Investing.com — HSBC is standing by its bullish view on Asian memory chipmakers, arguing that investor concerns over a potential peak in the semiconductor cycle are premature.
Following meetings with more than 30 investors across Asia between July 6 and 10, analysts Ricky Seo and Han Kil Chang said a major worry was “diminishing share price catalysts,” with investors citing a slowdown in memory earnings growth, Meta’s entry into the cloud server market as a possible sign of capital expenditure deceleration, and the impact of aggressive capacity expansion on the supply-demand balance.
Investors also flagged high memory bill-of-material costs, which could push customers toward de-specing products, along with the risk of delayed adoption of new technology and aggressive financing by Chinese competitors building new capacity.
But the analysts pointed out that fresh catalysts are emerging, including anticipated price increases for high-bandwidth memory (HBM) following a rally in commodity DRAM, as well as further average selling price (ASP) gains as HBM4 adoption begins.
They also highlighted growth in SO-CAMM2, a mobile DRAM-based module tied to the expansion of ARM-based CPUs, and additional upside in NAND demand from context memory storage used for AI agents.
The long-term agreements spanning three to five years “should improve earnings visibility over the next 2-3 years and reduce earnings volatility,” which could also support higher valuations, the analysts said.
Improving shareholder returns were cited as another catalyst, with Samsung Electronics guiding toward allocating 50% of free cash flow to shareholder returns during 2024-26.
HSBC compared the current memory cycle to the 1990-95 PC supercycle, arguing agentic AI “should improve office productivity and reshape workflows.” The analysts believe cloud service providers are unlikely to slow capacity expansion as they compete for a fast-growing market, and expect the coming HBM4 transition to accelerate HBM price increases relative to commodity DRAM.
Moreover, they flagged rising interest in (SEMCO), pointing to a strengthening FC-BGA substrate cycle, an accelerating MLCC boom driven by AI server content growth, and progress in newer products such as silicon capacitors and glass substrates.
Among Korean tech names, HSBC said it prefers SK Hynix (), citing its greater exposure to HBM and SO-CAMM2, and estimating the company’s HBM market share is sustainable at 50-55% in the 2027 HBM4 era.
The bank also has a Buy rating on Samsung Electronics (), pointing to HBM4 catch-up potential, foundry recovery, and expected further commodity DRAM price hikes in the second half of 2026.