won range falls within the realm of estimates by some securities firms and the consensus. A distinction must be made between guidance and forecasts.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eSK Hynix: “Operating Profit Margin of 75%”\u003c/td\u003e\n\u003ctd\u003eThe operating profit margin for the most recent officially confirmed quarter—Q1 2026—was 72%.\u003c/td\u003e\n\u003ctd\u003eA forecast in the mid-70% range is possible, but it remains an estimate until official earnings are announced.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eSoaring Memory Prices\u003c/td\u003e\n\u003ctd\u003eTrendForce forecasts that in Q2 2026, contract prices for standard DRAM will rise by 58–63%, and NAND flash prices will rise by 70–75%. For the third quarter, it forecast a slowdown in the rate of increase, with DRAM prices rising 13–18% and NAND prices 10–15%.\u003c/td\u003e\n\u003ctd\u003eWhile prices will continue to rise, stock prices become more sensitive when the rate of increase slows.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eThe 40-Month Semiconductor Cycle\u003c/td\u003e\n\u003ctd\u003eWhile investment in AI infrastructure may extend the cycle, it is difficult to conclude that the supply and price cycle of the memory industry itself has disappeared.\u003c/td\u003e\n\u003ctd\u003eIt is more accurate to say that “the demand base and duration of the cycle have changed” rather than “the cycle has been broken.”\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#why-did-retail-investors-snap-up-foreign-selling\" class=\"anchor\" id=\"why-did-retail-investors-snap-up-foreign-selling\"\u003e\u003c/a\u003eWhy Did Retail Investors Snap Up Foreign Selling?\u003c/h2\u003e\n\u003cp\u003eAttributing all retail buying solely to FOMO (fear of missing out) may underestimate the phenomenon. Three factors converged behind retail investors’ purchases of major semiconductor stocks at the time.\u003c/p\u003e\n\u003cp\u003eFirst, earnings forecasts were sharply revised upward. Samsung Electronics’ guidance for the second quarter of 2026 significantly exceeds its full-year 2025 operating profit of 43.6 trillion won—by more than a full year’s worth in just one quarter. SK Hynix also posted an operating profit of 37.6 trillion won in the first quarter of 2026—equivalent to about 80% of its full-year 2025 operating profit of 47.2 trillion won—in a single quarter.\u003c/p\u003e\n\u003cp\u003eSecond, foreign selling does not necessarily indicate a deterioration in fundamentals. Such selling may be a mix of portfolio rebalancing to reduce exposure to surging blue-chip stocks, short-term profit-taking, and sales for currency exchange rate and risk management purposes.\u003c/p\u003e\n\u003cp\u003eThird, Korean retail investors can intuitively grasp the profit sensitivity of Samsung Electronics and SK Hynix. This is because the business structure is such that when semiconductor prices rise, not only revenue but also profit margins increase. However, if this intuition becomes excessive, it can lead to chase buying that ignores price and risk.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#the-structure-of-the-ai-memory-boom\" class=\"anchor\" id=\"the-structure-of-the-ai-memory-boom\"\u003e\u003c/a\u003eThe Structure of the AI Memory Boom\u003c/h2\u003e\n\u003ch3\u003e\u003ca href=\"#what-is-hbm\" class=\"anchor\" id=\"what-is-hbm\"\u003e\u003c/a\u003eWhat Is HBM?\u003c/h3\u003e\n\u003cp\u003eHBM stands for High Bandwidth Memory. It is a type of high-bandwidth memory created by vertically stacking multiple DRAM chips to enable AI accelerators and GPUs to rapidly exchange large volumes of data. Since memory bandwidth and power efficiency—not just computational performance—become bottlenecks in the training and inference of large-scale AI models, the strategic value of HBM has increased.