Nomura: Memory Super-Cycle and Foundry Recovery
Summaries are public. PDF access requires an active membership; all members have the same access. Sign in
Nomura maintains a Buy rating on Samsung Electronics (005930.KS), raising the target price from 290,000 KRW to 320,000 KRW. This revision reflects a strong memory pricing environment anticipated for the second quarter of 2026 and improving foundry prospects.
Nvidia's plan to adopt LPU technology for its Vera Rubin system presents a significant foundry opportunity. Nomura expects Samsung to mass-produce these chips using its 4nm process starting in the second half of 2026. The 4nm node is currently capacity-constrained due to high demand for HBM base dies and clients including AMD, Baidu, and Qualcomm. While the revenue contribution from this venture may be modest—estimated at roughly $3 billion in 2027—it represents a meaningful customer acquisition for Samsung's foundry division.
Driven by expectations that commodity DRAM and NAND prices will surge 40-50% sequentially in the second quarter of 2026, Nomura has lifted its 2026 and 2027 operating profit forecasts for Samsung by 32% and 37%, respectively. The firm projects an attractive 8.6% shareholder yield for 2026, supported by a projected 524% year-over-year increase in cash dividends and ongoing share buybacks. Trading at merely 4.6 times and 3.3 times forward earnings for 2026 and 2027, Samsung appears significantly undervalued. Key risks include potential failures in supplying HBM4 to Nvidia.