Samsung Electronics Nears Floor Value as Analysts Cut Price Targets

Samsung Electronics Poised for Profit Surge, US Government Stake a Possibility

Seoul, South Korea – August 21, 2025 – Samsung Electronics is projected to experience a substantial increase in profitability in the latter half of 2025, according to a recent report by KB Securities. The financial institution has maintained a ‘buying’ recommendation for the tech giant, setting a target price of 90,000 won per share.

Profitability driven by Key Sectors

The anticipated growth is attributed to a confluence of factors, primarily improvements in the performance of Samsung’s semiconductor, mobile, and display divisions. Analysts forecast an operating profit of 18 trillion won for the second half of the year, marking a 14.8% year-over-year increase. This would represent the strongest performance sence the second half of 2021, when profits reached 29.6 trillion won.

The outlook for quarterly performance remains positive, with projections indicating continued advancement throughout the third and fourth quarters. While the third quarter is estimated at 8.8 trillion won – a slight 4% decrease compared to the same period last year – the fourth quarter is expected to see a significant rebound to 9.2 trillion won, representing a 42% increase.

strategic Alignment with US Government Policy

According to reports from Reuters, the United States Department of Commerce is contemplating taking equity stakes in prominent semiconductor manufacturers, including Samsung Electronics, TSMC, Micron, and Intel, as part of the Semiconductor Support Act. This move aims to bolster American leadership in the critical technology sector and establish a competitive edge against China.

The possibility of US government investment in Samsung is viewed positively by analysts, perhaps mitigating political risks like tariffs and fostering stronger collaboration. Such a partnership could also streamline Samsung’s access to subsidies offered under the Chips Act and open doors to new customer opportunities.

HBM business and Foundry Expansion

Samsung is also positioned to benefit from advancements in High Bandwidth Memory (HBM) technology, with successful sample tests for HBM4 potentially securing future contracts with NVIDIA. This comes as demand for HBM,crucial for Artificial Intelligence and high-performance computing,is expected to surge in consumer markets by 2026.

Moreover, Samsung’s foundry business, which has faced deficits for the last three years, is poised for a turnaround. A new order from Tesla valued at 23 trillion won, combined with a new order for Apple iPhone image sensors, are expected to drive significant revenue growth.

Quarter	Estimated Operating Profit (Trillion Won)	Year-over-Year Change
Q2 2025	4.7	–
Q3 2025	8.8	-4%
Q4 2025	9.2	+42%

Kim Dong-won, a researcher at KB Securities, highlighted the potential for further expansion at Samsung’s taylor, Texas plant. He noted that the current facility occupies only 22% of the 1.47 million pyeong site, indicating ample room for future investment, particularly if the company secures partnerships with major North american tech firms like Tesla, apple, NVIDIA, and Qualcomm.

Did You know? The Semiconductor Support Act, signed into law in 2022, allocates billions of dollars in subsidies to encourage domestic semiconductor manufacturing in the United States.

Pro Tip: Investing in companies involved in the semiconductor industry, like Samsung, can be a strategic move given the growing global demand for chips.

Will the US government ultimately take a stake in Samsung Electronics? And how will increased competition in the HBM market impact Samsung’s long-term growth?

Understanding the Semiconductor Landscape

The global semiconductor industry is a cornerstone of modern technology, powering everything from smartphones and computers to automobiles and medical devices. Demand for semiconductors has surged in recent years,driven by factors such as the growth of 5G,Artificial Intelligence,and the internet of Things. The industry has also become a focal point of geopolitical competition, with governments worldwide recognizing the strategic importance of securing domestic semiconductor supply chains.

Foundries, like Samsung’s, play a critical role in this ecosystem, manufacturing chips designed by companies like Apple and NVIDIA. The ability to produce cutting-edge chips is essential for maintaining a competitive edge in the technology sector.

Frequently Asked Questions about Samsung Electronics

Frequently Asked Questions

• What is driving Samsung Electronics’ projected profit increase? Improvements in the company’s semiconductor,mobile,and display divisions are the primary drivers,along with new contracts from Tesla and Apple.
• What is the US government’s role in Samsung’s future? The US Department of Commerce is considering taking an equity stake in Samsung as part of the Semiconductor Support Act.
• What is HBM and why is it critically important? HBM (High Bandwidth Memory) is a type of memory that offers significantly faster data transfer rates than traditional memory, making it crucial for AI and high-performance computing.
• How is Samsung addressing challenges in its foundry business? New orders from tesla and Apple for image sensors are expected to drive growth and lead to a turnaround in the foundry business.
• What does the future hold for Samsung’s Texas plant? The Taylor, Texas plant has significant expansion potential, with only a portion of the land currently utilized. Securing partnerships with major tech companies could drive further investment.

Share your thoughts on Samsung’s future and the role of government investment in the tech industry in the comments below!

