[K Jump 2021] Samsung Electronics flapping up on digital demand from pandemic… stock price’report price’ marches

[한스경제=김창권 기자, 김형일 기자] While semiconductor prices are expected to rise this year, expectations for the semiconductor supercycle are also growing. In particular, the growth trend of Samsung Electronics, which is leading the foundry (consigned semiconductor production) business in Korea, is remarkable.

According to the industry on the 6th, Taiwanese TSMC and Samsung Electronics, which are the No. 1 and 2nd in the foundry industry, are known to have accumulated orders for a year. Among them, semiconductors produced through 8-inch (203 mm) wafers are mainly used in TVs and home appliances, and prices are also rising as demand increases in recent years.

Prior to this, TSMC, the No. 1 industry in the industry, recently abolished its policy to cut the manufacturing cost of 12-inch (300 mm) wafers by up to 3%, which it has been dealing with major customers. TSMC withdrew its price discount policy for the first time in more than 10 years, when order volume steadily increased, in effect raising the price.

This is due to the rapid increase in demand for digital devices such as smartphones, automobiles, and home appliances in the aftermath of the novel coronavirus infection (Corona 19), while price inflation is occurring as the supply shortage of semiconductors intensifies.

The shortage of foundry suppliers also contributed to the lack of foundry suppliers as Chinese foundry company SMIC was sanctioned by the US Department of Commerce. As a result, Samsung Electronics is also pushing in orders, but production is limited, so this phenomenon is expected to continue for the time being.

The market outlook for semiconductors also supports this. In the data released the previous day by the Ministry of Trade, Industry and Energy and the Semiconductor Association, “the global semiconductor market is expected to increase by about 8-10% compared to last year, and the memory market is expected to increase by about 13-20% this year.”

System Semiconductor also predicted that the global market will grow by about 5.5% due to increased demand for foundry consignment, increased demand for 5G communication chips, high-resolution image sensors, and display driving chips (DDI) due to the revitalization of the non-face-to-face economy and accelerating the spread of 5G.

As for memory, DRAM, which is expected to increase in price, is expected to gradually expand by turning to excess demand from the beginning of this year, and NAND is expected to remain in excess supply and turn into excess demand from 2H.

According to the market research firm Trend Force, the fixed transaction price for server DRAM (DDR 32GB) in December last year was $110, which was similar to that of last month. However, spot prices, a leading indicator of fixed transaction prices, are already on the rise, so DRAM prices are expected to rise slightly within the first quarter of this year.

The government also increased by 12.0% from last year to $73.7 billion to $72.9 billion as exports, led by DRAM, increased by 7.0% to $31.8 billion to $33 billion due to increased demand for 5G communication chips and image sensors for system semiconductors and acquisition of large foundry customers. Expected.

Accordingly, it is predicted that facility investment in the semiconductor sector will rise to the world’s No. 1 again, surpassing China and Taiwan. According to the International Semiconductor Equipment and Materials Association (SEMI), Korea’s semiconductor facility investment this year is $18.9 billion, which is higher than that of China ($16.8 billion) and Taiwan ($15.6 billion).

As market expectations for the semiconductor boom were reflected, Samsung Electronics’ market cap as of the end of December last year increased to $50.1 billion, surpassing TSMC and ranking first in the global semiconductor market cap in five months.

Stockholders’ share price of’Samsung Electronics’ raised in anticipation of semiconductor supercycle

In response to these expectations, stockholders are raising their target price at the same time as Samsung Electronics, the leader of the KOSPI, is also expected to increase its earnings.

In particular, even securities companies that offer a target price of 110,000 won appeared. Hana Financial Investment has adjusted the target price from 86,000 won to 111,000 won. This was cited as the reasons for expectations for greater shareholder return and the impact of the DRAM market turnaround.

Kim Kyung-min, a researcher at Hana Financial Investment, said, “The annual dividend was 9.6 trillion won for the past three years, but there is a high possibility that this will increase in earnest from this year. It is expected that the annual dividend of 20 trillion won will be maintained for several years.”

“In the case of system semiconductors, Samsung Electronics’ market share in the front-end process is expected to increase from around 30% to 35%,” he said. “In memory semiconductors, the entry risk of Chinese companies has been significantly lower than in 2015.”

In addition, eBest Investment & Securities, IBK Investment & Securities, Hi Investment & Securities, and Kiwoom Securities raised their target prices. Accordingly, the Samsung Electronics target price predicted by these securities companies jumped to 96,000 won to 100,000 won.

Young-san Choi, a researcher at Ebest Investment & Securities, said, “We are raising the target price of Samsung Electronics to 100,000 won. We expect DRAM prices to continue to rise until the first half of 2022.”

“This year, based on the reduced inventory and supply, the base effect of smartphones and the demand for inventory restocking of 5G and server CSPs (providers) are the basis.” It is expected that the effect and the effect of promoting new demand will continue.”

Kim Unho, a researcher at IBK Investment & Securities, said, “The fourth quarter of last year is expected to be below our forecast, but expectations are growing.” “We are raising the target price to 97,000 won.”

He said, “In the fourth quarter of last year, Samsung Electronics’ sales and operating profit are expected to decrease 13% and 26.9% QoQ to 58,24 trillion won and 9,27 trillion won, respectively. The scale down is expected to be positive for the price flow.”

However, some are concerned that the current stock market, which surged in the short term, is bubbling. IBK Investment & Securities Research Director Jeong Yong-taek said, “The current stock price level is somewhat burdensome based on the past trend. If you look at the ratio of the KOSPI market capitalization to nominal GDP, which shows the fundamentals of the economy, it deviates from the +2 standard deviation of the long-term trend. The period when the KOSPI exceeded this range was just before the 2000 IT bubble and the 2008 global financial crisis.”

“Of course, it is necessary to take into account the amount of liquidity in the financial market and the structural changes of the market that are not reflected by the nominal GDP,” he said. “Even so, based on fundamentals, the most important variable determining stock price flow, Controversy can lead,” he added.

Meanwhile, according to the Korea Exchange, on that day, Samsung Electronics finished trading at 82,200 won, down 2.03% from the previous trading day. The trend has continued since it exceeded 80,000 won on December 30, the last trading day of last year.

In particular, the net sales of institutions and foreigners on the 4th to 5th were -1.58,000 and -574,000, respectively, but individual investors actively started to buy.