Input 2021.02.17 14:59
Impact of increased operating profit and Japanese facility investment
In the middle of last month, Mr. Hong, 31, an office worker, bought 100 shares of Taiwan Semiconductor Manufacturing Company (TSMC), a Taiwanese semiconductor foundry (consignment manufacturing) company. Mr. Kim said, “There are many prospects that a big cycle (great boom) of semiconductors will come, so we invested in TSMC, a leader in the foundry field, and the stock price has risen considerably in one month.” He bought the stock at around $120 per share, but the current TSMC share price is over $140.
It was found that domestic investors concentrated on buying TSMC, the world’s largest foundry company. TSMC is a company with a market share of 54% in the global semiconductor foundry field (based on Trend Force, a market research institute at the end of 2020). In terms of market share, it overwhelms latecomers such as Samsung Electronics (17%), US Global Foundry, and Taiwan UMC (7% each). There is a forecast that the semiconductor industry will improve significantly this year due to demand recovery. Many analysts say that TSMC will benefit most from this increase in semiconductor production.
The reason domestic investors are actively investing in TSMC is that TSMC posted an operating profit of over 22 trillion won last year, and is expected to grow this year due to the booming semiconductor industry. In addition, TSMC’s decision to make bold investments in third countries such as Japan seems to have had an impact.
TSMC posted an operating profit of 5565 billion Taiwan dollars last year (TWD, about 22 trillion 200 billion won), and its operating profit surged 65% from the previous year (337 billion Taiwan dollars). Last year, TSMC’s operating profit was less than that of Intel in the US (23.7 billion dollars, about 26.5 trillion won), Samsung Electronics (005930)The semiconductor division’s operating profit (18.81 trillion won) exceeded significantly.
The reason why TSMC is attracting attention is that the semiconductor industry is expected to be better than last year this year. According to the Ministry of Trade, Industry and Energy and domestic and overseas research institutes, the global economic growth rate (GDP) is expected to grow around 5% this year and the world trade volume is expected to grow by 7.2%, but the semiconductor market growth rate is expected to exceed this. The World Semiconductor Market Statistics Organization (WSTS) predicts that this year’s semiconductor market sales will reach $469.4 billion, an increase of 8.4% from last year.
In particular, automotive semiconductors used in electric vehicles are out of shortage this year, and TSMC is expected to benefit from this situation. TSMC is responsible for about 10% of the world’s automotive semiconductor production, and plans to raise the price of automotive semiconductors by up to 15%.
According to Japan’s Nihon Keizai Shimbun (Nikkei), TSMC is in coordination with the Japanese government to invest 20 billion yen (about 210 billion won) in Tsukuba, near Tokyo, to establish a semiconductor development company. TSMC invested 12 trillion won from last year to build its first overseas plant in Arizona, USA, and expanded its overseas investment area to Japan. The semiconductor industry analyzed that TSMC is trying to increase its dominance in the market by establishing bases in the US, where key customers such as Intel, Apple, and Qualcomm are concentrated, and in Japan, an advanced country in semiconductor materials and equipment.
TSMC’s stock price, which has been net bought by domestic investors for over $200 million, is soaring. TSMC, which closed at $109.04 (closed on December 31) at the New York Stock Exchange (NYSE) at the end of last year, rose to $121.52 on the 29th of last month, up $12.48 (11.4%) for one month, and on the 16th (local time) It was $140.05, up $18.53 (15.2%) from the end of last month in less than a month.
Lee Seung Woo Eugene Investment & Securities (001200)The research center head said, “Now, the semiconductor industry is changing with a structure in which global companies design their own semiconductors specialized for their own services and entrust their production to foundries rather than semiconductors that are made and sold like ready-made products.” And Amazon, Microsoft, and Google will also design their own, so the foundry industry will grow significantly.”
Director Lee added, “Investors’ interest in TSMC, which has overwhelming competitiveness in the foundry field, is closely related to this change in the semiconductor industry.”