Samsung SDI Stock: Down But Not Out? Why Q4 2025 is the Key for Investors

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Samsung SDI, Awaiting a Q4 Turnaround: Crisis or Opportunity? Samsung SDI, Awaiting a Q4 Turnaround: Crisis or Opportunity? Samsung SDI, a leader in South Korea's secondary battery industry. With its recent stock performance and earnings announcement causing anxiety for many investors, let's explore together whether this is a moment of crisis or a new opportunity. Why Q2 2025 Earnings Fell Short of Expectations According to the DS Investment & Securities report, Samsung SDI's Q2 2025 performance unfortunately fell short of market expectations (consensus). While revenue was about 3.2 trillion KRW, the operating loss reached 397.9 billion KRW. So, why did this happen? The biggest reason was the slump in the large-to-medium-sized battery division . This was due to delays in electric vehicle (EV) supply to major clients and the increased burden of fixed costs from its joint venture (JV) with Stellantis. Furthermore, tari...

Semiconductor Showdown: Analyzing the Samsung, SK Hynix, and AMD

Samsung's Turnaround and AMD's Sprint: The AI-Led Semiconductor War

Samsung's Turnaround and AMD's Sprint: The AI-Led Semiconductor War

The recent star of the stock market has undoubtedly been semiconductors. The surge of semiconductor companies, especially those powered by the formidable engine of Artificial Intelligence (AI), has been relentless. Meanwhile, Samsung Electronics is heralding a dramatic comeback by unveiling its secret weapon, the 'foundry' business. Who will be the victor in the semiconductor market in the second half of the year? Let's find some clues from Hana Financial Investment's latest report.

AI, The Unstoppable Growth Engine

A common thread runs through the earnings reports of U.S. semiconductor companies: 'AI demand' has been the primary driver of performance. With Big Tech companies racing to increase their AI-related investments, the favorable winds from AI are expected to continue blowing through the second half of the year. This isn't just one company's story; it shows that the entire semiconductor industry paradigm is restructuring around AI.

However, there are variables, namely the 'U.S. tariff issue.' Due to tariff uncertainties, some companies have offered conservative outlooks, leading to stock price adjustments. Nevertheless, the demand related to AI is expected to remain robust, providing a firm anchor amidst market fluctuations.

Samsung Electronics' Grand Return? The Rise of the 'Foundry'

While the KOSPI index has recently faltered, Samsung Electronics' stock rose by 4%, capturing the market's full attention. Behind this surprising surge was good news from its foundry (semiconductor contract manufacturing) division.

Wait, what is a Foundry?

The semiconductor industry is broadly divided into 'Fabless' companies that only design chips, 'Foundry' companies that only manufacture them, and 'Integrated Device Manufacturers (IDM)' that do both. Samsung Electronics is an IDM that also operates a foundry business.

Samsung Electronics successfully secured an order to produce Tesla's 2-nanometer process semiconductors. This is more than just a big contract. Securing a world-class company as a client for its cutting-edge process could be the starting gun for recovering its foundry business's competitiveness, which had been somewhat lagging behind competitors. Following this news, Hana Financial Investment re-evaluated the value of Samsung's foundry division and raised its target price. This is a moment of high anticipation for Samsung's leap forward, now equipped with the new growth wing of foundry in addition to memory semiconductors.

SK Hynix, The HBM Powerhouse Takes a Breather

On the other hand, the stock price of SK Hynix, which had reigned as the undisputed leader in the HBM (High Bandwidth Memory) market, has been somewhat sluggish for the past three weeks. This is interpreted as a counterbalance to the market's attention and capital flowing towards Samsung Electronics. Furthermore, concerns that the unique premium SK Hynix enjoyed might be diluted by intensifying competition in the HBM market seem to be priced in.

However, it's too early to be pessimistic. It is highly likely that these concerns are already reflected in the stock price, and its fundamental value as a major beneficiary of AI demand remains unchanged. Some analysts suggest that this short-term adjustment could be a good buying opportunity.

The Future Market: All Eyes on AMD's Earnings

This week, the market's attention is turning to the earnings announcements of On Semiconductor and AMD. AMD, in particular, has seen its stock price rise significantly over the past month, buoyed by positive feedback on its AI accelerators (semiconductors that speed up AI calculations). Whether AMD can meet the market's high expectations with its results and outlook could cause another wave in the semiconductor market's atmosphere.

How to Approach Semiconductor Investing (3 Investment Strategies)

In the volatile semiconductor market, a wise investment strategy is essential. Based on the report, here are three investment ideas.

1. Ride the Return of the Foundry Leader (Samsung Electronics)

  • Strategy: A long-term investment strategy in Samsung Electronics, which has fired the starting shot for foundry competitiveness recovery with the Tesla deal. The stable trend in the memory semiconductor market, combined with the new growth engine of the foundry business, has the potential to drive stock price appreciation.
  • Potential Risks: The semiconductor industry is sensitive to economic cycles, and a global economic downturn or aggressive investments by competitors could impact profitability. The U.S.-China trade conflict and tariff issues are also ongoing risk factors.

2. Seize the Opportunity in the HBM Leader's Adjustment (SK Hynix)

  • Strategy: Despite short-term stock price sluggishness, its status as the leader in the HBM market, a key component in the AI era, remains unchanged. If you believe in the long-term growth of the AI market, the recent price adjustment could be a good opportunity to increase your position through split purchases.
  • Potential Risks: If competitors close the HBM technology gap faster than expected, SK Hynix's market share and profitability could decline, negatively affecting its stock price.

3. Aim for Stability and Growth with 'MPE' (Diversified Investment in Materials, Parts, and Equipment Companies)

  • Samsung Electronics' expansion of foundry investment will be a major boon for related materials, parts, and equipment (MPE) companies. If the volatility of a single stock is a concern, you can consider a strategy of enjoying the fruits of the semiconductor market's growth stably by diversifying your investment across several promising MPE companies.
  • MPE companies can have higher stock price volatility than large-cap stocks, and their performance can be heavily influenced by changes in the investment plans of large customers like Samsung Electronics.

Disclaimer

This article was written for general informational purposes based on a report from Hana Financial Investment and is not a recommendation to buy or sell any particular stock. All investment decisions and responsibilities lie with the investor, and please be aware that investing carries the risk of principal loss. It is recommended to consult with a professional before making any investment decisions.

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