À̹ÌÁö È®´ë (Updated with conference call comments, additional data)
Samsung Electronics Co.¡¯s spending on wafer facility increased by 36.3 percent on year in the first six months to respond to a new heyday in chips and IT components, although the pace halved from a year ago in a humble gain to its own standards and compared with rigorous expansion by its chip rivals Intel and TSMC.
But the South Korean tech behemoth with $100 billion in cash hoard claims to have a 10-year chip roadmap ready to sustain leadership in cutting-edge technology and plans ¡°meaningful¡± M&As within the next three years to toughen its capacity in AI, 5G and automotive electronics.
¡°We see the need of strategic M&As to respond to fast changing business and paradigm environment,¡± said Ben Suh, executive vice president of the investor relations division, during a conference on earnings report.
¡°We cannot specify the timing of carrying out investments, but we are positive on achieving M&As in meaningful scale within three years,¡± he said. Although the company cannot name specific field, it has eyes on AI, 5G and automotive electronics.
On the handset and wearable field, the company will strengthen premium identity with foldables in the second half.
In regards to worries about its chip competitiveness against fast-moving rivals, the world¡¯s largest chipmaker has moved beyond technology migration as it is now more focused on perfecting yield in next-gen facility to enhance productivity and cost, according to Han Jin-man, senior vice president of Samsung¡¯s memory business unit.
¡°We are maximizing the memory chip supply capacity with full-fledged operation of Payeongtaek S5 line and mass-production of first-gen 5-nano and second-gen 4-nano (wafers),¡± he said separately in the conference call.
¡°The 14-nano based DDR5 series churned out from EUV technology will reduce fabrication process and cost. From next year, we expect to see the improvement in profitability,¡± he said.
On NAND flash, chips of 6 to 7-gen on 176 layers will become the mainstream until 2022, according to a 10-year roadmap. The 8-gen VNAND stacked on 200 or more layers is next in the lineup, he said. The company will be releasing mass-purpose VNAND on 176-layers in the second half.
À̹ÌÁö È®´ë Samsung Electronics on Thursday disclosed it had spent 23.3 trillion won ($20.2 billion) in the first six months of the year, up from 17.1 trillion won in a year-ago period, mostly for upgrades in existing facilities at home and China.
Capital expenditure in the second quarter reached 13.6 trillion won, including 12.5 trillion won on semiconductors and 600 billion won on displays.
It confirmed a consolidated operating profit of 12.57 trillion won in the quarter ended June, gaining 33.93 percent from a quarter ago and 54.26 percent from a year earlier, thanks to recovery in chip demand and normalization of its foundry operation in Austin, Texas. Although best in nearly three years, its performance pared versus the peak of the last super cycle in 2018 when it generated quarterly income from 15 to 17 trillion from operation.
Net profit soared 34.9 percent on quarter and 73.44 percent on year to 9.63 trillion won. Sales fell 2.63 percent from three months ago but rose 20.21 percent higher against a year earlier to a second-quarter best of 63.67 trillion won.
Operating margin, which measures how much a profit a company makes on a dollar of sales, improved to 19.7 percent.
Samsung Electronics shares closed 0.25 percent lower at 79,000 won in Seoul trading on Thursday.
For the first half of 2021, operating profit gained 50.41 percent on year to 21.95 trillion won and sales 19.18 percent to 129.06 trillion won.
Dividends for the second quarter were set at 361 won apiece for both common and preferred shares, one-fourth of its planned annual dividend spending.
À̹ÌÁö È®´ë [Graphics by Song Ji-yoon]
The chip sector delivered 6.93 trillion won in operating profit on sales of 22.74 trillion won, nearly doubled from the levels of downcycle period of the last three years but off the quarterly average of 11 trillion won in the last heyday of 2018.
Shipments exceeded its guidance and chip price increases were faster than expectation. System semiconductor business also saw a profit rise thanks to normalized operation of the Austin plant, the company said in a press release.
DRAM total bit shipments jumped by some-10 percent in the second quarter and are expected to see single-digit growth in the third quarter and mid-20 percent surge for full 2021. NAND flash bit shipments also are estimated to surge 40 percent for full year.
The display panel business posted an operating profit of 1.28 trillion won in the traditional slow season on sales of 6.87 trillion won. The company projected its OLED sales to growth further in the following half with full-fledged expansion to non-smartphone IT and portable gaming products.
The smartphone division reported an operating profit of 3.24 trillion won on sales of 22.67 trillion won, reduced from the last quarter on chip shortage and poorer sales. It sold 60 million units of smartphones and 8 million units of tablets. Average selling price (ASP) of mobile devices reached $233 and is expected to rise more in the third quarter on an increase in smartphone sales, the company said in the conference call.
Consumer electronics business raked operating profit of 1.06 trillion won on sales of 13.4 trillion won.
By Lee Ha-yeon
[¨Ï Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]