Strong performance of Intel, TSMC advances… Samsung Electronics was good, but it wasn’t profitable
Samsung’s operating margin is the lowest among 3 companies… Will it be ranked in the rise of DRAM prices this year?
(Seoul = Yonhap News) Reporter Mi-sook Seo = Last year’s top three global semiconductor companies, including Intel, Samsung Electronics, and TSMC in Taiwan, were unveiled, and Samsung Electronics’ semiconductor operating profit fell to third place.
Amid global uncertainties, such as the novel coronavirus infection (Corona 19) and the trade dispute between the US and China, Samsung Electronics’ semiconductors were also quite good, but Intel and TSMC made more profits.
◇ Samsung Semiconductor’s sales ranked second after Intel, and operating profit was overtaken by TSMC and ranked third.
According to the financial investment industry on the 24th, Samsung Electronics, which disclosed its tentative results on the 8th of this month, is estimated to have a total of 73 trillion won in annual sales and 19 trillion won in operating profit for the semiconductor division last year.
Although we need to see the final results to be released on the 28th of this month, it is an improvement from 2019 (sales of 64.99 trillion won and operating profit of 14 trillion won).
This is the result of the untouched (non-face-to-face) demand, such as telecommuting, remote classes, and video conferencing due to the Corona 19 overall last year.
However, Intel and TSMC, which compete with Samsung Electronics in the global semiconductor market, have higher profits than Samsung.
Intel, which released its results on the 21st (U.S. local time), posted annual sales of about 77.8 billion dollars and operating profit of about 23.7 billion dollars last year.
For convenience, when applying the current KRW-dollar exchange rate, it is approximately 86.1 trillion won and 26.2 trillion won, the highest among global semiconductor companies in both sales and operating profit. This is 13 trillion won in sales and 7 trillion won in operating profit than Samsung Electronics. Last year, Intel recorded all-time high sales.
Intel, whose flagship is the central processing unit (CPU), recorded a record-breaking sales, as the demand for laptops and PCs increased by 33% due to Corona even though sales in the enterprise data center division decreased by 16% compared to the previous year.
TSMC, a Taiwanese foundry (semiconductor consignment production) company, which revealed its final results on the 14th, last year saw sales of KRW 1.3,393 billion (about KRW 52.99 billion) and operating profit of KRW 5665 billion (about 22 trillion KRW). KRW 400 trillion).
Sales are 20 trillion won or more lower than Samsung Electronics’ semiconductors, but operating profit is about 3 trillion won.
Last year, thanks to the strong performance of Intel and TSMC, Samsung Electronics was pushed to the second place in sales and third in operating profit among global semiconductor companies.
In 2017-2018, during the memory semiconductor super boom, Samsung ranked first in both sales and operating profit, but except then, most of the sales and operating profits remained second only to Intel.
However, with the rapid growth of the global foundry market from 2019, TSMC, which has advanced technology and capital, is striking up.
TSMC produced similar operating profits to Samsung Electronics (14 trillion won), which had been somewhat sluggish after the super boom in 2019, and widened the gap by surpassing Samsung Electronics’ profits last year.
Even considering that Samsung Electronics’ earnings were somewhat unfavorable due to the strong won-dollar exchange rate in the fourth quarter of last year, TSMC made more profits.
◇ Samsung Electronics’ operating margin is the lowest among the three companies… Will it be possible to rebound with’Super Cycle’?
The biggest gap among these’top 3’is the operating margin.
TSMC, which runs only foundries, posted an operating margin of 42.3% last year. In the second half of last year, despite the loss of a large customer named Huawei of China due to US sanctions, it made more than 40% of operating profit due to the shortage of foundry supply.
In 2017-2019, the company’s operating margin was 37.2-39.4%.
By comparison, the operating margin of Samsung Electronics’ semiconductor division last year is estimated to be around 26% on average. This is lower than that of Intel (30.4%).
Samsung Electronics, an integrated semiconductor company (IDM), has a wide operating margin gap by sector, not only memory semiconductors such as DRAM and NAND flash, but also system semiconductors and foundries such as mobile application processors (AP).
Securities estimates that Samsung Electronics’ DRAM operating margin is high at 40%, but NAND is at around 20% and non-memory division is at around 10%.
In the system semiconductor and foundry sectors, where Samsung Electronics is missing the top spot in the global market, it is not making as much profit as memory semiconductors.
An official in the semiconductor industry said, “Samsung Electronics is a general semiconductor company, but it is a weak point that the profit fluctuations according to the semiconductor business cycle are large as Samsung Electronics is highly dependent on the memory sector, which has relatively large price fluctuations.” It is necessary to disperse the risk by strengthening it.”
However, in line with the semiconductor’s super cycle, which is expected to continue for about two years from this year, there is a possibility that Samsung Electronics will rise again in earnings.
Securities prices expect Samsung Electronics’ semiconductor division sales to reach 80 trillion to 88 trillion won and operating profit to 25 to 27 trillion won due to the rise in DRAM prices this year, and it is expected to increase even higher in 2022.
Although the semiconductor operating profit alone exceeded the level of 2017-2018 when it exceeded 44 trillion won, it is higher than the last two years.
┌───────────────────────────────────┐
│ Samsung Electronics, Intel, TSMC performance trends │
├──────────┬────────┬────────┬────────┤
│Remarks │Samsung Electronics │Intel │TSMC │
│ │(trillion won) │(1 billion US dollars) │ (1 billion Taiwan dollars) │
├——┬——┼————┼———-┼———-┤
│2017 │Sales │74.3 │62.8 │977.5 │
│ ├——┼———-┼———-┼
│ │Operating profit │35.2 │17.9 │385.1 │
├——┼——┼———-┼———-┼——–┤
│2018 │Sales │86.3 │70.8 │1,031.5 │
│ ├——┼———-┼———-┼
│ │Operating profit │44.6 │23.3 │383.7 │
├——┼——┼———-┼———-┼——–┤
│2019 │Sales │64.9 │72.0 │1,069.9 │
│ ├——┼———-┼———-┼
│ │Operating profit │14.0 │22.0 │372.4 │
├——┼——┼———-┼———-┼——–┤
│2020 │Sales │73 *Estimate │77.9 │1,339.3 │
│ ├——┼———-┼———-┼
│ │Operating profit │19 *Estimate │23.7 │566.5 │
├────┴─────┴────────┴────────┴────────┤
│※ Excerpt from the performance report released by each company. Samsung Electronics’ performance in the semiconductor sector and the decimal point │
│Back digit rounding. (Seoul = Yonhap News) │
└────────────────────────────────────┘
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