Samsung's 240 Trillion Investment... Expand the Share of Materials, Parts, and Equipment like Wonik IPS

[Asia Economy Reporter Lee Seon-ae] An investment opinion has been raised that the investment proportion in Samsung Electronics and the 소재·부품·장비 (materials, parts, and equipment) sector should be increased due to Samsung Group's large-scale investment plan.

According to Yuanta Securities on the 16th, Samsung Group plans to newly invest 240 trillion KRW over three years until 2023 in strategic businesses such as semiconductors and bio.

Lee Jae-yoon, a researcher at Yuanta Securities, said, "Out of Samsung Group's 180 trillion KRW investment from 2018 to 2020, about 140 to 150 trillion KRW was executed by Samsung Electronics," and added, "It is expected that more than 90% of the newly announced 240 trillion KRW investment over three years will also be executed by Samsung Electronics."

The researcher emphasized, "This is an event that clarifies Samsung Electronics' semiconductor capex and business direction for the next three years," and "Attention should also be paid to the increased possibility of mergers and acquisitions (M&A) related to 5G, AI, and non-memory."

Yuanta Securities estimated that 120 to 130 trillion KRW will be used for facility investment, 60 to 80 trillion KRW for R&D (research and development), and 20 to 30 trillion KRW for M&A over the three years.

Lee said, "Samsung Electronics is expected to focus investment on EUV DRAM, 3D NAND, and advanced foundry processes to widen the gap with latecomers," and "Since Samsung Electronics' facility investment and business direction have become clear, we view 소재·부품·장비 positively and present Samsung Electronics as the top preferred stock among large semiconductor stocks, maintaining an overweight opinion on 소재·부품·장비 companies such as Wonik IPS, Wonik QnC, and TES."

Meanwhile, Samsung Electronics plans to maintain absolute dominance in the memory market and lay the foundation to leap to the world's number one in the system semiconductor market. First, it will further expand the technology-based cost competitiveness gap through production focused on DRAM below 14nm and NAND with more than 200 layers, and invest in developing innovative next-generation solutions. In the system semiconductor field, it plans to secure competitive innovative products through timely development and bold investment in advanced foundry processes.

In the next-generation communication market, Samsung Electronics plans to lead advanced technology research in 6G based on its 5G leadership. Accordingly, it will focus investment on strengthening software capabilities for network advancement and intelligence, and plans to expand new business areas and product portfolios to grow as a next-generation network leader.

Additionally, it will strengthen R&D capabilities in future new technologies and new businesses such as artificial intelligence and robotics to lead the 4th Industrial Revolution. Through a global AI center, it will secure advanced technologies while expanding intelligent devices applying high-performance AI algorithms. In the robotics field, it plans to promote the 'everyday use of robots' by securing core technologies and diversifying form factors.