Samsung Electronics (005930.KS): More Than Memory

Morgan Stanley's report argues Samsung Electronics is "More Than Memory." AI is seen maintaining the entire memory complex with tighter supply conditions for 2027-28; LTAs lock in 60-70% of capacity with higher HBM price resets ahead. The investor debate shifts to the supply/capex response and the capital-return framework. The report highlights a sustainable foundry turnaround backed by leading-edge project wins, an opportunity for the mobile business to drive share and transform into software and AI applications, and HBM potentially becoming the biggest profitability swing in 2027. Samsung maintains its 50% three-year FCF return policy, with W90-110tr capital returns in 2026 and the remaining W60-80tr likely allocated to buybacks/cancellations. Currency headwinds cut the 2026 EPS estimate by 5%; the residual income-based price target stays at W381,000, implying 38% upside and 2.2x 2027e P/B. Samsung remains the preferred play within memory, rated Overweight.