HSBC Reaffirms Bullish Stance on Memory Chip Stocks, Citing AI-Driven Catalysts

HSBC is defending its optimistic outlook on Asian memory chipmakers, arguing that investor concerns over a potential peak in the semiconductor cycle are premature. In a note to clients, the bank's analysts asserted that fresh catalysts are emerging that should support continued growth in the sector.

Investor Concerns Mount

Following meetings with more than 30 investors in Asia, HSBC analysts Ricky Seo and Han Kil Chang identified several key market worries. Investors expressed concern that catalysts for share price appreciation were diminishing.

Key headwinds cited by investors include:

• A slowdown in memory earnings growth.
• Potential for capital expenditure deceleration from cloud service providers.
• The impact of aggressive capacity expansion on the supply-demand balance.
• High memory costs pushing customers toward lower-specification components.
• The risk of aggressive financing by Chinese competitors building new capacity.

Emerging AI and Pricing Catalysts

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HSBC countered that new growth drivers are coming into view, particularly related to artificial intelligence. The analysts highlighted anticipated price increases for high-bandwidth memory (HBM) and further average selling price (ASP) gains as HBM4 adoption begins. They also pointed to growth in SO-CAMM2 modules tied to ARM-based CPUs and rising NAND demand from AI agents.

The bank compared the current environment to the 1990-95 PC supercycle, arguing that agentic AI will reshape workflows and boost productivity. Analysts also noted that three- to five-year long-term agreements should improve earnings visibility and reduce volatility, potentially supporting higher valuations for chipmakers.

Stock-Specific Outlook

Among Korean technology firms, HSBC stated its preference for SK Hynix (KS:000660), citing its significant exposure to HBM and SO-CAMM2. The bank estimates the company can sustain an HBM market share of 50-55% in the 2027 HBM4 era.

HSBC also maintains a Buy rating on Samsung Electronics (KS:005930). The rationale includes its potential to catch up in HBM4, a recovery in its foundry business, and expected price hikes for commodity DRAM in the second half of 2026. The analysts also flagged rising interest in Samsung Electro-Mechanics (SEMCO), driven by a strengthening substrate cycle and an AI-fueled boom in MLCC components.