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#why-have-dram-and-nand-prices-risen-as-well\" class=\"anchor\" id=\"why-have-dram-and-nand-prices-risen-as-well\"\u003e\u003c/a\u003eWhy Have DRAM and NAND Prices Risen as Well?\u003c/h3\u003e\n\u003cp\u003eHBM production requires significant amounts of high-end DRAM wafers, packaging, and testing resources. When memory manufacturers prioritize production capacity for HBM and server-grade products, the supply of standard DRAM decreases. At the same time, AI servers require a large number of high-performance SSDs to store model parameters, vector databases, logs, caches, and checkpoints. This creates a ripple effect where HBM demand drives up prices for server DRAM, eSSDs, and even NAND.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#why-operating-profit-margins-are-abnormally-high\" class=\"anchor\" id=\"why-operating-profit-margins-are-abnormally-high\"\u003e\u003c/a\u003eWhy Operating Profit Margins Are Abnormally High\u003c/h3\u003e\n\u003cp\u003eThe memory semiconductor industry is characterized by a high proportion of fixed costs. Since factory and equipment costs have already been incurred, when selling prices rise, a significant portion of the additional revenue flows directly into operating profit. During periods of supply shortages, customers prioritize securing volume over price, leading to simultaneous improvements in both product mix and pricing. This is the key factor behind exceptional figures such as SK Hynix’s 72% operating profit margin in the first quarter of 2026.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#the-difference-between-samsung-electronics-and-sk-hynix\" class=\"anchor\" id=\"the-difference-between-samsung-electronics-and-sk-hynix\"\u003e\u003c/a\u003eThe Difference Between Samsung Electronics and SK Hynix\u003c/h2\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCategory\u003c/th\u003e\n\u003cth\u003eSamsung Electronics\u003c/th\u003e\n\u003cth\u003eSK Hynix\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eBusiness Structure\u003c/td\u003e\n\u003ctd\u003eDiversified structure including memory, System LSI, foundry, smartphones, displays, and home appliances\u003c/td\u003e\n\u003ctd\u003ePure-play semiconductor business focused on memory, with high sensitivity\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eLatest Confirmed Major Financial Results\u003c/td\u003e\n\u003ctd\u003eGuidance for Q2 2026: Revenue of approximately 171 trillion won, operating profit of approximately 89.4 trillion won\u003c/td\u003e\n\u003ctd\u003eQ1 2026 revenue of 52.5763 trillion won, operating profit of 37.6103 trillion won\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eStrengths\u003c/td\u003e\n\u003ctd\u003eSimultaneously benefits from a recovery in the memory market and options in the foundry and finished product businesses\u003c/td\u003e\n\u003ctd\u003eBooming demand for HBM, server DRAM, and eSSDs directly drives profits\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eKey Risks\u003c/td\u003e\n\u003ctd\u003eCost pressures in the set business; fluctuations in foundry yield and order intake; sustainability of HBM competitiveness\u003c/td\u003e\n\u003ctd\u003eHigh profit sensitivity to falling memory prices; high concentration of customers and products\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eKey Metrics for Investors\u003c/td\u003e\n\u003ctd\u003eDS division profit margin, HBM shipments and customer certifications, improvement in foundry profitability\u003c/td\u003e\n\u003ctd\u003eHBM volume and prices, server DRAM prices, eSSD profitability, pace of capital expenditures\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#why-you-shouldnt-blindly-believe-that-a-pe-ratio-of-56-is-cheap\" class=\"anchor\" id=\"why-you-shouldnt-blindly-believe-that-a-pe-ratio-of-56-is-cheap\"\u003e\u003c/a\u003eWhy You Shouldn’t Blindly Believe That “A P/E Ratio of 5–6 Is Cheap”\u003c/h2\u003e\n\u003cp\u003eSemiconductor stocks have traditionally tended to have lower P/E ratios as earnings approach their peak. While a low P/E ratio may appear attractive when earnings grow significantly and earnings per share (EPS) surge, this is because the market is already pricing in the next downturn cycle to justify the low valuation.