Semiconductor earnings expected to improve in the fourth quarter… Samsung Electronics to hit 300 trillion won in sales next year

Samsung Electronics headquarters in Seocho-dong, Seoul. News 1

Korea’s leading semiconductor companies, such as Samsung Electronics, are raising expectations for earnings growth this year and continued robust performance next year. These companies, which have secured solid ammunition due to the impact of non-face-to-face spreads due to the continued Corona 19 this year, are expected to grow further next year thanks to a recovery in demand due to ‘with Corona (step-by-step recovery)’. In particular, the boom in Samsung Electronics’ semiconductor business in 2022 is expected to serve as a lever for the company to open the era of 300 trillion won in total sales for the first time ever.

According to related industries on the 26th, Samsung Electronics is expected to achieve good results in the fourth quarter, which is usually considered an off-season. Generally, the fourth quarter is considered an off-season when each manufacturing company cuts semiconductor orders to reduce inventories and prices fall.

However, the decline in the price of memory semiconductor DRAM, which is Samsung Electronics’ main business, in this quarter was not as big as expected, and the supply and demand remained relatively solid, raising expectations for earnings expansion. As a result, most brokerage firms are forecasting Samsung Electronics’ 4Q operating profit forecast for the semiconductor division to be in the high 9 trillion range. This is not much different from the operating profit of 10 trillion won in the third quarter.

The outlook for next year is also positive. First of all, the outlook for the overall global semiconductor market for next year is bright. According to the Korea Development Bank on the same day, the size of the global semiconductor market in 2022 is estimated to increase by 8.9% from this year to $644.3 billion. In addition, although risks such as supply chain instability exist in the domestic semiconductor industry, exports are expected to increase by 10% compared to the previous year thanks to the slow growth of the global market due to the With Corona virus. The Korea Development Bank (KDB) explained, “In the next year, memory and non-memory growth are expected due to the expected gradual recovery of DRAM prices, the resumption of investment by large data center companies, increased foundry sales, and DDR replacement demand.”

Thanks to these benefits, Samsung Electronics is expected to open an era of 300 trillion won in total sales for the first time in its history. So far, Mirae Asset Securities and Shinhan Financial Investment have predicted Samsung Electronics’ 2022 sales to be 304 trillion won and 302 trillion won, respectively.

photo = Yonhap News

In the non-volatile memory NAND flash market, where competition among global companies is fierce, SK hynix’s growth is outstanding. Samsung Electronics (34.5%) is the unrivaled leader in the global NAND flash market share. Next, five companies compete, including Japan’s Kioxia (19.5%), SK Hynix (13.6%), US Western Digital (13.0%), Micron (9.9%), and Intel (5.9%). Among them, SK Hynix’s share rose to 13.6% for four consecutive quarters from 11.3% in the third quarter of last year. This is the largest share of SK Hynix ever recorded on a quarterly basis.

In the consumer electronics sector, LG Electronics is going through a ‘4 quarter turning point’. This is because, depending on the fourth quarter results, it will be decided whether or not LG Electronics will surpass Whirlpool in the US to become the world’s number one in sales for the first time this year. The cumulative sales of LG Electronics home appliances up to the third quarter are more than 2 trillion won ahead of Whirlpool.

However, LG Electronics was ahead of Whirlpool until the third quarter of last year, but was caught in the last quarter. This is because Whirlpool, the main market in the United States, significantly increased sales through large-scale year-end distribution events such as Black Friday and Christmas.

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