Samsung Semiconductor Inventory Increases, Hynix Decreases... Turnover Rates All Decline

Samsung Electronics Semiconductor Inventory Assets 33.73 Trillion KRW
SK Hynix Inventory Assets 14.95 Trillion KRW
Inventory Turnover Rate Declines... R&D Proportion Increases

Amid the sluggish semiconductor market, Samsung Electronics' inventory assets this year were found to be at a high level. SK Hynix also has more inventory assets than in the past, but the scale has decreased compared to last year. The inventory turnover ratio declined for both companies.

The ratio of research and development (R&D) expenses to sales increased for both companies. Samsung Electronics partially sold its shares in the Dutch semiconductor equipment company ASML in the third quarter, following the second quarter, as part of increasing investment funds.

On the 15th, Samsung Electronics announced through its quarterly report that as of the end of September, its inventory assets amounted to KRW 55.256 trillion, a 5.9% increase from the end of last year (KRW 52.188 trillion). This is slightly lower than the amount at the end of the first half of this year (KRW 55.508 trillion).

In the DS division, which is responsible for semiconductors, inventory assets increased by 16.1%, from KRW 29.0576 trillion at the end of last year to KRW 33.7307 trillion at the end of the third quarter. This is due to the semiconductor market downturn since last year caused by economic recession and weak demand.

SK Hynix's inventory assets as of the end of September stood at KRW 14.9479 trillion, down 4.6% from the end of last year (KRW 15.6647 trillion). Compared to the end of the first half (KRW 16.4204 trillion), it decreased by about 9%. This appears to reflect the effect of SK Hynix's earlier production cuts compared to Samsung Electronics.

However, the inventory turnover ratio for both companies is in a poor state. Samsung Electronics' ratio fell from 4.1 times at the end of last year to 3.3 times at the end of September, while SK Hynix's ratio dropped from 2.4 times to 2.1 times during the same period.

The inventory turnover ratio is calculated by dividing the cost of goods sold by inventory assets and is used to measure the speed at which inventory assets are sold. A higher turnover ratio means inventory assets are quickly converted into sales.

Samsung Electronics' capital expenditure this year was KRW 36.6997 trillion as of the end of the third quarter. Of this, 91.1% (KRW 33.4408 trillion) was invested in the DS division. SK Hynix's capital expenditure as of the end of September was KRW 4.198 trillion.

As of the end of the third quarter, this year's R&D expenses were KRW 20.7997 trillion for Samsung Electronics and KRW 3.1356 trillion for SK Hynix. Both companies increased their R&D ratio relative to sales. Samsung Electronics' ratio rose from 8.2% for the full year last year to 10.9% as of the end of September, while SK Hynix's ratio increased from 11.0% to 14.6% during the same period.

Meanwhile, Samsung Electronics continued to sell ASML shares in the third quarter following the second quarter. Samsung Electronics stated that the number of ASML shares it held decreased by 0.3%, from 2,750,072 shares at the end of June to 1,580,407 shares at the end of September. The scale of the share sale is estimated to be around KRW 1.3 trillion. This move is interpreted as an effort to secure semiconductor investment funds.

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