Samsung Poised to Gain HBM Market Share, Bernstein Cuts SK Hynix Target

Samsung Electronics is poised to capture a larger share of the high-bandwidth memory (HBM) market, a move that could challenge current leader SK Hynix, according to a new analyst note from Bernstein.

A Shifting HBM Landscape

In a note to clients on Tuesday, Bernstein analyst Mark Li detailed the firm's expectation of a market share shift in the critical HBM sector, which supplies essential components for AI accelerators. Citing "more conservative assumptions on HBM progress and pricing," the firm lowered its price target on SK Hynix (000660) to 2.7 million won from a previous 3.3 million won.

Conversely, Bernstein maintained its 440,000 won price target and Outperform rating for Samsung Electronics (005930). "We still prefer Samsung among the incumbent suppliers," Li wrote. The updated view is based on Korean memory export data from July and August, which showed "strong signals for Samsung but weaker ones from SK Hynix's HBM production site," the note stated.

Broader Memory Market Outlook

Bernstein also adjusted its forecast for the HBM market, lowering its price assumptions for 2027. The firm pointed to continued reports of supply difficulties with HBM4, the next-generation standard, leading it to delay its forecast for the industry's transition away from the current HBM3E generation.

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As a result of these pricing and technology transition dynamics, the analyst now expects HBM to remain less profitable than conventional DRAM in 2027. For the broader memory market, Bernstein anticipates near-term price strength, forecasting conventional memory prices will rise by mid-teens to 20% in the third quarter, followed by a high-single-digit increase in the fourth.

Long-Term Normalization Expected

Looking further ahead, Bernstein expects shortages to persist into 2027. However, the firm sees prices normalizing in 2028 as new capacity comes online and AI investment growth faces constraints such as higher borrowing costs and environmental concerns.

This normalization is projected to cause supplier gross margins to ease from a peak of approximately 90% to the high 70s by the end of 2028. Bernstein maintained its Outperform ratings on U.S.-based memory makers Micron (MU) and SanDisk (SNDK), while reiterating an Underperform rating on Japan's Kioxia.