Goldman Sachs: Kioxia Earnings Show NAND Supply-Demand Tightness Extending to 2027, Maintains Buy on Samsung and SK Hynix
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Kioxia's latest quarterly results show NAND flash ASPs up 20%-25% quarter on quarter and capacity sold out through 2027. Goldman Sachs maintains Buy ratings on Samsung Electronics and SK Hynix, arguing supply tightness persists at least into 2027 with further price upside.
What do Kioxia's headline numbers actually say?
In calendar Q3 2026, Kioxia's dollar-denominated blended ASP rose 20%-25% QoQ; like-for-like product prices jumped 30%-35%.
Bit shipments grew 10%-15% QoQ, driven mainly by data-center and enterprise demand.
This means → NAND isn't riding price alone — both volume and price are rising, confirming genuine demand pull.
The Q4 guidance looks soft — is this a peak signal?
Kioxia guides for only modest QoQ revenue growth in calendar Q4, with bit shipments roughly flat and ASPs rising gently.
The reason is not weakening demand: data-center and enterprise SSDs carry longer lead times, and some shipments have slipped into calendar Q1 2027.
Goldman notes that Q4 guidance trails its forecasts for Samsung and SK Hynix, but attributes the gap mainly to shipment-timing differences and Kioxia's relatively high Q3 base.
In plain terms = the product isn't selling less — delivery dates just shifted later. Orders are queuing into next year, not disappearing.
Can prices keep rising in 2027?
Kioxia's management explicitly stated that NAND supply-demand will remain tight in 2027, with further ASP upside.
Management also acknowledged that after steep increases from early to mid-2026, the pace of gains will slow — but there are currently no signs of ASP decline.
Goldman forecasts 2027 NAND prices up 34% YoY (Samsung basis) and 30% (SK Hynix basis), well below the 279%/254% surge in 2026 but still solidly positive.
This means → pricing is shifting from "explosive rally" to "steady grind higher." The cycle has not turned.
Long-term agreements already stretch to 2029-2030 — what does that signal?
Kioxia disclosed that 2027 capacity is fully sold out and over 50% of 2028 shipments are locked in via multi-year LTAs (long-term supply agreements).
For the remaining 2028 capacity, the company is weighing whether to lock in more customer commitments or hold back to capture potential upside.
Critically, Kioxia has begun discussing 2029-2030 supply arrangements with customers.
This reflects a fundamental shift: customers now view the NAND shortage not as a short-term squeeze but as a multi-year structural deficit — willing to lock supply three to four years out signals deep doubt that supply will recover soon.
What is Goldman's view on Samsung and SK Hynix?
Samsung Electronics: 12-month target price of ₩500,000 for common shares and ₩380,000 for preferred shares (24% discount), based on a sum-of-the-parts EV/EBITDA valuation averaging 2026-2027. Rating: Buy.
SK Hynix: target price of ₩3,500,000, implying a 7.0x target P/E on a 2026-2027 average-earnings basis. Rating: Buy.
Goldman observes that Samsung and SK Hynix face the same trend: customers are pushing for five-year LTAs and seeking even longer supply guarantees.
Where are the key risks?
Samsung's downside risks: a sharp deterioration in memory supply-demand, smartphone-margin compression, and loss of mobile OLED market share.
SK Hynix's downside risks: supply-demand deterioration and technology-migration delays, weak smartphone/PC/server demand, Samsung making positive progress in HBM (high-bandwidth memory — high-speed stacked memory designed for AI chips), and a decline in AI-related capital spending.
In plain terms = the biggest risk for both names is the same — if data-center demand fails to hold at current intensity, the pricing window created by supply tightness closes early.
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