Semiconductor Surge: Should You Buy or Sell Samsung Electronics and SK Hynix Now? The Secret of Long-Term Supply Agreements - How High Will Semiconductor Stocks Go?

Summary

Team Leader Oh Hyun-jin of Lucent Investment analyzes the semiconductor sector, focusing on long-term supply agreements (LTA) that could reduce cyclical volatility for Samsung Electronics and SK Hynix. He argues that LTA provides earnings visibility, supports downside, and combined with sustained Big Tech capex, justifies holding these stocks. He advises investors without semiconductor exposure to accumulate Samsung Electronics and SK Hynix on dips, rather than chasing already-expensive equipment and materials stocks.

• Long-term supply agreements (LTA) are becoming a key theme, reducing volatility and providing earnings visibility for memory makers.
• Samsung Electronics and SK Hynix are cheap on a PER basis despite recent rallies, unlike the past cyclical peak concerns.
• Big Tech capex remains high through at least 2027, supporting semiconductor demand.
• The shift to agentic AI increases the importance of CPUs, but memory remains central to all AI workloads.
• Upfront payments (deposits) of 10-20% in LTA could provide additional upside if confirmed.
• Samsung's IDM advantage (memory + foundry + system LSI) offers a differentiated edge vs SK Hynix's HBM focus.
• Semiconductor equipment and materials stocks have already run up, making Samsung and SK Hynix more attractive now.
• Chinese memory makers are improving but face US sanctions, limiting near-term threat.