Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Korea Stock Exchange  >  Samsung Electronics Co., Ltd.    A005930   KR7005930003

SAMSUNG ELECTRONICS CO., LTD.

(A005930)
  Report
SummaryChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
SummaryMost relevantAll NewsAnalyst Reco.Other languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Analysis: How idled car factories super-charged a push for U.S. chip subsidies

02/26/2021 | 05:28pm EDT
FILE PHOTO: U.S. President Biden signs an executive order on the economy at the White House in Washington

(Reuters) - When President Joe Biden on Wednesday stood at a lectern holding a microchip and pledged to support $37 billion in federal subsidies for American semiconductor manufacturing, it marked a political breakthrough that happened much more quickly than industry insiders had expected.

For years, chip industry executives and U.S. government officials have been concerned about the slow drift of costly chip factories to Taiwan and Korea. While major American companies such as Qualcomm Inc and Nvidia Corp dominate their fields, they depend on factories abroad to build the chips they design.

As tensions with China heated up last year, U.S. lawmakers authorized manufacturing subsidies as part of an annual military spending bill due to concerns that depending on foreign factories for advanced chips posed national security risks. Yet funding for the subsidies was not guaranteed.

Then came the auto-chip crunch. Ford Motor Co said a lack of chips could slash a fifth of its first-quarter production and General Motors Co cut output across North America.

"It brings home very clearly the message that the semiconductor is really a critical component in a lot of the end products we take for granted," said Mike Rosa, head of strategic and technical marketing for a group within semiconductor manufacturing toolmaker Applied Materials Inc that sells tools to automotive chip factories.

Within weeks, automakers joined chip companies calling for chip factory subsidies, and U.S. Senate Majority Leader Chuck Schumer and President Biden both pledged to fight for funding.

Industry backers now aim to be part of a package of legislation to counter China that Schumer hopes to bring to the Senate floor this spring. Still, all agree it will do little to solve the immediate auto-chip problem.

Headlines about idled car plants resonated with the public that had shrugged off abstract warnings in the past, said Jim Lewis, a senior fellow at the Center for Strategic and International Studies. Lawmakers, already worried that a promised infrastructure bill will not materialize this year, decided to push for quick solution.

"Nobody wants to be seen as soft on China. No one wants to tell the Ford workers in their district, 'Sorry, can't help,'" Lewis said. "It was one of those moments where everything aligned."

The package includes matching funds for state and local chip-plant subsidies, a provision likely to heat up competition among states including Texas and Arizona to host big new chip plants that can cost as much as $20 billion.

The subsidies could benefit a factory in Arizona proposed by Taiwan Semiconductor Manufacturing Co and one in Texas eyed by Samsung Electronics Co Ltd, even though those factories would be geared toward high-end chips for smartphones and laptops, rather than simpler auto chips. And those factories would not come on line until 2023 or 2024, according to plans disclosed by the companies, the world's two largest chip manufacturers.

In the longer term, a raft of U.S. companies are also poised to benefit. Any chipmakers that build factories will source many tools from American companies such as Applied, Lam Research Corp and KLA Corp.

Intel Corp, Micron Technology Inc and GlobalFoundries - which already have U.S. factory networks - will also likely benefit.

Smaller, specialty chip factories also could benefit.

"The recent chip shortage in the automotive industry has highlighted the need to strengthen the microelectronics supply chain in the U.S.," said Thomas Sonderman, chief executive of SkyWater Technology, a Minnesota-based chipmaker that makes automotive and defense chips. "We believe that SkyWater is uniquely positioned due to our differentiated business model and status as a U.S.- owned and U.S.- operated pure play semiconductor contract manufacturer."

Even with subsidies, the U.S. companies still must compete with low-cost Asian vendors over the long run, and the immediate auto chip troubles will probably persist.

Surya Iyer, a vice president at Minnesota-based Polar Semiconductor, which makes chips for automakers, said his factory is booked beyond capacity and has started to speed some orders up while slowing others down, to meet automakers' needs as best it can.

"We are expecting this level of demand to continue at least for the next 12 months, maybe even longer," he said.

(This story has been refiled to add attribution to quote in paragraph 9, add dropped words in paragraphs 10 and 17)

(Reporting by Stephen Nellis and Hyunjoo Jin in San Francisco and Alexandra Alper in Washington. Editing by Jonathan Weber and David Gregorio)

By Stephen Nellis


© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
NVIDIA CORPORATION 0.58% 576 Delayed Quote.10.30%
QUALCOMM, INC. 0.16% 140.57 Delayed Quote.-7.88%
SAMSUNG ELECTRONICS CO., LTD. -1.05% 84700 End-of-day quote.4.57%
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED -0.49% 610 End-of-day quote.15.09%
All news about SAMSUNG ELECTRONICS CO., LTD.
04/09White House convening summit with top execs on chip shortage
RE
04/09SAMSUNG - INTRODUCING THE NEW GALAXY : The Smart Way To Find Lost Items
AQ
04/09White House to Push Infrastructure Plan in Summit Meeting on Chip Shortage
DJ
04/09MARKET CHATTER : Samsung Electronics Unveils Galaxy A Series in the US
MT
04/09MARKET CHATTER : Samsung Heavy Wins Certificates for Wind Turbine Installation V..
MT
04/09S.Korea stocks fall on surging COVID-19 cases, weak U.S. data
RE
04/08SAMSUNG ELECTRONICS  : EYELIKE Fundus Camera Repurposes Galaxy Smartphones To Im..
AQ
04/08INTRODUCING THE NEW GALAXY SMARTTAG+ : The Smart Way To Find Lost Items
PU
04/08EUROPE SHOULD INVEST IN CHIP DESIGN, : think tank
RE
04/08SYNOPSYS  : and Samsung Foundry Collaboration Delivers High-Performance Physical..
AQ
More news
Financials
Sales 2021 265 928 B 237 B 237 B
Net income 2021 35 785 B 31,9 B 31,9 B
Net cash 2021 99 221 B 88,5 B 88,5 B
P/E ratio 2021 15,3x
Yield 2021 1,72%
Capitalization 560 790 B 501 B 500 B
EV / Sales 2021 1,74x
EV / Sales 2022 1,49x
Nbr of Employees -
Free-Float 82,9%
Chart SAMSUNG ELECTRONICS CO., LTD.
Duration : Period :
Samsung Electronics Co., Ltd. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends SAMSUNG ELECTRONICS CO., LTD.
Short TermMid-TermLong Term
TrendsBullishBullishBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 37
Average target price 106 594,59 KRW
Last Close Price 83 600,00 KRW
Spread / Highest target 55,5%
Spread / Average Target 27,5%
Spread / Lowest Target -10,3%
EPS Revisions
Managers and Directors
NameTitle
Hyun-Suk Kim Co-President, Co-CEO & Director
Dongjin Koh Co-President, Co-CEO & Director
Kinam Kim President, Co-CEO & Director
Tae Moon Roh Co-President & Head-Research & Development
Hee-Chan Roh Chief Financial Officer
Sector and Competitors
1st jan.Capitalization (M$)
SAMSUNG ELECTRONICS CO., LTD.4.57%500 531
MERRY ELECTRONICS CO., LTD.-8.87%982
HTC CORPORATION2.44%907
ZEPP HEALTH CORPORATION-7.93%676
JNTC CO., LTD.-13.04%509
UNIDEVICE AG-2.46%43