Semes strong Q1 fares well for rebound in semiconductors investments

SEMES is the largest South Korean semiconductor & display equipment manufacturing company and Samsung Electronics’ subsidiary. Semes performance graph is rebounding to the ‘V’ shape, which also means that Samsung Electronics’ semiconductor investment is resuming.

According to the Q1 2020 report Semes recorded sales of 536.3 billion won and operating profit of 80 billion won. Sales increased 205% YoY. The operating profit index got back from red, as in the first quarter of last year, Semes had a deficit of 31.7 billion won. 

The supply of equipment to Samsung Electronics’ Pyeongtaek semiconductor and Xi’an plants in China seems to have driven the Q1 earnings. Samsung Electronics probably made investments in DRAM and NAND memory production facilities there. It is expected that equipment for the foundry production line expansion will be put into use in the second quarter.

In the first quarter, sales of SEMES semiconductor equipment were responsible for 78.6% of total sales. The revenue generated by supplying equipment to Samsung Electronics’ was at 371.5 billion won. Samsung Xian’s semiconductor factory in China generated sales of 99.1 billion won. Display equipment sales were at 44.8 billion won, accounting for 9.1% of the total. SEMES factory utilization rate was 85% in the semiconductor equipment division and 31% in the display equipment division.

An industry insider said, “SEMES is expected to bring in equipment for Samsung Display’s large Quantum Dot (QD) -Organic Light Emitting Diode (OLED) production line in the second half of the year.”

Semes is the first Korean equipment company who sold heavily to Samsung Electronics and Samsung Display since 2017. However, due to the decline in memory prices, the semiconductor industry reduced investment, leading to a decrease in sales.

A source from the company said – “There are a lot of orders, so we are running the plant full. From now on, there is a mixed prospect that Semes will be able to exceed the annual sales of 2 trillion won again this year. “

RR