Shares in Samsung Electronics and SK hynix had fallen more than 50% from their June highs by Oct. 16, while contract quotes for two PC memory categories rose, underscoring disagreement about the chip cycle.
The selloff left Samsung trading at 3.0 times consensus earnings for 2027 and 2.8 times the 2028 estimate. SK hynix’s corresponding multiples were 2.7 and 2.3. Both companies’ shares were also priced close to projected book value per share for those years.
SK hynix alone lost 57% from its June high in four months. In a comparison covering more than two decades, its average correction was 51%, and the historical average decline lasted 15 months.
As of Oct. 16, October contract quotes for DDR4 and DDR5 PC DRAM exceeded September’s by more than 15%. Those readings cover the two PC memory categories; they do not show how prices changed across the broader chip market.
The earnings multiples rest on forecasts. Estimates called for a single-digit year-over-year decline in 2028 earnings per share. Sales and operating profit were projected to remain close to their expected 2027 peaks, with earnings still near levels associated with a memory supercycle.
Previous memory downturns brought lower DRAM prices and large operating losses. The latest PC memory quotes present a different pricing picture, though they cannot establish how long the current cycle will last.
AI data centers are central to the memory-demand outlook, including demand for high-bandwidth memory and enterprise solid-state drives. Concerns about slower AI spending and memory-price growth remain part of the debate over future earnings.
An earlier look at memory-chip earnings cited Morgan Stanley’s Oct. 13 warning that low earnings-based valuations can also occur near a cycle peak.
SK hynix’s anticipated fourth-quarter guidance could help assess average selling prices and margins.
