Key insights
- Barclays raised price targets for SK Hynix and Samsung Electronics, citing accelerating AI data center demand and persistent memory tightness expected through 2027. The bank increased DRAM capacity growth forecasts but anticipates demand will outpace supply, driven by AI. While China's expanding memory sector poses a risk, its near-term impact on global markets is deemed limited as Chinese producers focus domestically. This positive outlook on memory supply dynamics, particularly for AI-driven demand, could benefit US semiconductor companies like Micron Technology.
Investing.com -- Barclays raised its price targets on SK Hynix Inc (KS:000660) and Samsung Electronics (LON:0593xq) on Tuesday, flagging accelerating memory demand from AI data centers and a supply backdrop that the bank expects to remain tight through at least the end of 2027.
The bank lifted its SK Hynix target to €2,300 from €1,100 and raised its target for Samsung’s Global Depositary Receipts (GDRs) to $7,300 from $4,250. Both stocks remain rated Overweight.
Barclays said the higher targets reflect upward estimate revisions and a multiple re-rating to bring SK Hynix in line with what the bank uses for U.S. peer Micron Technology (NASDAQ:MU).
The upgrades come after Barclays updated its global DRAM model following a trip to China and recent Asia channel checks. The bank now expects global DRAM wafer capacity to grow 18% year-on-year by end-2027, up from 14% by end-2026.
At the same time, Barclays projects that supply will not catch up with demand, where it estimates bit growth will accelerate to more than 35% in 2027 from around 30% in 2026, driven almost entirely by datacentre and AI.
"Thus, we project tightness will intensify next year," analyst Simon Coles said. "Datacentre/AI contributes nearly all of the expected demand growth in 2027."
China’s expanding memory sector was flagged as the key risk to the tightness thesis. Barclays now expects China to add 60-70k wafers per month of DRAM capacity and 50-55k of NAND in 2026 and 2027. It estimates China DRAM bit supply growth will exceed 50% in 2026.
However, it concluded the near-term threat to global market dynamics is limited, as Chinese producers remain focused on domestic smartphone and PC markets and have not yet mounted a meaningful export push. The more serious scenario — global cloud providers adopting China DRAM for datacentre workloads — is seen as unlikely for now, Cles said.
On high-bandwidth memory (HBM), where SK Hynix holds a significant lead, Coles noted that China’s top DRAM player has pushed its HBM3 high-volume manufacturing timeline to 2027 from the second half of 2026, with development still at a sampling and qualification stage.
He prefers SK Hynix within the pair for its higher HBM exposure, and flagged a potential U.S. ADR listing as an additional positive catalyst.
For semiconductor capital equipment, Coles said China WFE is now expected to grow 10% in 2026 and 15% in 2027, though the addressable portion for Western suppliers is more constrained given export controls, with the analyst estimating that segment grows just 3% and 7% respectively under Japan and EU control regimes.
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