Samsung Electronics (005930 KP) Buy: Focus on fundamentals; further catalysts from CPU growth for agentic AI

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Samsung Electronics (005930 KP) Buy: Focus on fundamentals; further catalysts from CPU growth for agentic AI

(%) 11.1 53.0 49.3 36.9

fundamentals.

52-WEEK PRICE (KRW)

Booming commodity DRAM for CPUs. Demand catalysts are moving to CPU

customers, which better manage AI agents through general servers, from HBM for 500000.00

GPU. X86 CPU (server DRAM) and ARM based CPU (mobile DRAM) actively 252150.00

support such demand growth, benefiting commodity DRAM makers extensively. ARM

4300.00

based CPU in particular is increasing market share at data centres with new memory 05/25 11/25 05/26

modulation standard called SO-CAMM2 and with a 30-40% premium over PC DRAM. TargetHigh: 296000.00price: 450000.00Low: 53900.00 Current: 275500.00

We see SO-CAMM2 accounting for 10% of DRAM demand in 2027e. General Source: LSEG IBES, HSBC estimates

servers 1) orchestrate AI agents more effectively; and 2) consume less power than AI

Ricky Seo*

servers, raising the appetite for mix optimisation. Head of Korea Research, Semiconductor and Display

The Hongkong and Shanghai Banking Corporation Limited,

Persisting robust CSP capex. We think: 1) the memory cycle is at a midpoint Seoul Securities Branch

similar to the 1990-95 supercycle when office automation led to a 6yr DRAM rickyjuilseo@kr.hsbc.com

+822 3706 8777

shortage; 2) AI is diversifying memory demand to SO-CAMM2 and ICMS from HBM

to lower costs per token and boosting AI usage; 3) CSPs will continue aggressive HanResearchKil Chang*Analyst, Korea Technology

capex as service fees are rising and better ROIC is expected. 2026 capex will reach The Hongkong and Shanghai Banking Corporation Limited,

Seoul Securities Branch

USD642bn (+71% y-o-y) at US CSPs, from +60% before 1Q earnings. han.kil.chang@kr.hsbc.com