Barclays has lifted its valuation anchors on two of the world’s largest memory suppliers, citing a combination of intensifying demand from AI-focused datacentre workloads and a supply trajectory the bank expects to stay constrained through at least end-2027.
In its update, the bank raised the price target for SK Hynix Inc to €2,300 from €1,100, and pushed up its target for Samsung Electronics’ Global Depositary Receipts to $7,300 from $4,250. Both stocks remain rated Overweight under the bank’s coverage.
Barclays attributed the higher targets to upward revisions in its earnings estimates and a multiple re-rating - an adjustment intended to align SK Hynix’s valuation with the multiple the bank applies to U.S. peer Micron Technology (NASDAQ:MU). The repricing follows a refresh of Barclays’ global DRAM model after a trip to China and recent channel checks across Asia.
The refreshed model now assumes global DRAM wafer capacity will expand about 18% year-on-year by the end of 2027, compared with a 14% increase expected by the end of 2026. At the same time, Barclays projects bit growth will accelerate to more than 35% in 2027 from roughly 30% in 2026, with the firm attributing that incremental bit demand almost entirely to datacentre and AI workloads.
"Thus, we project tightness will intensify next year," analyst Simon Coles said. "Datacentre/AI contributes nearly all of the expected demand growth in 2027."
China’s rapid expansion in memory production is identified by Barclays as the principal risk to its tightness thesis. The bank expects Chinese capacity additions of 60,000-70,000 DRAM wafers per month and 50,000-55,000 NAND wafers per month across 2026 and 2027, and it estimates China DRAM bit supply growth will exceed 50% in 2026.
However, Barclays judges that the immediate threat to global market balances is limited because Chinese producers are, for now, prioritising domestic smartphone and PC demand and have not made a significant push into exports. The bank also views the more severe scenario - where global cloud providers begin to deploy China-made DRAM in datacentre workloads - as unlikely for the time being, a caveat attributed to Cles in the bank’s note.
On high-bandwidth memory - a product area where SK Hynix is seen as holding a material lead - Barclays flagged a shift in a Chinese competitor’s timeline. The bank said the leading China DRAM player has pushed high-volume manufacturing for HBM3 out to 2027 from the second half of 2026, with development remaining at sampling and qualification stages.
Within the pair, Coles expressed a preference for SK Hynix because of its greater exposure to HBM. He also noted that a potential U.S. ADR listing for SK Hynix would represent an additional positive catalyst.
Barclays also updated its view on semiconductor capital equipment. The bank now expects China wafer fab equipment (WFE) spending to grow about 10% in 2026 and 15% in 2027. Yet it argues the addressable portion of that spend for Western suppliers will be more constrained because of export controls, estimating growth in that addressable segment of only about 3% in 2026 and 7% in 2027 under Japan and EU control regimes.
The combination of accelerating AI-driven demand and a supply outlook that lags projected bit growth underpins Barclays’ bullish repositioning on these memory names, while the bank continues to flag China capacity growth and the potential for expanded exports as the principal downside risks to its view.