Storage Price Forecasts Fully Revised Up, Reiterate Buy on Samsung and SK Hynix

Overview

This report is the monthly storage price tracking report released by Goldman Sachs for the Korean technology sector. The core content lies in updating and comparing third-party research firm TrendForce's latest price forecasts for DRAM and NAND flash prices for the second quarter of 2026 (2Q26) with Goldman Sachs internal expectations (GSe). Data shows that TrendForce fully revised up the price growth rate forecasts for all types of storage products, with most category forecasts exceeding Goldman Sachs internal models. Based on this strong pricing trend, Goldman Sachs reiterated its "buy" rating on Samsung Electronics and SK Hynix.

Core views

In the DRAM market, price forecasts across all sub-sectors show an upward revision trend. Regarding PC DRAM, TrendForce increased its 2Q26 price qoq growth forecast from +40-45% to +43-48%, slightly higher than Goldman Sachs' expected +40-43%. April data shows DDR4 8GB and DDR5 8GB prices increased qoq by 40% and 45% respectively, causing the DDR5 premium relative to DDR4 to narrow by 4 percentage points to 8%. Regarding server DRAM, the 2Q26 price qoq growth forecast was revised up from +43-48% to +45-50%, also higher than Goldman Sachs' expected +43-45%. In April, DDR4 64GB module prices surged qoq by 53% to $1,127, while DDR5 64GB modules rose qoq by 44% to $1,223, reducing the DDR5 premium relative to DDR4 from 15% in March to 9%. TrendForce noted these estimates carry upside risk. Mobile DRAM performed most strongly; although 1Q26 LPDDR5X prices had already increased qoq by 58-63%, TrendForecast expects 2Q26 price growth to accelerate to qoq +93-98%, significantly higher than Goldman Sachs' expectation. This mainly stems from suppliers attempting to narrow the price gap between mobile DRAM and other DRAM products, as well as major mobile customers willing to pay higher prices to secure capacity. Regarding NAND flash, 2Q26 eMMC/UFS 256GB contract prices rose approximately 80% qoq, far higher than Goldman Sachs' expectation of +45-55% for overall NAND prices. In the spot market, DDR5 16Gb spot commands a 10% premium over the latest contract price, while DDR4 8Gb spot premiums reach as high as 64%, indicating the spot market tightness far exceeds the contract market.

Analysis framework

This report adopts the typical 'high-frequency data tracking + expectation gap comparison' analysis method. First, 引用 third-party authoritative institution TrendForce's latest monthly price forecast data as an objective proxy variable for industry health; secondly, compare these external forecasts item-by-item with Goldman Sachs internal analyst models (GSe) to identify 'expectation gaps' (i.e., the part where external forecasts exceed internal expectations), thereby verifying whether industry fundamentals are stronger than originally judged by the institution; finally, combine valuation models (P/B, EV/EBITDA, etc.) to maintain or adjust investment ratings on covered targets. This logic of using high-frequency price data to correct mid-term earnings expectations is the core paradigm in cyclical stock research.

Methodology notes

• Industry/Industrial Analysis FrameworkPrice-Volume Decomposition

  In the analysis of the memory chip industry, revenue drivers are split into 'volume (quantity)' and 'average selling price (price)'. In short-term windows with relatively rigid capacity, price fluctuations often dominate performance elasticity.

  The report focuses on tracking changes in contract prices and spot prices of DRAM and NAND, because for capital-intensive storage manufacturers, price increases directly translate to margin expansion, making it the most sensitive indicator for judging cycle inflection points.

• Event Betting and Behavioral FinanceExpectation Gap/Expectation Management

  By comparing third-party institution (TrendForce) forecasts with sell-side internal forecasts (GSe), look for deviations between market consensus and institutional views.

  When external independent data source forecasts continuously exceed sell-side internal models, it usually means industry health may exceed the institution's conservative estimates, constituting strong evidence for maintaining or upgrading ratings, i.e., 'positive expectation gap'.

