[Noon Salon] Memory Companies' Undervaluation and IR Challenges
Memory semiconductor companies are seen as capable of outperforming the broader memory market, supported by HBM and high-performance products. HBM boosts revenue through its high selling price, and a larger HBM share can increase overall earnings. Prices for server DDR5 also vary considerably by speed, including 7,200 Mbps, so competitiveness in high-performance products can determine results.
Figures were cited showing that about 63% of Micron's revenue and about 68% of TSMC's revenue are related to data centers. The explanation was that data-center demand, HBM, and high-performance memory can offset relatively moderate consumer demand. Another analysis suggested that if ASML and Lam Research results and conference calls confirm equipment-supply constraints, equipment shipments to China may also be limited, potentially improving supply conditions for major memory companies.
One view was that the low price-to-book ratios of Samsung Electronics and SK hynix, despite high earnings, indicate that investors do not yet fully trust the sustainability of profitability. Investor relations (IR), the argument went, should do more than communicate strong results: companies should explain in concrete figures and plans how long earnings can last and how shareholder returns will be delivered. Rather than waiting for investors to react only after results are confirmed, companies need proactive communication to address market doubts.
It was emphasized that AI investment is expanding beyond frontier-model companies and hyperscalers to include neoclouds, businesses, and sovereign AI initiatives at the national level. With bottlenecks still present in data centers and equipment supply, demand may continue to exceed supply rather than disappear in the short term. Memory companies were advised to explain both their strategies for a slowdown in price increases and the share of premium products. The view was also expressed that sharing investment returns and free cash flow with shareholders could help address undervaluation and lead to a reassessment of corporate value.