\u003c/p\u003e\n\u003cp\u003eTherefore, a low P/E ratio does not always indicate undervaluation. The key questions are as follows:\u003c/p\u003e\n\u003col\u003e\n\u003cli\u003eAre earnings forecasts for the next 4–8 quarters continuing to be revised upward?\u003c/li\u003e\n\u003cli\u003eWill the long-term contract prices for HBM and server DRAM hold steady?\u003c/li\u003e\n\u003cli\u003eAre customers’ AI infrastructure investment plans holding steady?\u003c/li\u003e\n\u003cli\u003eIs there a possibility that new capital expenditures could create an oversupply in 2027–2028?\u003c/li\u003e\n\u003cli\u003eHas the stock price risen too far ahead of the earnings growth rate?\u003c/li\u003e\n\u003c/ol\u003e\n\u003cp\u003eThe P/E ratio is merely a starting point. In the memory industry, the direction and pace of earnings growth are often more important than the absolute size of profits.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#signals-to-consider-selling-or-reducing-exposure\" class=\"anchor\" id=\"signals-to-consider-selling-or-reducing-exposure\"\u003e\u003c/a\u003eSignals to Consider Selling or Reducing Exposure\u003c/h2\u003e\n\u003cp\u003eThis list is not investment advice but a checklist for assessing risk.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eThe growth rate of DRAM and NAND contract prices slows, and securities firms stop raising their earnings estimates.\u003c/li\u003e\n\u003cli\u003eHBM supply contract terms shorten, or pressure to renegotiate prices increases.\u003c/li\u003e\n\u003cli\u003eAI capital expenditure guidance from NVIDIA, cloud service providers, and Big Tech companies is revised downward.\u003c/li\u003e\n\u003cli\u003eCustomer inventory days increase, and orders shift from a “stockpiling” mode to a “de-stocking” mode.\u003c/li\u003e\n\u003cli\u003eCapital expenditures by major companies such as Samsung Electronics, SK Hynix, and Micron surge simultaneously, raising concerns about a supply glut in 2027–2028.\u003c/li\u003e\n\u003cli\u003eStock prices have surged sharply in the short term, but earnings estimates have not kept pace, making both forward P/E and P/B ratios a cause for concern.\u003c/li\u003e\n\u003cli\u003eVariables affecting South Korean semiconductor production costs—such as a strong won, export restrictions, geopolitical risks, and electricity, water, and labor costs—are deteriorating.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch2\u003e\u003ca href=\"#signals-that-could-justify-holding-or-increased-interest\" class=\"anchor\" id=\"signals-that-could-justify-holding-or-increased-interest\"\u003e\u003c/a\u003eSignals That Could Justify Holding or Increased Interest\u003c/h2\u003e\n\u003cp\u003eConversely, if the following signals continue to emerge, it would be difficult to conclude that fundamentals have been compromised, even if a short-term correction occurs.\u003c/p\u003e\n\u003cul\u003e\n\u003cli\u003eQuarterly earnings consistently exceed consensus estimates.\u003c/li\u003e\n\u003cli\u003eRising memory prices spread beyond HBM to server DRAM, LPDDR, and eSSD.\u003c/li\u003e\n\u003cli\u003eLong-term supply contracts with major customers, advance payments, and take-or-pay agreements increase.\u003c/li\u003e\n\u003cli\u003eEven as capital expenditures rise, the actual start of operations is delayed, prolonging the supply shortage.\u003c/li\u003e\n\u003cli\u003eShareholder returns, dividends, and share buyback policies link the surge in profits to shareholder value.\u003c/li\u003e\n\u003cli\u003eOrders from major customers for Samsung Electronics’ foundry business are confirmed not just by media reports but through official contracts and revenue.