• Valuation MethodPB valuation

  For highly cyclical industries (such as semiconductor storage), use Price-to-Book (P/B) ratio rather than Price-to-Earnings (P/E) as the main valuation anchor when earnings fluctuate wildly.

  The report uses a target P/B of 2.9x for SK Hynix because during bottom cycles or periods of drastic profit change, net asset value reflects the company's long-term replacement cost and liquidation value better than current earnings.

• Valuation MethodEV/EBITDA valuation

  Enterprise Value multiple method, excluding capital structure and depreciation/amortization impacts, suitable for capital-intensive, high-depreciation manufacturing giants.

  The report uses SOTP (Sum-of-the-Parts) method for Samsung Electronics, where core semiconductor business uses EV/EBITDA valuation to more purely reflect its operating cash flow creation capability, avoiding distortion of net profit by massive depreciation.

Asset mapping & comparison

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

• SK Hynix (000660.KS)

  Beneficiary target, as a global leading DRAM supplier, benefits directly from the comprehensive rise in DRAM prices, especially advantages in HBM and high bandwidth memory fields.

  Strengths

  HBM business progress is smooth, strong technology migration capability, large DRAM price elasticity.

  Comparison

  Compared to Samsung, SK Hynix has higher purity in the DRAM field, and earnings are more sensitive to DRAM price fluctuations.

  Risks

  Memory supply-demand worsening, technical migration delays, AI-related capex reduction affecting HBM demand.

• Samsung Electronics (005930.KS)

  Beneficiary target, global storage leader covering full DRAM and NAND product lines, benefiting from double price rise in both categories.

  Strengths

  Full industry chain layout, leading NAND market share, mobile OLED and foundry businesses provide diversified support.

  Weaknesses

  Business is complex, price volatility impact on overall profit elasticity is slightly lower than pure storage manufacturers.

  Comparison

  Valuation relatively stable, large space for semiconductor business value revaluation under SOTP valuation method.

  Risks

  Memory supply-demand worsening, significant contraction in smartphone profit margins, loss of market share in mobile OLED.

Key data

• PC DRAM 2Q26 Price Forecast+43-48% qoqTrendForce revised forecast up, higher than GS expected +40-43%
• Server DRAM 2Q26 Price Forecast+45-50% qoqTrendForce revised forecast up, higher than GS expected +43-45%
• Mobile DRAM 2Q26 Price Forecast+93-98% qoqSignificantly accelerated, significantly higher than GS expectations
• NAND (eMMC/UFS) 2Q26 Price Forecast+80% qoqHigher than GS overall NAND expectations of +45-55%
• DDR5 vs DDR4 Premium (April)8-9%Significantly narrowed from 15% in March, but absolute prices still rising
• SK Hynix Target Price1,800,000 KRWBased on 2026/27 average P/B 2.9x
• Samsung Electronics Ordinary Share Target Price320,000 KRWBased on SOTP and EV/EBITDA method

Impact & implications

The report believes that the comprehensive unexpected rise in storage prices will directly improve Samsung Electronics and SK Hynix's Q2 revenue and gross margin performance. Especially the strong price increase in mobile DRAM and NAND will help offset some impact from traditional demand weakness. Although the narrowing of DDR5 premium appears unfavorable at first glance, combined with the rapid rise in absolute prices and improved penetration rates, it is overall beneficial for product structure upgrade and opening up profit space. Maintaining the Buy rating means the institution believes the current stock price has not fully reflected the earnings repair potential brought by this round of price increases.

Risks

• Significant deterioration in memory market supply-demand relationship
• Technical migration process delays
• Weak demand in smartphones, PCs, and servers affecting traditional storage demand
• Samsung HBM business progress falls short of expectations, impacting revenue and profit
• Reduction in AI-related capital expenditure affecting overall HBM demand
• Significant contraction in smartphone profit margins
• Loss of market share in mobile OLED

What to watch

• Actual landing situation of 2Q26 DRAM and NAND contract prices
• Trend of DDR5 premium change relative to DDR4
• Purchase volume and price acceptance of mobile DRAM from major mobile customers
• Continuity of HBM demand from AI servers