South Korea Semiconductors: Solid Memory Fundamentals Prove Resilient Despite Market Concern

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South Korea Semiconductors: Solid Memory Fundamentals Prove Resilient Despite Market Concern

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14 Jul 2026 08:35:14 ET │ 11 pages

South Korea Semiconductors

Solid Memory Fundamentals Prove Resilient Despite Market Concern

CITI'S TAKE

The recent share prices of KR memory suppliers appear to have

experienced a deep correction due to growing market concerns about a

possible earnings slowdown in 2Q and ASP erosion in 2H26E, due to

memory LTAs. Contrary to the market concerns however, we believe there Peter LeeAC

is ample room for further ASP upside for the excess memory volume +82-2-3705-0720

demand vs. the confirmed volume under LTA as well as HBM. Moreover, peter.sc.lee@citi.com

we project that the new LTA pricing will mostly be reflected in 1H27E rather

Jayden Oh than 2H26E. With favorable memory pricing conditions expected to

continue, we remain constructive on the Korean memory space and +82-2-3705-0747

jayden.oh@citi.com reiterate our Buy rating on Samsung Electronics.

Memory Undersupply to Continue Despite Recent Market Concern — Recently,

memory equities have experienced notable corrections to their share prices owing to

growing market concerns around: 1) a possible slowdown in 2Q26 earnings and 2)

likely ASP erosion in 2H26E due to memory LTAs. However, we believe there is little

likelihood of memory ASP weakening in 2H26E. We expect memory LTAs will only

partially take effect in 2H26E and believe the pricing under memory LTAs will be

mostly reflected later in 1H27E, potentially alleviating market concern on soft ASP

growth. Even if memory LTAs come into effect in 27E, we think there would still be an

ample ASP upside for the excess volume vs. the confirmed LTA volume. Moreover,

contrary to negative views in the market on LTA, we believe LTA will generate