Foundry Industry Boom Continues, Positive for Samsung Electronics

[Asia Economy Reporter Changhwan Lee] The semiconductor foundry (contract manufacturing) industry is experiencing continued strong demand, leading to expectations of significant improvements in the performance of related companies.

According to NH Investment & Securities on the 18th, the foundry industry is currently facing a severe shortage of production capacity compared to demand. It was analyzed that most foundry fabs (factories), especially in Taiwan, are operating at 100% capacity, yet orders continue to pour in.

In particular, from the fourth quarter of this year, some orders previously handled by China's SMIC are expected to shift to Taiwanese companies due to U.S. trade sanctions, intensifying the supply shortage.

The securities firm explained that due to the favorable industry conditions, foundry companies have also eliminated price discounts previously offered to large-volume customers. Furthermore, it stated that fabless companies’ current orders cannot be produced until the second quarter of next year, causing prices of display-related chipsets such as LCD driver ICs to rise by more than 10% in the fourth quarter.

As the foundry industry continues to thrive, the third-quarter performance of the Netherlands-based ASML, which manufactures cutting-edge semiconductor production equipment like EUV (extreme ultraviolet) lithography machines, also exceeded expectations.

ASML’s third-quarter sales reached 3.9 billion euros, and operating profit was 1.2 billion euros, representing increases of 33% and 77% respectively compared to the same period last year. In the third quarter, 14 EUV lithography machines were shipped, a significant increase from 7 units in the previous quarter.

Hyunwoo Do, a researcher at NH Investment & Securities, emphasized, "This situation is expected to continue until the first half of 2021," adding, "The strong foundry industry conditions are also positive for domestic companies such as Samsung Electronics Foundry and DB HiTek."

This content was produced with the assistance of AI translation services.