Morgan Stanley-Asia Technology Memory – The Power of Doing Nothing

MMarch22,202401:32PMGMTMorganStanleyAsiaLimited+IdeaAsiaTechnologyAsiaPacificShawnKim+8523963-1005+8522239-7357Memory–ThePowerofDoingEquityAnalyst+8522848-7291NothingShawn.Kim@morganstanley.comAttractiveWhat’sChangedFromToDuanLiuW210,000W230,000SKHynix(000660.KS)ResearchAssociatePriceTargetDuan.Liu@morganstanley.comJiaZhangResearchAssociateJia.L.Zhang@morganstanley.comS.KoreaTechnologyAsiaPacificIndustryViewSamsungElectronics(005930.KS)PriceTargetW95,000W97,000Newhighstypicallyleadtonewerhighswithplentyofearningsthistimetobackthemup;timeinthemarketismoreimportantthantimingthemarket.Notbeinginvestedinthebestdaysoftherallywilllikelyhaveyoumissthebiggainsoverthecycle.WeadjustestimatesforSKhynix/Samsung.Trendscontinuetotrendforalongtimeinbullmarkets.Focusonthebeststocksinthemarket(notthecheapones);itisnotlateforthememorytrade.(1)Weseenoevidencethatseasonaldemandweaknesshasimpactedmemorypricing;(2)pricinghasmovedhigherrecentlyfor2Q,especiallyNAND;(3)wethinkHBM3ecompetitivedynamicsshiftismorenoise/hopethanfact;and(4)valuationsatcyclicalpeaksdonotmatter,astheygivenoindicationastowhatastockwilldonext,especiallywhenanincrementalUS$37bnTAMby2027isgeneratingreturnsinawaythatAIorHBMcould.Channelchecks–Q2pricingmuchhigheronceagain.TheDRAMpriceoutlookisrisingagain,closertodoubledigitincreasesin2Q24,andwhilewewillnothave...