Societe Generale SA has switched its Asia chip stock preference to South Korea over Taiwan, saying the likes of Samsung Electronics Co. are better geared to profit from the end of the semiconductor downcycle.

Memory chip prices are stabilizing after an 18-month downtrend, and Korea’s “earnings gap with Taiwan tech is closing,” SocGen strategists including Frank Benzimra wrote in a note. “This should lead to higher relative re-rating of Korea tech, which is trading at less than half Taiwan tech valuations.”

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SocGen Prefers Korean Chipmakers Over Taiwan’s as Cycle Turns