Kioxia's strong guidance points to upside for Korean memory leaders in NAND

Overview

This report uses Kioxia's CY1Q26 results and CY2Q26 guidance as a read-across to Korea's memory suppliers, SK Hynix and Samsung Electronics. The core conclusion is that Kioxia's strong revenue growth, ASP momentum, and high operating margin guidance may indicate Goldman Sachs' current forecasts for NAND ASP growth and NAND OPM at Korean companies are conservative.

Core views

First, Kioxia's CY2Q26 USD revenue guidance implies 70% qoq growth, and management said bit shipments would increase but the impact would be limited, so the strong revenue growth is mainly driven by ASP. Second, Kioxia's CY2Q26 operating margin guidance is 74%, while Goldman Sachs currently forecasts NAND OPM for SEC and Hynix at around 60%, leaving room for upward revision. Third, Kioxia remains bullish on the NAND market and expects supply to be tight in 2026 and 2027, with continued undersupply in 2027. Fourth, a potential ADR listing for Kioxia could improve sentiment toward SK Hynix because Hynix holds a significant stake in Kioxia through a consortium.

Analysis framework

The report applies a peer read-across approach, comparing Kioxia's quarterly results and next-quarter revenue and margin guidance with Goldman Sachs' forecasts for Samsung Electronics and SK Hynix's NAND ASP and OPM, and combining industry supply-demand commentary, AI data center demand, and enterprise demand to assess the potential earnings upside for Korean memory makers.

Methodology notes

• Valuation methodsPB valuation

  SK Hynix 12-month target price

  Goldman Sachs uses a 2026E/27E average P/B approach and assigns a 2.9x target P/B, resulting in a 12-month target price of W1,800,000 for SK Hynix.

• Valuation methodsEV/EBITDA SOTP

  Samsung Electronics 12-month target price

  Samsung Electronics' common stock target price is based on an SOTP approach using 2026E EV/EBITDA, at W320,000; the preference share target price is W245,000, based on a 23% target discount to the common stock.

• factorGS Factor Profile

  Growth, Financial Returns, Multiple, Integrated

  GS Factor Profile assesses stocks relative to the market and industry peers using growth, financial returns, valuation multiple, and an integrated score.

• industry_read_acrossKioxia read-across

  Peer guidance read-across

  Kioxia's NAND ASP, bit shipment, revenue, and operating margin guidance are used to infer the potential upside to Samsung Electronics and SK Hynix NAND business forecasts.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• SK Hynix Inc. (000660.KS)

  A Korean memory supplier and one of the main beneficiaries of the Kioxia read-across

  Strengths

  NAND ASP and OPM may be above current forecasts; may also benefit in sentiment from a potential Kioxia ADR listing through its consortium stake.

  Weaknesses

  The current target price is close to or slightly below the latest OCR-identified closing price, so the precise upside depends on price recognition in the original text.

  Comparison

  Compared with Kioxia, the three companies had similar OPM in CY1Q26, so Kioxia's CY2Q26 74% OPM guidance can serve as a margin upside reference for Korean companies.

  Risks

  Worsening memory supply-demand balance, delayed technology migration, weaker smartphone/PC/server demand, and lower AI-related capex.

• Samsung Electronics (005930.KS; 005935.KS)

  A Korean memory supplier; the report reiterates a Buy rating

  Strengths

  NAND ASP and OPM may have upside; both the common and preference shares are rated Buy.

  Weaknesses

  The business mix is more complex, and non-memory factors such as smartphone profitability and mobile OLED share also affect valuation.

  Comparison

  Kioxia's strong CY2Q26 ASP and OPM guidance suggests Samsung's current NAND forecast may be conservative.

  Risks

  Worsening memory supply-demand balance, a sharp decline in smartphone margins, loss of mobile OLED market share, and weaker-than-expected progress in HBM.

• Kioxia Holdings (285A.T)

  A Japanese NAND producer and the source company for this read-across

  Strengths

  Strong CY2Q26 revenue and operating margin guidance; remains constructive on tight NAND supply.

  Weaknesses

  Goldman Sachs rates it Neutral, and the report is not primarily a direct upgrade of the Kioxia investment view.

  Comparison

  Its guidance is used to assess the potential upside to SEC/Hynix NAND ASP and OPM.

  Risks

  A reversal in NAND supply-demand balance, ASP increases falling short of expectations, and uncertainty around the ADR listing.

Key data

• Kioxia CY2Q26 USD revenue guidance+70% qoqManagement said bit shipments would increase but have a limited impact, suggesting ASP is the main driver.
• Kioxia CY2Q26 operating margin guidance74%Above Goldman Sachs' current c.60% forecast for Korean companies' NAND OPM.
• Goldman Sachs current SEC NAND ASP forecast+55% qoqThe report sees further upside.
• Goldman Sachs current Hynix NAND ASP forecast+45% qoqThe report sees further upside.
• NAND market bit growth expectationCY2026 high-teens %Kioxia expects CY2027 to remain undersupplied.
• NAND long-term CAGR guidance20%Kioxia maintained its previously stated long-term growth guidance.
• Samsung Electronics common stock target priceW320,000Based on 2026E EV/EBITDA SOTP.
• Samsung Electronics preference share target priceW245,000Based on a 23% target discount to the preference share.
• SK Hynix target priceW1,800,000Based on 2026E/27E average P/B and a 2.9x target P/B.

Impact & implications

If Kioxia's guidance is representative of industry trends, Samsung Electronics and SK Hynix may have room for upward revisions to NAND ASP and margins; continued supply tightness and stronger AI data center demand will support memory pricing and profitability. For SK Hynix, a potential Kioxia ADR listing could also act as a sentiment catalyst.

Risks

• A significant deterioration in memory supply-demand balance.
• Delayed technology migration.
• Weaker-than-expected smartphone, PC, and server demand, dragging on legacy memory demand.
• Samsung's HBM business underperforming expectations, affecting HBM revenue and profit.
• A decline in AI-related capex, pressuring HBM and related memory demand.
• A sharp contraction in Samsung smartphone margins.
• Loss of Samsung's mobile OLED market share.
• Uncertainty around the details and timetable of Kioxia's ADR listing.

What to watch

• Whether Kioxia's actual CY2Q26 ASP, bit shipment, and operating margin meet guidance.
• Whether Samsung Electronics and SK Hynix later raise NAND ASP and OPM guidance.
• Whether NAND supply tightness continues into 2027 and the pace of new industry supply.
• The strength of AI data center and enterprise SSD demand.
• HBM demand and AI capex trends.
• Progress on Kioxia's ADR listing and its impact on investor sentiment toward SK Hynix.