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Photo = courtesy of Samsung Electronics
Samsung Electronics regained its top spot in global semiconductor market capitalization, overtaking TSMC, a Taiwanese foundry (consigned semiconductor producer). As the semiconductor industry is expected to grow next year, it is analyzed that the growth potential of Samsung Electronics is emerging, which has a “golden portfolio” such as DRAMs, die-cast and communication chips.
According to the investment banking industry (IB) on the 25th, Samsung Electronics’ market capitalization was 524,355.3 billion won (about $ 477.5 billion, thereafter based on the closing price on the 24th) , surpassing TSMC and recovering the number one corporate value in the world. TSMC’s market capitalization listed on the Taiwan Stock Exchange amounted to a total of 1,220 billion Taiwanese dollars (about 518,752.8 billion dollars, 4,701 billion dollars). It has been approximately 5 months since July 17 that Samsung Electronics’ market capitalization has grown more than TSMC.
TSMC also performed well in the second half, with its share price rising 63%, but it is analyzed that the balanced portfolio of Samsung Electronics, an integrated semiconductor (IDM) company, received a higher evaluation in the market. . Samsung Electronics, like TSMC, is also rebounding in memory semiconductor prices amid strong commercial foundry performance. DRAM, Samsung Electronics’ flagship product, is also expected to enter the “supercycle (long-term boom)” starting in the first quarter of next year.
This year, the topography of global semiconductor companies is changing rapidly. Intel fell from third to fifth place ($ 192.9 billion) in the world, and NVIDIA ($ 321.7 billion), a specialist in graphics processing units (GPU), took third place. The Dutch ASML ($ 202.5 billion), a semiconductor equipment maker, also surpassed Intel, taking fourth place.
Samsung Semiconductor ‘Golden Portfolio’ … Drams Drawn, Cast Cast
Foundry wins supplies from Qualcomm and Nvidia and is fully operational until next year
Until the third quarter of this year, TSMC, a Taiwanese foundry company (consigned semiconductor production), was selected as a “leader” in the global semiconductor industry. In May, it was rocked by the U.S. ban on Huawei transactions, but managed to resurface with sweeping orders for Apple’s smartphone application processor (AP). In July, the market capitalization of the world’s semiconductor companies first exceeded 400 trillion won.
Last month, the reversal of Samsung Electronics began. This month, the stock price soared 16.6%, surpassing the 400 trillion won market capitalization at a fierce rate, and outperforming TSMC on the 24th. At the same time, the trading conditions of the memory and the semiconductors of the system improved significantly.
Foundry in ‘Full Operation’
According to the semiconductor industry on the 25th, the growth potential of the ‘Foundry’ business is seen as a decisive opportunity for Samsung Electronics to exceed the market capitalization of 400 trillion won on the 23rd of last month. This year, with the 5nm ultrafine process technology (nanometer, 1nm = one billionth of a meter), Qualcomm’s latest consigned production contract AP’Snapdragon 888 ‘and the processing unit volume were also brought in. Graphics (GPU) from NVIDIA. In terms of market share, the gap between TSMC (55.6% in Q4) and Samsung Electronics (16.4%) is not small, but Samsung Electronics is assessed to be ahead of the sales growth potential.
The outlook for the foundry for next year is more positive. As the fifth generation (5G) mobile communications and artificial intelligence (AI) market grows, orders for 5G and GPU communication chips are emerging from fabless (design specialists without production facilities). Orders are said to be delayed until the end of next year. Foundry sales for next year are expected to increase by more than 20% from this year’s estimate (1.5 trillion won).
DRAM enters ‘long boom’ next year
Recently, Samsung Electronics’ “memory semiconductor” capability has emerged. According to market research firm Trend Force, Samsung Electronics ranks first in the global DRAM and NAND flash markets with a share of 41.3% and 33.1% (as of Q3), respectively.
Until last month, the memory semiconductor industry was not good. The fixed price of the DRAM transaction (based on the PC DRAM product DDR4) fell from $ 3.31 in June to $ 2.85 in November. The impact of reducing orders from back-up data center companies was great.
The atmosphere has changed this month. The DRAM spot price, which serves as a leading indicator of the state of the industry, jumped 24.5% from the end of last month ($ 2.77) to $ 3.45 on this day. There was also the impact of a power outage at Micron’s Taiwan plant, the third-largest in the world, but the industry is putting emphasis on analysis that “reflects next year’s DRAM supercycle.”
The demand for mobile DRAM has recovered. The expansion of 5G smartphone launches is great. Google and Amazon server DRAM purchases have also resumed. Researcher Yangpaeng Kim, a researcher at the Industry Research Institute, analyzed that “the demand for memory semiconductors is increasing due to the influence of AI and 5G”, and that “the global semiconductor industry has entered a cycle upward”.
26% increase in operating profit next year
In addition to semiconductors, there are high expectations for other flagship Samsung Electronics businesses, such as smartphones. This is because new products such as the Galaxy S21 and the mini LED TV will be launched early next year. Samsung Electronics’ earnings next year are expected to continue “very advanced.” According to F & Guide, a provider of financial information, Samsung Electronics ‘sales consensus for the next year (average of securities firms’ forecasts) is 259.6954 billion won and operating profit is 46.2 billion won. 5607 billion won. Sales are 9.2% and operating profit is 26.2% higher than this year. Operating profit is also forecast to exceed 50 trillion won. Semiconductor operating profit is expected to reach 30 trillion won, a 50% increase from this year’s estimate (about 20 trillion won).
However, there are strong prospects that this year’s fourth quarter results, to be released early next month, will fall short of expectations. Operating profit is expected to reach 9.9 trillion won, down 20% from 3Q (12.353.2 billion won). The fall in semiconductor prices from October to November, a decrease in smartphone shipments, and a drop in the won-dollar exchange rate are analyzed to have had a negative impact.
Reporter Hwang Jeong-soo [email protected]
