South Korea's Semiconductors Plunge on NAND Fears, But Brokers See Buying Opportunity

South Korea's semiconductor sector is facing a correction, but brokerages see it as an opportunity to buy. Samsung Electronics and SK Hynix shares plummeted due to concerns over NAND flash prices in the second half of next year, surging oil prices, and rising interest rates.

However, analysts argue that core fundamentals remain solid. Kim Young-gun from Mirae Asset Securities believes the recent correction has priced in the possibility of NAND price declines next year, making it a good time to increase exposure based on fundamentals.

The growth trajectory of DRAM and High Bandwidth Memory (HBM) is becoming even more robust. With spot prices for general-purpose DRAM extending their rally beyond 40 trading days, production capacity constraints are expected to be unavoidable for an extended period.

Kang Da-hyun from KB Securities projects that HBM's share of total DRAM wafer production capacity will more than double next year, driving a powerful virtuous cycle where memory prices surge at least 30% in the third quarter of this year and continuing through 2028.