South Korean display equipment companies saw their earnings jump in the first half of 2020 thanks to demand from China. This contrast to last year when they saw new orders nosedive, which hurt earnings.
Thirty one companies combined posted 5.318 trillion won in sales in the first half of the year, a rise of 29.6% from a year prior, according to data collected by TheElec. They posted 583.1 billion won in operating profits in the first half of the year, a rise of 111.2% from the same time period in 2019.
CSOT of China was their biggest customer __ the company signed a total of 14 contracts with South Korean display makers from January 1 to June 30. Combined, the contracts are worth 381.8 billion won.
China’s BOE also signed six contracts with local display makers, which in total was worth 303.8 billion won.
Its compatriot HKC signed two contracts which combined were worth 44.6 billion won. Tianma also signed two contracts together worth 25.7 billion won. Visionox signed one contract worth 12.6 billion won.
In total, Chinese display makers ordered 768.5 billion won worth of goods from South Korean display equipment makers.
South Korean display maker Samsung Display also ordered 138.1 billion won worth of goods in 14 contracts from local equipment vendors. The number of contract equals that of CSOT, but is only a third in monetary value.
LG Display also ordered 76.2 billion won worth of equipment in four contracts.
Meanwhile. Semes, South Korea’s largest semiconductor and display equipment maker, posted 1.1724 trillion won in sales in the first half of 2020. Its operating profit stood at 199.5 billion won. However, display equipment accounted for only 5.2% of the sales, which stood at 60.4 billion won.
SFA posted 786.3 billion won in sales in the first half of the year, a rise of 17.7% year over year. Operating profit rose 2.9% to 91.8 billion won.
Top Engineering posted 518.5 billion won in sales, a drop of 22.4% from a year prior. It posted an operating loss. It did, however, clinch a 15.9 billion won deal with CSOT and 39.4 billion won with HKC.
Wonik IPS posted operating profits of 65.7 billion won and sales of 485.2 billion won in the first half of 2020, a rise of 61.8% and 46.5%, respectively, from a year ago.
AP Systems saw operating profits of 16.7 billion won and sales of 249.5 billion won, a rise of 19.3% and 7.6%, respectively, from a year prior. The company signed an 84.7 billion won deal with CSOT and 149.3 billion won deal with BOE. It won the most order from China among the 31 companies.
A total of seven companies out of the 31 returned to profit in the first half of 2020 __ Semes, ICD, Philoptics, HB Technology, DeviceENG, Youngwoo DSP and FNS Tech. However, Top Engineering, Jusung Engineering and YAS turn to the red.
South Korean display equipment maker will likely look to China for their earnings in the second half of 2020 as Samsung Display and LG Display are looking to exit or reduce their Liquid Crystal Display (LCD) production. The two South Korean display makers will also not likely expand their current organic light emitting diode (OLED) production line in the short-term.