Nomura Securities of Japan has forecasted that demand for memory semiconductors will exceed supply growth until 2028, despite concerns regarding the profitability of artificial intelligence (AI) companies and the funding capabilities of data center operators.
According to a report by Yonhap News on October 20, Nomura highlighted Samsung Electronics and SK Hynix as key stocks to watch and issued a buy recommendation. While there are growing concerns about the revenue growth of AI companies and the funding capabilities of data center operators potentially leading to a slowdown in related capital investments, Nomura believes the long-term growth trend in the memory market will continue.
Nomura estimates that the new capacity for global data centers will expand from 22.3 gigawatts (GW) this year to 31.5 GW next year. As data center expansions continue, demand for memory is expected to grow faster than supply, creating a favorable environment for prices.
Nomura also assessed that market concerns regarding the advancements in 4F² technology by China's ChangXin Memory Technologies (CXMT) are overstated. They cited that the combined revenue of AI companies OpenAI and Anthropic is projected to increase by approximately 507% year-on-year in the third quarter of this year as further evidence.
Nomura set target prices of 670,000 won for Samsung Electronics and 4.7 million won for SK Hynix. However, they noted that if data center investment plans are scaled back or if projects that have secured funding experience significant delays, a reassessment of the memory demand outlook may be necessary.
* This article has been translated by AI.
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