Sands Capital Management, LLC - Emerging Markets Growth Composite on Samsung Electronics Co., Ltd.
Thesis
Samsung Electronics is positioned to benefit from the widening shortage across DRAM, NAND and high-bandwidth memory. Pre-booked demand suggests the supply-demand gap could be wider in 2027 than in 2026 even as industry capital spending rises. The company reported very strong sequential memory-price increases, indicating acute tightness across products. Sands believes tight conventional-memory pricing can drive near-term earnings revisions and improve bargaining power for HBM capacity. The shares ended the quarter at less than 10 times forward earnings, leaving room for earnings growth to do more of the work than multiple expansion.
“Samsung also said pre-booked demand points to a wider supply-demand gap in 2027 than in 2026, even as capital spending rises.”
Key risks
- Industry capacity additions could eventually weaken memory pricing
- A slowdown in AI data-center demand could reduce the expected supply-demand imbalance