\u003c/li\u003e\n\u003c/ul\u003e\n\u003ch2\u003e\u003ca href=\"#points-to-consider-when-expanding-your-focus-to-foundries-and-equipment-stocks\" class=\"anchor\" id=\"points-to-consider-when-expanding-your-focus-to-foundries-and-equipment-stocks\"\u003e\u003c/a\u003ePoints to Consider When Expanding Your Focus to Foundries and Equipment Stocks\u003c/h2\u003e\n\u003cp\u003eBottlenecks in TSMC’s advanced processes and packaging could present opportunities for Samsung Electronics’ foundry business and domestic semiconductor equipment, materials, and component companies. However, the mere fact that “TSMC is busy” does not mean that all domestic foundry-related stocks will benefit.\u003c/p\u003e\n\u003cp\u003eEquipment and materials stocks are more volatile than large-cap stocks. The following points should be verified.\u003c/p\u003e\n\u003cdiv class=\"overflow-x-auto\"\u003e\u003ctable\u003e\n\u003cthead\u003e\n\u003ctr\u003e\n\u003cth\u003eCheckpoint\u003c/th\u003e\n\u003cth\u003eWhy It’s Important\u003c/th\u003e\n\u003c/tr\u003e\n\u003c/thead\u003e\n\u003ctbody\u003e\n\u003ctr\u003e\n\u003ctd\u003eActual Revenue Exposure\u003c/td\u003e\n\u003ctd\u003eVerify whether increased investment by Samsung Electronics and SK Hynix translates into revenue for the company in question.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eProcess Stage\u003c/td\u003e\n\u003ctd\u003eThe closer a company is to bottleneck areas—such as HBM, advanced packaging, EUV, inspection and metrology, and eSSD—the greater its potential to benefit.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eOrder Backlog\u003c/td\u003e\n\u003ctd\u003eThis indicates whether there are actual orders, rather than just a market trend.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eOperating Profit Margin\u003c/td\u003e\n\u003ctd\u003eEven if revenue increases, profits can be diluted if costs—such as production costs, labor costs, and component procurement costs—rise.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eCustomer Concentration\u003c/td\u003e\n\u003ctd\u003eIf a single customer’s investment schedule is delayed, earnings volatility increases.\u003c/td\u003e\n\u003c/tr\u003e\n\u003ctr\u003e\n\u003ctd\u003eValuation\u003c/td\u003e\n\u003ctd\u003eThese stocks may rise faster than blue-chip stocks, but they can fall even more sharply if expectations are dashed.\u003c/td\u003e\n\u003c/tr\u003e\n\u003c/tbody\u003e\n\u003c/table\u003e\u003c/div\u003e\n\u003ch2\u003e\u003ca href=\"#key-distinctions-to-make-when-interpreting-data\" class=\"anchor\" id=\"key-distinctions-to-make-when-interpreting-data\"\u003e\u003c/a\u003eKey Distinctions to Make When Interpreting Data\u003c/h2\u003e\n\u003ch3\u003e\u003ca href=\"#official-earnings-guidance-and-consensus-are-different\" class=\"anchor\" id=\"official-earnings-guidance-and-consensus-are-different\"\u003e\u003c/a\u003eOfficial Earnings, Guidance, and Consensus Are Different\u003c/h3\u003e\n\u003cp\u003eOfficial earnings are past figures announced by the company. Guidance is a preliminary forecast provided by the company. Consensus is the average or range of forecasts from securities firms. The statement, “Samsung Electronics may generate operating profit in the 300 trillion won range this year,” is a forecast, not an officially confirmed result.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#operating-profit-and-net-income-are-different\" class=\"anchor\" id=\"operating-profit-and-net-income-are-different\"\u003e\u003c/a\u003eOperating Profit and Net Income Are Different\u003c/h3\u003e\n\u003cp\u003eOperating profit is the profit generated from core business operations. Net income is the final profit after accounting for financial gains and losses, taxes, equity method adjustments, and one-time gains and losses. When comparing global companies, mixing operating profit and net income in your analysis can distort the conclusions.