Poor Samsung, falling further and further behind TSMC, and with half the yield of TSMC, can only peel away TSMC clients with huge government subsidized discounts, only to have those clients running back to TSMC, once they realize they have been duped.
Making most of my money with asian tech stocks i have to say a few things:
1. Samsung does not list net profits for subsidiaries. They list operating profits so it's not exactly what most people know as profits.
2. Samsung Semi had 3.4 trillion Kw ( < 3.1 bn USD) operating profit in q2 19.
3. All of Samsung Semi REVENUE minus memory was < 3.5 bn USD. That's Samsung LSI and fabs.
4. If you look at profit and revenue numbers of the past few quarters and multiply with the bit growth and ASP numbers they give during each earnings conference call you will see that Semi minus memory adds very little to their operating profit. Despite the DRAM price drops, memory remains their primary source of income.
Samsung Fabs are tiny compared to TSMC and they make much less revenue. They also spend much less CapEx. One has to question whether they had any profits at all. It is unclear how much they spend on R&D as no press release on this topic lists details to differentiate between Samsung LSI and fabs.
Samsungs fabs have to be seen as a strategic investment, not as source of income.
Good points! I agree that Samsung's fabs are more of a strategic investment than a profit center. Wouldn't be surprised if this Chaebol is also supported by the SK government to prevent the large tech sector there from being overly dependent on supplies from Taiwan, which might get cut off if China becomes more aggressive.
Many are predicting a "slow" death. So its not like we'll hit 3nm like a wall and the foundries will suddenly say "thats it, no more shrinks." Instead, shrinks will just get more incremental, more expensive, and increasingly augmented by other advances, but they'll probably keep trickling out for awhile.
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isofilm - Thursday, October 10, 2019 - link
Poor Samsung, falling further and further behind TSMC, and with half the yield of TSMC, can only peel away TSMC clients with huge government subsidized discounts, only to have those clients running back to TSMC, once they realize they have been duped.lejeczek - Thursday, October 10, 2019 - link
And who is that beneficiary of those gov subsidies? And how to get those? I'd want some too.gdansk - Thursday, October 10, 2019 - link
Samsung Semi $4.3 billion in profit in 2019Q2 despite "low" DRAM prices. Not as glamorous or fast as TSMC but something the industry needs.brakdoo - Friday, October 11, 2019 - link
Making most of my money with asian tech stocks i have to say a few things:1. Samsung does not list net profits for subsidiaries. They list operating profits so it's not exactly what most people know as profits.
2. Samsung Semi had 3.4 trillion Kw ( < 3.1 bn USD) operating profit in q2 19.
3. All of Samsung Semi REVENUE minus memory was < 3.5 bn USD. That's Samsung LSI and fabs.
4. If you look at profit and revenue numbers of the past few quarters and multiply with the bit growth and ASP numbers they give during each earnings conference call you will see that Semi minus memory adds very little to their operating profit. Despite the DRAM price drops, memory remains their primary source of income.
Samsung Fabs are tiny compared to TSMC and they make much less revenue. They also spend much less CapEx. One has to question whether they had any profits at all. It is unclear how much they spend on R&D as no press release on this topic lists details to differentiate between Samsung LSI and fabs.
Samsungs fabs have to be seen as a strategic investment, not as source of income.
eastcoast_pete - Friday, October 11, 2019 - link
Good points! I agree that Samsung's fabs are more of a strategic investment than a profit center. Wouldn't be surprised if this Chaebol is also supported by the SK government to prevent the large tech sector there from being overly dependent on supplies from Taiwan, which might get cut off if China becomes more aggressive.Adonisds - Thursday, October 10, 2019 - link
What’s our current long term horizon of up to what point chip scaling will reach?brucethemoose - Thursday, October 10, 2019 - link
Many are predicting a "slow" death. So its not like we'll hit 3nm like a wall and the foundries will suddenly say "thats it, no more shrinks." Instead, shrinks will just get more incremental, more expensive, and increasingly augmented by other advances, but they'll probably keep trickling out for awhile.vladx - Sunday, October 13, 2019 - link
In the end the solution is still different materials that can provide better performance