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Investing.com -- The memory sector is experiencing significant shifts as NVIDIA’s updated specifications for High Bandwidth Memory 4 (HBM4) create both winners and losers among major players, according to Bernstein analysts.
Samsung Electronics emerges as the primary beneficiary of NVIDIA’s decision to raise HBM4 speed requirements. The South Korean tech giant’s strategic use of 4nm for base die and 1cnm for DRAM die, initially considered over-specification, now provides crucial headroom to meet these higher standards.
Bernstein has raised Samsung’s target price to KRW95000. Some investors might worry about Samsung adding excessive HBM capacity, but the brokerage sees Samsung will gain market share through next year.
Analysts believe the supply additions, particularly considering the yield learning process of 1cnm technology, won’t offset the benefits of projected 53% growth in HBM bit demand during the same period.
Samsung’s valuation remains attractive, with its multiple only returning to historical average levels.
In a recent development, Samsung Electronics has reportedly passed Nvidia’s qualification test for its 12-layer HBM3E product, a key step in supplying the high-demand chips.
Micron Technology faces challenges from NVIDIA’s increased HBM4 speed requirements. Bernstein maintains an Outperform rating while raising Micron’s target price to $170.
But it cautions that the company may struggle to deliver the 10-11 Gbps speeds that NVIDIA now demands. This limitation stems from the inferior planar process of Micron’s base die.
While Bernstein sees limited near-term headroom for Micron, they remain structurally positive on the company’s long-term prospects.
Micron Technology has seen positive sentiment from analysts, with firms including Wedbush and Susquehanna raising their price targets based on a strong outlook for the memory cycle and HBM demand.
KIOXIA’s, which is a NAND supplier, appears less promising despite projections of rapidly increasing book value.
Bernstein reiterates an Underperform rating, noting that KIOXIA’s recent stock rally has already priced in the forecasted 80% increase in book value over the next 12 months.
This valuation implies a 1.4x forward P/B ratio, approaching the top end of KIOXIA’s historical range, which analysts believe fails to account for structural concerns and a likely market downturn approximately one year from now.
SK hynix maintains an Outperform rating with a KRW400,000 target price from Bernstein. However, analysts observe that multiples are approaching peak levels for the company.
While short-term momentum may continue to drive the stock upward, Bernstein believes further upside potential is becoming limited until new catalysts emerge.
SK hynix received positive outlook revisions from rating agencies S&P, Fitch, and Moody’s, which pointed to the company’s strengthening financial profile and leadership in the HBM market.
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