\u003c/p\u003e\n\u003ch3\u003e\u003ca href=\"#quarterly-and-annual-earnings-should-not-be-directly-compared\" class=\"anchor\" id=\"quarterly-and-annual-earnings-should-not-be-directly-compared\"\u003e\u003c/a\u003eQuarterly and Annual Earnings Should Not Be Directly Compared\u003c/h3\u003e\n\u003cp\u003eThe fact that Samsung Electronics’ operating profit guidance for the second quarter of 2026 exceeds its full-year operating profit for 2025 is a strong signal that its earnings resilience has surged. However, it is risky to simply multiply a single quarter’s figure by four to determine annual earnings. Memory prices, shipment volumes, exchange rates, bonuses, depreciation, and inventory valuations fluctuate from quarter to quarter.\u003c/p\u003e\n\u003ch2\u003e\u003ca href=\"#overall-assessment\" class=\"anchor\" id=\"overall-assessment\"\u003e\u003c/a\u003eOverall Assessment\u003c/h2\u003e\n\u003cp\u003eThe 2026 AI memory boom for Samsung Electronics and SK Hynix is not merely a passing trend; it is already reflected in their official earnings. The fact that retail investors absorbed the selling pressure despite foreign investors’ net sales of around 7 trillion won cannot be explained solely by unconditional frenzy. There are clear grounds for this: accelerating earnings growth, memory supply shortages, and an improved product mix centered on HBM.\u003c/p\u003e\n\u003cp\u003eHowever, it is precisely because of these strong numbers that we must remain even more level-headed. The most dangerous moment in the memory industry may not be when earnings are poor, but when earnings are so strong that everyone begins to believe, “This time is different.” While this cycle may be longer and stronger than in the past, the laws of supply and demand have not disappeared.\u003c/p\u003e\n\u003cp\u003eTherefore, investors must abandon simplistic frameworks such as “It’s over because foreign investors sold” or “It’s definitely cheap because the P/E ratio is low.” The key is to track the upcoming quarterly earnings reports, memory price growth rates, visibility into HBM contracts, the sustainability of Big Tech’s AI investments, and the pace of supply growth in 2027–2028 all at the same time.\u003c/p\u003e\n","tags":["Semiconductors","Investment","Samsung Electronics","SK hynix","AI Memory","Fact Check"],"faqs":[{"question":"Is it always bad news when foreign investors sell more than 7 trillion won worth of stocks?","answer":"It isn't necessarily bad news. While foreign selling may reflect a deterioration in the economy or corporate earnings, it could also be profit-taking on sharply rising blue-chip stocks or portfolio rebalancing. At the time, buying by retail and institutional investors, along with expectations for strong semiconductor earnings, absorbed the selling pressure."},{"question":"Are all purchases by individual investors driven by FOMO?","answer":"No. While some of this may be a mix of chase buying and FOMO, the sharp upward revisions to the earnings forecasts for Samsung Electronics and SK Hynix are also a key factor driving retail buying. However, buying without regard for price—even when fundamentals are strong—poses a separate risk."},{"question":"Is the forecast that Samsung Electronics will post operating profits in the 300 trillion won range in 2026 a confirmed fact?","answer":"This is not a confirmed fact. The company has officially announced only its past earnings and quarterly guidance; the forecast of around 300 trillion won for the year falls within the realm of securities firms’ estimates or market consensus. Investors should distinguish between official earnings, company guidance, and market forecasts."},{"question":"Is SK Hynix's operating profit margin of 75% an official figure?","answer":"The officially confirmed operating profit margin for the first quarter of 2026 is 72%. Figures around 75% may represent forecasts or estimates for subsequent quarters, so they should not be treated as definitive figures until the actual quarterly results are announced."