Samsung Electronics Foundry Contribution High
Semiconductor Equipment Stocks Also Expected to Benefit from Spillover Effect
[Asia Economy Reporter Minji Lee] Since Taiwan's TSMC, the world's No.1 foundry (semiconductor contract manufacturing) company, announced a large-scale facility investment, there has been a busy search for companies in the domestic stock market that could benefit.
According to the Korea Exchange on the 18th, as of 1:43 PM, Hanmi Semiconductor was trading at 19,800 KRW, up 5.04% from the previous trading day. The news that TSMC plans to set its facility investment this year at $25 billion to $28 billion (approximately 27 trillion to 31 trillion KRW), exceeding market expectations (up to $20 billion), to respond to increased demand, has influenced the stock price with expectations that its customers, post-processing (OSAT) companies, could benefit. The US global post-processing company Amkor Technology (AMKR) also surged about 7% on the 14th following TSMC's investment news.
Yoon Hyuk-jin, a researcher at SK Securities, said, "Demand for non-memory semiconductors is increasing, but supply is limited. TSMC's expansion inevitably leads to expansion by post-processing companies, and Hanmi Semiconductor, which has major Taiwanese post-processing companies as customers, is expected to benefit."
In the securities industry, since there are only a few companies closely related to TSMC domestically, it is expected that benefits will not broadly expand across the industry. However, considering the growth of the foundry market, investors' interest in semiconductor equipment companies may further increase. Since Samsung Electronics is closely chasing TSMC in the foundry market, the scale of investment in the non-memory business (foundry) could change accordingly.
According to Samsung Securities, Samsung Electronics is expected to spend about 28.9 trillion KRW on semiconductor investment, similar to last year (19.5 trillion KRW for memory and 8.5 trillion KRW for foundry). Initially, the market predicted semiconductor investments could exceed 43 trillion KRW this year, but only the investment plan for the first half has been confirmed, and most investments have not been finalized, lowering expectations for the investment scale.
However, since TSMC's large-scale investment is expected to lead to aggressive investments across the industry, there is also a forecast that Samsung Electronics may review existing investment plans and increase the investment scale. Hwang Min-sung, a researcher at Samsung Securities, explained, "Samsung Electronics has not yet finalized investments that could impact 2022, so the possibility of additional investments remains."
Accordingly, there are opinions emphasizing the need to focus on the trickle-down effect on semiconductor equipment companies with high contributions from Samsung Foundry. Researcher Hwang Min-sung analyzed, "The aggressive investment direction of the foundry industry will raise expectations for the semiconductor equipment market. Wonik IPS has a relatively high contribution from Samsung Electronics' foundry, and related stocks such as Eugene Technology and Simmtech are also beneficiaries of Samsung Electronics' investment expansion."
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