The top three fab equipment manufacturers in South Korea are expected to post record earnings in 2021 from record spending in the global semiconductor and display industries.
Semes, a subsidiary of Samsung Electronics, recorded its highest ever sales in 2020. Its previous record was 2.03 trillion won in 2017, but its sales in 2020 will be 100 billion won to 200 billion won higher than this, a person with direct knowledge of the matter said.
The company is aiming to record even higher sales in 2021, the person said. It was preparing for a surge in orders this year, they said.
Wonik IPS, which merged with heat processing affiliate Wonik Tera Semicon in 2018, recorded sales of 1.09 trillion won last year, a jump of 63% from 2019. Its operating income surged 241% to 140.5 billion won in the same time period.
South Korean analysts are forecasting the company to record sales of up to 1.2 trillion won to 1.3 trillion won in 2021, 10% to 20% higher than in 2020.
The two companies are benefiting from the increased spending in fab equipment in the industry. Last year, Samsung Electronics expanded its second factory in Xi’an, China and second factory at Pyeongtaek, South Korea. It is planning to spend more in these facilities this year.
SK Hynix, though it won’t spend as much as Samsung due to the cost of its acquisition of Intel’s NAND unit, is expected to continue its investments into its new fab M16.
Spending in the display industry, which has slowed in recent years, is also expected to recover beginning this year.
SFA, which has different customers to Semes and Wonik IPS, is also expected to post strong earnings this year. Last year, the company posted sales in the mid-800 billion won range.
It is expecting high demand for equipment used in display and battery production. It is also expecting to supply overhead transport (OHT) units for semiconductor production automation.
SFA will likely post sales close to 1 trillion won this year, as it has 600 billion won of remaining orders as of December and it will likely win more orders in the first half of 2021.
Global fab equipment makers are also expecting record spending in the sector this year.
Last month, Applied Materials CEO Gary Dickerson said at the company’s conference call for its fiscal first quarter that investments into semiconductors recovered in 2020 and this momentum is expected to continue throughout 2021. Applied Materials CFO Dan Durn, also at the conference, said the overall industry consensus points to investments of around US$70 billion but the company’s view was a bit higher than that.