},{"question":"Does a P/E ratio of 5 to 6 necessarily mean a stock is undervalued?","answer":"That is not necessarily the case. Memory semiconductors often appear to have low P/E ratios when their earnings are at their peak. To determine whether a low P/E ratio indicates that the stock is undervalued, one must consider the earnings outlook for the next quarter, price growth rates, increases in supply, and the sustainability of customer investment."},{"question":"Has the 40-month semiconductor cycle been broken?","answer":"It is difficult to conclude that the cycle has ended. While demand for AI servers and HBM could make the cycle longer and stronger, the risks of supply expansion and price declines in the memory industry still exist."},{"question":"Why is demand for HBM driving up the prices of standard DRAM and NAND as well?","answer":"When HBM production absorbs high-end DRAM production capacity, the supply of standard DRAM decreases. Since AI servers also require high-capacity storage devices, demand for eSSDs and NAND flash memory increases as well. When supply is tight, this chain reaction leads to price increases."},{"question":"Do stocks related to Samsung Electronics' foundry business also benefit in the same way?","answer":"This does not mean they will automatically benefit. While the TSMC bottleneck could present an opportunity for Samsung Electronics’ foundry business, it is necessary to separately assess the actual order intake, process exposure, customer concentration, profitability, and valuation of the relevant companies."},{"question":"What is the most important indicator when deciding when to sell?","answer":"The key factors are the rate of increase in memory contract prices, visibility into HBM orders, whether earnings estimates will be raised, Big Tech’s AI investment plans, and the pace of supply expansion. What matters more than the stock price itself is whether the momentum of earnings growth is slowing."},{"question":"Is this post a buy or sell recommendation?","answer":"No. This article is an informational piece that verifies claims regarding supply, demand, and performance based on publicly available data. Actual investment decisions should be made after considering an individual’s investment horizon, risk tolerance, portfolio allocation, taxes, and transaction costs."}],"sources":[{"url":"https://news.samsungsemiconductor.com/global/samsung-electronics-announces-earnings-guidance-for-second-quarter-2026/","title":"Samsung Electronics Announces Earnings Guidance for the Second Quarter of 2026","type":"source"},{"url":"https://news.samsungsemiconductor.com/global/samsung-electronics-announces-first-quarter-2026-results/","title":"Samsung Electronics Announces First-Quarter 2026 Results","type":"source"},{"url":"https://news.samsung.com/global/samsung-electronics-announces-fourth-quarter-and-fy-2025-results","title":"Samsung Electronics Announces Fourth-Quarter and Fiscal Year 2025 Results","type":"source"},{"url":"https://news.skhynix.co.kr/q1-2026-business-results/","title":"SK Hynix Announces First-Quarter 2026 Financial Results","type":"source"},{"url":"https://news.skhynix.com/sk-hynix-announces-fy25-financial-results/","title":"SK hynix Reports Record Annual Financial Results for 2025","type":"source"},{"url":"https://marketin.edaily.co.kr/News/ReadE?newsId=07084806645446624","title":"Foreign Investors Sell 5 Trillion Won Worth of Samsung and SK Hynix Shares… Yet the KOSPI Hits a Record High","type":"source"},{"url":"https://www.mt.co.kr/stock/2026/05/07/2026050716332265134","title":"Foreign Investors Sold 7 Trillion Today Alone... Here Are the Four Stocks They Dumped in a Frenzy","type":"source"},{"url":"https://www.trendforce.com/presscenter/news/20260331-12995.html","title":"TrendForce Says AI Server Demand Will Drive Memory Contract Price Increases in 2Q26","type":"source"},{"url":"https://www.trendforce.com/presscenter/news/20260703-13134.html","title":"TrendForce Says AI Server Demand Will Continue to Support