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‘Profit reflected’ by possible US sanctions on Chinese companies
Smartphone shipments ↑ … Operating profit expected to exceed 11 trillion won
Memory semiconductors, which are heavy in China, are hitting …
As the growth stocks that led the KOSPI recently slowed due to the adjustment in US tech stocks and high valuation loads, large semiconductor and IT-related stocks, led by Samsung Electronics, are calling. attention again.
Samsung Electronics is up about 12% this month, but the industry says: “As there has been a reaction so far, why not until now, it will continue to increase for now.”
Hana’s financial investment analyst Kim Gyeong-min suggested a price target of 86,000 won. This is a figure obtained by applying the share price / earnings ratio (PER) to 10x memory semiconductors, 20x non-memory semiconductors (including Foundry), 20x display, 12x CE, and 17x IM.
‘Profit reflected’ by possible US sanctions on Chinese companies
As the conflict between the United States and China intensified, the United States entered Huawei’s third sanctions. Samsung and SK Hynix were expected to apply themselves to the sanctions stating that “all semiconductor products produced with US equipment can be exported to China only with the permission of the authorities.”
Huawei is one of the top five suppliers to Samsung Electronics and Huawei is known to account for around 11% of SK Hynix’s sales.
However, the reflective benefits are expected to be mentioned soon and will be a long-term boon.
The company that the United States has mentioned as Huawei’s next target is Chinese foundry company SMIC. On the 5th, the US media, including CNBC, reported that “the United States government is considering a plan to include SMIC on the list of restrictions on transactions and sanctions as of the 15th.”
SMIC is the fifth largest foundry in the world and has been responsible for the manufacture of Huawei’s application processors. As the US banned the acquisition of application processor parts from Huawei from Taiwan’s TSMC in May as a second penalty, the importance of SMIC has increased.
However, due to third-party sanctions, SMIC is not only unable to accept orders from Huawei, but is also mentioned as a blacklisted company.
If sanctions are imposed on SMIC, the probability that a US semiconductor company that has been ordering from SMIC will order from TSMC and Samsung Electronics has increased. This is because as the importance of nanoprocess technology increases, the two companies are the only ones to have obtained related technologies.
In particular, the 7-nanoprocess 3D stacking technology applied to memory semiconductors is the only company secured by Samsung Electronics, as TSMC has not yet been successful.
Smartphone shipments ↑ … Total operating profit expected to exceed 11 trillion won
Another positive factor is that the operating profit of the instant messaging division was revised significantly higher among Samsung Electronics’ third-quarter operating profit estimates.
Analyst Kim said that in analysis data on July 31, operating profit was forecast to be 2.7 trillion won, but this time it rose to 4.2 trillion won.
Overall operating profit for the third quarter is also expected to reach 11 trillion won, not the previous forecast of 1.0 trillion won.
This is because the estimated number of smartphone shipments, which is a key indicator of the instant messaging industry, has increased from 74 million to 80 million. Annual smartphone shipments are estimated to be 270 million units in 2020 and 300 million units in 2021.
A Samsung Electronics official said: “There is a possibility that the overall mobile market will rebound in the second half of the year.”
Also, for the operational benefit of each division, it is very likely that a rush order from a Chinese customer for the semiconductor sector and an increase in wafer input due to the expansion of the production line in Xi’an, China, be a blessing.
Memory semiconductors, which weigh heavily in China, are hit hard … offset by non-memory sectors
Since Huawei accounts for a significant part of the sales of Samsung Electronics and SK Hynix, it is inevitable that in the short term, sales will suffer.
The benefits reflected by the US sanctions on Chinese companies are likely to be higher, but that does not mean there is no impact or burden on sales.
Yoo Byeong-hyun, an analyst at Yuanta Securities, expressed concern, saying, “Because the sales segment occupied by the Chinese market was substantial, there may be a negative effect on the memory semiconductor field.”
He explained: “However, in terms of companies as a whole, there are advantages in the fields of communications and equipment, and the losses in the field of memory semiconductors can be compensated.”
Analyst Cho explained: “Since Samsung Electronics is also aware of that, it is actively marketing the non-memory sector.”
A Samsung Electronics official also mentioned: “In the short term, sales will inevitably affect the sector where Huawei was a customer.” He added: “However, I agree with the industry perspective that reflective gains are expected in the sector that competed with Huawei.”
Furthermore, the expansion of factories in China, where Samsung Electronics is actively investing in semiconductors and batteries for electric vehicles, may face an awkward position as the confrontation between the United States and China intensifies. Samsung Electronics is currently closing its old factories in China and replacing them with high-tech manufacturing bases.
A Samsung Electronics official explained: “China-related investment is proceeding on schedule.” did.
Reporter Yang So-hee[email protected]
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