Austin without hesitation… Samsung Semiconductor’s performance warning light-Maeil Economy

As the shutdown of Samsung Electronics’ Austin plant in the US prolonged, a warning light was lit on the Samsung Electronics system semiconductor performance in the first quarter of this year.

Concerns are raised that the overall performance of the semiconductor division, as well as the system semiconductor, will fall below expectations as losses from the downtime increase.

According to the semiconductor industry on the 5th, Samsung Electronics’ Austin plant has not been restarted for more than 15 days since it was shut down due to a power outage caused by a record cold wave on the 16th of last month (local time).

It is reported that electricity and water supply have now normalized, unlike water supply that was not smooth due to a circulation cut in the early stage of the shutdown and the aftermath of a freeze in water pipes. Samsung Electronics is undergoing facility restoration work, but due to the nature of the semiconductor process, a detailed inspection is required for each process to restart the plant, which is expected to take a considerable period of time to restart.

An industry insider said, “Before the semiconductor is made, there are hundreds or thousands of processes, and there are hundreds of chemical substances that are put into the production process.” “It will take more time than expected.”

While local media and experts are raising the prospect that the shutdown may continue until the middle of next month, some are predicting that normal operation will not be possible until May. In a recent report, Kim Yang-jae, a researcher at KTB Investment & Securities, said, “It will take 2-3 months to re-produce semiconductors,” and “normal operation is expected to be possible only after May.”

The Austin plant’s sales last year amounted to 3.9 trillion won. It means that it generated sales of 10 billion won a day, and considering this, it is calculated that the loss in sales so far is close to 200 billion won. This is a loss of opportunity, and considering the fact that existing inventory sales are being made, the actual loss is highly likely to decrease than expected.

In the financial investment industry, prolonged plant shutdowns are predicted to lead to a decline in earnings. On the 4th, Hana Financial Investment lowered Samsung Electronics’ system semiconductor operating profit estimate for the first quarter of this year from 190 billion won to 161 billion won, and lowered its overall operating profit estimate for the semiconductor division from 3.7 trillion won to 3.57 trillion won.

Previously, KB Securities estimated the operating profit of Samsung Electronics’ semiconductor division at around 3.5 trillion won in the first quarter. Both estimates are lower than the previous quarter (3.85 trillion won) as well as the same period last year (3.99 trillion won). Kim Dong-won, a researcher at KB Securities, said, “We expect to see a decrease in profits compared to the previous quarter due to the shutdown of the Austin plant.”

Although expectations for the supercycle are growing, semiconductor earnings are expected to improve in earnest from 2Q. Most of the sales of memory semiconductors come from business-to-business transactions, and the price based on business-to-business transactions is fixed. Unlike the bullish spot price, last month’s fixed DRAM transaction price was flat at $3. The semiconductor industry expects that the rise in DRAM spot prices will boost the fixed transaction price from 2Q.

Meanwhile, Samsung Electronics announced a plan to donate $1 million to the US state of Texas, which was damaged by the cold wave. According to the newsroom of Samsung Electronics and the City of Austin on the same day, Samsung Electronics will donate a total of $1 million, including $750,000 to community groups in the central region of Texas and $250,000 to community groups in the north, to support recovery from the cold wave. I did it.

The donation will be used to provide water and food through local food banks, as well as home repairs, health services, and shelter support. “We decided to donate to help residents in need of this cold wave,” said Choi Kyung-sik, vice president of Samsung Electronics’ North America, and “we will support as quickly as possible while cooperating with local partners.”

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