Samsung Electronics seems to have surrendered to Taiwan’s TSMC, the world’s largest semiconductor sales leader (comprehensive)
‘Foundry No. 1’ TSMC 3Q sales 27 trillion won… Samsung is estimated to be around 24-25 trillion won
Samsung seeks a way out of foundry amid sluggish memory market… TSMC’s roadmap to lead the way
(Seoul = Yonhap News) Reporter Ki-hoon Kim and A-ram Kim = As the ‘semiconductor winter’ comes to life due to the global economic downturn, Samsung Electronics[005930]We are working hard to come up with measures to overcome the severe cold.
Samsung Electronics, which specializes in memory semiconductors, experienced an ‘earning shock’ in the third quarter of this year in the followingmath of a sharp slump in the memory industry.
According to the semiconductor industry and stockbrokers on the 9th, it is estimated that Samsung Electronics gave the world’s top semiconductor sales to Taiwan’s TSMC, the undisputed leader in the ‘foundry’ (semiconductor consignment production) sector.
Samsung Electronics plans to actively nurture the foundry and focus on developing next-generation technologies to overcome the crisis it is facing.
◇ Performance ‘jagged’ according to the memory industry
On the 7th, Samsung Electronics announced its interim results for the third quarter. Operating profit stood at 10.8 trillion won, a whopping 31.73% from the same period last year, and a 23.4% decrease from the previous quarter.
Although earnings by business division were not disclosed, semiconductors, which were the mainstay of earnings, were unable to keep pace with the contraction in demand.
Securities analysts estimated the operating profit of Samsung Electronics’ semiconductor (DS) division in the third quarter to be around 6 trillion won.
Compared to the DS division’s operating profit of 9.9 trillion won in the second quarter, this is a sharp drop of more than 30%.
In particular, the stock market estimated the operating profit of the memory division to be around 5.5 trillion won in the third quarter. This means that more than 90% of the semiconductor division’s operating profit depended on memory.
Memory semiconductors are a strong source of Samsung Electronics’ earnings, but their dependence is so high that if the market conditions deteriorate, their earnings will inevitably deteriorate as well.
In fact, Samsung Electronics achieved the ‘triple crown’ by renewing the maximum in three indicators of annual sales, operating profit, and net profit for two consecutive years from 2017 to 2018, during the memory boom period. Profits were also cut in half compared to the previous year.
In particular, it is estimated that Samsung Electronics gave up the world’s No. 1 spot in semiconductor sales to Taiwan’s TSMC, the No. 1 foundry company in the third quarter.
TSMC’s third-quarter sales were recorded at NT$613 billion (regarding 27.3 trillion won), up 48% from the same period last year.
Samsung Electronics’ DS division’s sales in the third quarter, which are estimated by securities firms, are in the range of 24 trillion to 25 trillion won, which is lower than that of TSMC.
Samsung Electronics surpassed Intel to become the world’s No. 1 in semiconductor sales thanks to the boom in memory semiconductors last year, but it was in danger of being reversed by TSMC due to a sharp deterioration in the industry.
◇ Foundry demand is solid… Robust growth despite recession
In this situation, Samsung Electronics chose the foundry as a breakthrough.
Previously, Samsung Electronics announced that it would intensively foster the foundry business through the announcement of ‘System Semiconductor Vision 2030’ in 2019. ) started mass production.
Although it is far short of TSMC in market share, it is also operating a roadmap to get ahead of TSMC in terms of technology.
At the ‘Samsung Foundry Forum 2022’ held in Silicon Valley, California on the 3rd of this month (local time), Samsung Electronics announced a roadmap to introduce 2nm process in 2025 and 1.4nm process in 2027.
TSMC is also known to have started developing a 1.4-nm process, but Samsung Electronics is the first to announce a specific roadmap for mass production.
In addition, despite the followingmath of the global economic downturn, the foundry is evaluated to be in relatively strong demand.
In fact, the foundry of Samsung Electronics is also growing.
Samsung Electronics also expressed confidence in its quarterly earnings announcement, saying, “We have achieved the highest quarterly performance.”
The high-tech process yield is on track and continues to grow remarkably.
In the third quarter, it is said that Samsung Electronics’ foundry made good progress as demand for the front end process was good and the exchange rate was positive.
According to market research firm Omdia, the global foundry market is expected to grow at a CAGR of 13.4% from $98.6 billion this year to $145.6 billion in 2025.
◇ Maintaining the memory gap… Technological competitiveness through bold investment
Samsung Electronics plans to maintain its market leadership in the memory sector with its super-gap technology.
At the ‘Samsung Tech Day’ event held in the United States on the 5th (local time) of this month, Samsung Electronics announced plans to mass-produce 5th generation 10-nano-class DRAM next year and mass-produce 9th-generation V-NAND in 2024.
In particular, Jin-man Han, vice president of Samsung Electronics’ memory business division, said at this meeting, “There is no discussion regarding the memory production cut at this time.”
While competitors such as Micron have decided to reduce facility investment and cut production, Vice President Han’s remarks are interpreted as a will to overcome the crisis head-on.
Despite the economic downturn, demand for semiconductors for digital transformation (DX) will inevitably increase, and the plan is to secure competitiveness through steady investment.
Previously, Samsung Electronics’ DS division president Kye-hyung Kye-hyeon also announced that it would continue to invest regardless of the semiconductor business cycle.
During a media tour of the Pyeongtaek campus on the 7th of last month, President Kyung said, “The semiconductor business is not good.
Then, President Kyung said, “As the economic cycle accelerates, making less investment in a recession may have bad results in a boom.” emphasized.
kihun@yna.co.kr
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