Samsung Electronics is projected to surpass 100 trillion won in operating profit for the first time in the third quarter of this year, leading to anticipated direct and indirect benefits for domestic companies. The semiconductor materials, parts, and equipment (known as 'semiconductor materials and parts') sector is expected to be the primary beneficiary, as Samsung creates large-scale clusters in Pyeongtaek, Yongin, and Honam, boosting the construction industry as well.
However, to prevent excessive profit outflow from the Samsung Group, there is speculation that the company may accelerate its entry into new businesses such as private LNG power generation.
According to industry sources on the 27th, Samsung Electronics is expected to increase its capital expenditures (CAPEX) based on the substantial operating profits it has achieved in the first three quarters, benefiting the entire domestic semiconductor supply chain.
The semiconductor materials and parts industry is anticipated to gain the most direct benefits. Samsung is likely to place additional orders to expand production of next-generation high-bandwidth memory (HBM), graphics memory (GDDR), general-purpose memory (DDR), and mobile memory (LPDDR).
In particular, as Samsung focuses on mass production of HBM4 (6th generation) aimed at NVIDIA's next-generation AI chip, related backend equipment companies like Semes are positioned to benefit directly.
Additionally, as production of general-purpose products expands, the demand for consumable parts and materials, such as semiconductor test sockets, chip inspection components, and etching and cleaning solutions, is expected to increase significantly for domestic mid-sized companies.
Samsung Electro-Mechanics, a key affiliate, has entered a supercycle thanks to strong performances from both Samsung Electronics and NVIDIA. According to KB Securities, Samsung Electro-Mechanics is projected to report third-quarter revenues and operating profits of 3.83 trillion won and 660.1 billion won, respectively, marking increases of 33% and 154% year-on-year. This figure is about 40% higher than previous forecasts.
This growth is attributed to the surge in demand for AI chips and servers, leading to full operation of Samsung Electro-Mechanics' next-generation flagship products, including multilayer ceramic capacitors (MLCC) and flip-chip ball grid arrays (FC-BGA).
As Samsung accelerates the expansion of its P4 and P5 factories in Pyeongtaek and the development of the Yongin and Honam clusters, the performance of Samsung's three EPC (engineering, procurement, and construction) affiliates—Samsung C&T, Samsung E&A, and Samsung Heavy Industries—is also expected to improve. With these three EPC firms starting construction on fab expansions, the revenues and operating profits of their second- and third-tier suppliers are likely to increase, further stimulating the local construction industry.
With Samsung Electronics achieving record operating profits, there is an expectation that the group will expedite its entry into the private LNG power generation sector to prevent profit outflow. While Samsung has structured its business portfolio to ensure its affiliates benefit from semiconductor profits through vertical integration, its energy affiliates have been lacking, necessitating reliance on other large conglomerates like Hanwha, GS, and LS for essential private LNG power supply to support the large semiconductor clusters.
Currently, the Pyeongtaek fab, Samsung's main facility, receives some of its power from LNG power plants operated by other conglomerates. This contrasts with competitor SK Hynix, which shares the results of its semiconductor business with its energy affiliates, SK Innovation E&S and SK Gas, through its private LNG power plants.
As a result, industry insiders predict that Samsung's entry into the private LNG power generation business will materialize in the second half of this year, centered around the three EPC firms. The future Yongin and Honam clusters are envisioned to receive auxiliary and emergency power from their own LNG power plants instead of relying on external private LNG facilities. The Samsung Energy Task Force is expected to determine the leading operator and whether to establish a jointly funded subsidiary by the three EPC firms or pursue a competitive approach among them.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.