Memory Prices in 3Q26","type":"source"},{"url":"https://www.reuters.com/world/china/tsmc-boss-upbeat-outlook-ai-boom-shows-no-sign-easing-2026-06-04/","title":"TSMC is working hard to meet chip demand and would like to raise prices","type":"source"},{"url":"https://www.reuters.com/world/asia-pacific/samsung-estimates-19-fold-rise-q2-operating-profit-beating-expectations-2026-07-06/","title":"Samsung Reports a 19-Fold Increase in Profit, but Shares Plunge Amid Fears the AI Boom May Stall","type":"source"}],"images":[{"id":123,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE3OCwicHVyIjoiYmxvYl9pZCJ9fQ==--f66b8e54961cb06037ed21f880746e7f60442bc9/ai-e1f97137.webp","is_representative":true,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"반도체 칩과 웨이퍼, 데이터센터 앞의 하락·상승 화살표와 균형 저울","caption":"AI 메모리 기대와 외국인 매도 압력이 반도체주 흐름을 가르는 모습을 상징한다.","description":null},"en":{"alt":"Semiconductor chip, wafer and data centers with falling red and rising teal arrows","caption":"The illustration contrasts AI memory growth hopes with selling pressure on Korean chip stocks.","description":null},"ja":{"alt":"半導体チップとウエハー、データセンター、下落と上昇の矢印","caption":"AIメモリーへの期待と韓国半導体株への売り圧力の対比を示している。","description":null},"es":{"alt":"Chip semiconductor, oblea y centros de datos con flechas rojas a la baja y verdes al alza","caption":"La ilustración contrapone el impulso de la memoria de IA con la presión vendedora sobre chips coreanos.","description":null},"id":{"alt":"Chip semikonduktor, wafer, dan pusat data dengan panah merah turun serta panah hijau naik","caption":"Ilustrasi ini memperlihatkan tarik-menarik antara prospek memori AI dan tekanan jual saham chip Korea.","description":null},"pt":{"alt":"Chip semicondutor, wafer e data centers com setas vermelhas em queda e verdes em alta","caption":"A ilustração contrapõe as expectativas para memória de IA à pressão de venda sobre ações de chips coreanas.","description":null},"zh-hant":{"alt":"半導體晶片、晶圓與資料中心，紅色下跌箭頭和綠色上升箭頭","caption":"插圖呈現AI記憶體成長期待與韓國晶片股賣壓之間的拉鋸。","description":null}}},{"id":124,"url":"https://injoys.com/rails/active_storage/blobs/redirect/eyJfcmFpbHMiOnsiZGF0YSI6MTE4NCwicHVyIjoiYmxvYl9pZCJ9fQ==--4054049ce191f040b71f7acec63075732aea2f14/ai-976c1c32.webp","is_representative":false,"generation_method":"ai_image","license":"ai_generated","mime_type":"image/webp","translations":{"ko":{"alt":"공장, 서버, 그래프와 연결된 AI 메모리 칩 더미와 돋보기 문서","caption":"AI 메모리 산업 흐름과 실적 점검을 상징적으로 보여준다.","description":null},"en":{"alt":"Stacked AI memory chips linked to a factory, servers, chart, warning sign, and magnified documents","caption":"The illustration frames AI memory chips amid production, data demand, risks, and fact-checking.","description":null},"ja":{"alt":"工場、サーバー、グラフ、警告、拡大された書類につながるAIメモリーチップの束","caption":"AIメモリーの生産、需要、リスク、検証を象徴的に描いている。","description":null},"es":{"alt":"Chips de memoria de IA conectados con fábrica, servidores, gráfico, alerta y documentos ampliados","caption":"La ilustración contextualiza la memoria de IA entre producción, demanda, riesgos y verificación.","description":null},"id":{"alt":"Tumpukan chip memori AI terhubung ke pabrik, server, grafik, tanda peringatan, dan dokumen diperbesar","caption":"Ilustrasi ini menggambarkan memori AI dalam konteks produksi, permintaan, risiko, dan pemeriksaan fakta.","description":null},"pt":{"alt":"Chips de memória de IA ligados a fábrica, servidores, gráfico, alerta e documentos ampliados","caption":"A ilustração situa a memória de IA entre produção, demanda, riscos e verificação de fatos.","description":null},"zh-hant":{"alt":"AI 記憶體晶片堆疊，連結工廠、伺服器、圖表、警示與放大文件","caption":"插圖象徵 AI 記憶體的生產、需求、風險與事實查核。","description":null}}}],"published_at":"2026-07-10T08:44:53+09:00","updated_at":"2026-07-10T08:45:02+09:00","license":"cc_by","translation_status":"reviewed","available_locales":["ko","en","ja","es"],"data_locales":["ko","en","ja","es","id","pt","zh-hant"],"url":"https://injoys.com/en/articles/samsung-sk-hynix-ai-memory-stock-fact-check"}