April 20, 2024

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[THE INVESTOR] Samsung Electronics and SK hynix both saw their respective share price hit an all-time high on Sept. 22, thanks to the rosy outlook for memory chips.

Samsung’s shares climbed by 1.52 percent to 2,655,000 won in early morning trading while that of SK hynix increased 1.44 percent to 84,300 won.

The stocks have been on the upward trend in recent weeks as they are expected to ride the momentum in the DRAM market this year.

For Samsung, the robust initial sales of the Galaxy Note 8 is also forecast to shore up its profits.

“Both the DRAM and NAND memory chips will be in great demand during the year-end peak season for IT products and the anticipated high demand for chips will serve as a driving force to boost Samsung’s stock price,” said Kim Rok-ho, an analyst at Hana Financial Investment, forecasting the tech giant would rake in 14.5 trillion won in operating profit, up 179 percent on-year, in the third quarter.

The recent share price surge of SK hynix, the world’s second largest DRAM maker after Samsung, is also linked to its likely acquisition of Japanese tech firm Toshiba’s NAND memory chip business.

Toshiba announced on Sept. 21 that it has piked a consortium including US private equity fund Bain Capital, US tech giant Apple and SK hynix, to sell its memory chip unit.

SK hynix said the final negotiations to ink the deal will begin soon and there are still many hurdles.

After Toshiba’s announcement, US storage firm Western Digital, which leads a consortium for the Toshiba deal, has threatened to file a complaint to stop the acquisition process. WD argued Toshiba, its joint venture partner, should have offered it preferential negotiation rights.

Market analysts forecast the acquisition will boost SK hynix’s NAND business.

HMC Investment Securities expected that SK hynix is likely to post 3.8 trillion won operating profit in the July-September period, up from 726 billion won in the same period last year.

The stock price of Samsung and SK hynix closed at 2,650,000 won and 83,100 won, respectively, on Sept. 22.

By Kim Young-won (wone0102@heraldcorp.com)