What potential risks could prevent samsung stock from reaching analyst-predicted floor values?

Recent Analyst Downgrades & price Target Revisions

Over the past month,a meaningful trend has emerged within the financial analyst community regarding Samsung Electronics (005930.KS): a series of downward revisions to price targets. Major investment banks, including Goldman Sachs, Morgan Stanley, and JP Morgan, have all lowered their outlooks for the South Korean tech giant, citing a confluence of factors impacting its core businesses. These revisions are fueling speculation that Samsung stock may be approaching a floor value, presenting a potential, albeit risky, entry point for long-term investors.

HereS a breakdown of recent key downgrades (as of August 21, 2025):

Goldman Sachs: Reduced target price from KRW 85,000 to KRW 72,000, maintaining a ‘Neutral’ rating. Concerns center around slowing memory chip demand and increased competition in the smartphone market.

Morgan Stanley: lowered target price from KRW 80,000 to KRW 68,000,downgrading from ‘Overweight’ to ‘Equal Weight’. cited weakening global economic conditions and potential impacts on consumer spending.

JP Morgan: Cut target price from KRW 78,000 to KRW 70,000, reiterating a ‘Neutral’ stance. Focuses on the impact of rising interest rates on consumer electronics purchases.

Key Factors Driving the Downward Revisions

Several interconnected factors are contributing to the negative sentiment surrounding Samsung Electronics. Understanding these is crucial for investors considering a position in the stock.

1. Semiconductor Market Downturn

The semiconductor industry is currently experiencing a cyclical downturn. After a period of unprecedented demand during the pandemic,fueled by remote work and increased digitalization,demand for memory chips – a core component of Samsung’s business – has cooled substantially. This oversupply has led to falling prices, directly impacting Samsung’s profitability. Specifically, DRAM prices and NAND flash memory prices have seen substantial declines.

2. Intensifying Smartphone Competition

The smartphone market remains fiercely competitive. While Samsung maintains a leading position globally, it faces increasing pressure from Chinese manufacturers like Xiaomi, Oppo, and vivo, notably in emerging markets. These competitors are offering comparable features at lower price points, eroding Samsung’s market share. The premium smartphone segment, dominated by Apple (AAPL), also presents a constant challenge.

3. Macroeconomic Headwinds

Global economic uncertainty, including rising inflation, increasing interest rates, and geopolitical tensions, is impacting consumer spending. Demand for discretionary items like smartphones and consumer electronics is particularly sensitive to these macroeconomic factors.A potential recession in key markets like the US and Europe could further exacerbate these challenges.

4. Impact of US Chip Act & Geopolitical Risks

The US CHIPS Act, while intended to bolster domestic semiconductor production, also introduces complexities for global players like Samsung. Compliance requirements and potential restrictions on technology transfer could impact Samsung’s long-term competitiveness. Furthermore, ongoing geopolitical tensions, particularly surrounding Taiwan – a major semiconductor manufacturing hub – pose a significant risk to the entire industry.

Samsung’s response & Strategic initiatives

Despite these challenges, Samsung is actively taking steps to mitigate the risks and position itself for future growth.

investment in Advanced Technologies: Samsung is heavily investing in next-generation technologies, including Extreme Ultraviolet (EUV) lithography for chip manufacturing, and 6G mobile communication technology.

Diversification of business Portfolio: beyond semiconductors and smartphones, Samsung is expanding its presence in areas like artificial intelligence (AI), robotics, and biopharmaceuticals.

Cost Optimization Measures: The company is implementing cost-cutting measures across its various divisions to improve profitability. This includes streamlining operations and reducing capital expenditures.

Focus on Premium Products: Samsung continues to emphasize its premium product offerings, such as the Galaxy S series and Foldable phones, to maintain higher margins.

Is Now the Time to Buy Samsung Stock? – A Value Investing Outlook

Determining whether Samsung Electronics is currently undervalued requires a careful assessment of its intrinsic value. While the recent price target cuts are concerning, several factors suggest the stock might potentially be approaching a floor.

Strong Balance Sheet: Samsung boasts a robust balance sheet with significant cash reserves, providing it with financial versatility to weather the current downturn.

Leading Technology Position: Despite the competition, Samsung remains a technological leader in several key areas, including memory chips, display technology, and smartphone innovation.

Long-Term Growth Potential: The company’s investments in emerging technologies like AI and 6G position it for long-term growth.

Dividend Yield: Samsung offers a relatively attractive dividend yield, providing investors with a potential source of income.

However, potential investors should also be aware of the risks:

continued Semiconductor Downturn: The semiconductor market could remain weak for longer than anticipated.

Intensified Competition: Competition in the smartphone market is likely to intensify.

Macroeconomic Uncertainty: Global economic conditions could deteriorate further.

Real-World Example: Samsung’s Response to Previous Downturns

Samsung has navigated similar downturns in the past. During the 2008-200