As Samsung Electronics and SK hynix posted solid results and signaled entry into a memory semiconductor "boom period," results in the semiconductor equipment industry are diverging. With Samsung Electronics embarking on massive facility investments starting in the first quarter, corporations that supply equipment to Samsung Electronics continue to post positive results. But SK hynix completed most of its large-scale facility investments in the first half of this year, and new facility investments are planned for next year, leaving equipment makers with a high revenue share from SK hynix looking weak.
According to the Financial Supervisory Service's electronic disclosure system on the 5th, third-quarter operating profit for HANMI Semiconductor and Jusung Engineering came to 67.8 billion won and 33.5 billion won, respectively. Compared with the third quarter of last year, HANMI Semiconductor fell 31.7% and Jusung Engineering fell 93.6%. The two corporations are representative semiconductor equipment suppliers to SK hynix and have a high share of SK hynix in their sales. HANMI Semiconductor supplies the "TC bonder" that stacks DRAM for high bandwidth memory (HBM), and Jusung Engineering supplies deposition equipment that coats desired materials on the wafer surface in thin film form to impart electrical properties.
◇ Despite outlook for a memory "super cycle"… HANMI Semiconductor and Jusung Engineering results down
Samsung Electronics and SK hynix posted sharp year-over-year increases in third-quarter operating profit as demand for memory semiconductors surged with growth in the artificial intelligence (AI) industry. Samsung Electronics reported third-quarter operating profit of 12.17 trillion won, up about 32% from a year earlier, and SK hynix set a new quarterly record with third-quarter operating profit of 11.3834 trillion won. In its third-quarter earnings conference call, SK hynix said, "We judge that the memory market has entered a 'super cycle.'"
The weak results at HANMI Semiconductor and Jusung Engineering are analyzed as stemming from differences in the timing of SK hynix's large-scale orders. SK hynix recently completed construction of the M15x fab (factory) in Cheongju, its HBM production base, and began bringing in equipment. A semiconductor equipment industry official said, "SK hynix appears likely to focus more on transferring and modifying existing facilities than on new equipment, so order volume may be smaller than expected," adding, "Decisions on large-scale new equipment supply will be made in January to February next year."
The prevailing view is that the two corporations' results will rebound in earnest next year. That is because SK hynix is expected to ramp up orders for new equipment in the first half of next year. Cha Yong-ho, an analyst at LS Securities, said, "Although this year's earnings outlook was revised down due to delays in equipment orders for HBM4 (sixth-generation HBM), the TC bonder share at SK hynix is expected to expand from 50% this year to 60% next year, and annual operating profit next year is expected to increase by about 75% from this year to 56.4 billion won." Lee Min-hee, an analyst at BNK Securities, said, "(Jusung Engineering's) order intake is sluggish due to slower-than-expected equipment orders from SK hynix," adding, "New equipment input is expected toward the second half of next year."
◇ SK hynix to place new equipment orders next year… equipment industry seen rebounding in earnest
Corporations with a high share of Samsung Electronics, such as WONIK IPS Co. and Eugene Technology, show a clear improvement in results. According to FnGuide, third-quarter operating profit estimates for WONIK IPS Co. and Eugene Technology are 26.1 billion won and 21.8 billion won, respectively, up 80% and 37% from the same period last year. In the case of Samsung Electronics, to make up for a sluggish HBM business, it began mass orders from the first quarter of this year for equipment that produces DRAM and HBM, among others.
The foundry (contract chip manufacturing) division, which had been quiet on orders, has also secured major clients such as Tesla and has begun placing equipment orders ahead of the start of operations at the Taylor fab in the United States. A semiconductor equipment industry official said, "With expansion at Samsung Electronics' Pyeongtaek 4 plant and the Taylor plant, demand for new equipment is high," adding, "Equipment orders that began in memory semiconductors early in the year are extending to foundry ahead of the Taylor fab's launch in the United States."