According to reports, the company currently has about 200 trillion won in cash or cash equivalents, and Samsung, which is "not short of money", said it would "actively conduct large acquisitions to consolidate its leading position in the company's target business." "

The supply of chips has been in short supply for a long time, and even though the world's giant manufacturers are investing at full capacity to expand production, the price of chips in the main production areas affected by the epidemic remains high. Benefiting from this, the business situation of relevant companies at home and abroad improved significantly in the first half of this year, at the same time, it also led to a considerable increase in the company's stock price and industry fund performance, and there are star fund managers who stick to chip semiconductors to be "elated" again.

But investment must not be blind, as industry insiders say, the supply and demand constraints of each different chip are completely different. Under the overall "chip shortage", some products still have the hidden worry of excess inventory, and the industry also hides the risk of future supply exceeding demand under the global investment boom, and some foreign media have even published a warning: "once the market cools down, the excess capacity accumulated during the boom will put a burden on manufacturers. "

Samsung "cast a wide net", investing nearly 160 trillion won in the past year

On the morning of August 13, 53-year-old Samsung Electronics Vice Chairman Lee Jae-yong was paroled, a few days after Samsung Electronics issued a statement that the company would "invest heavily in companies designated as'of national importance'".

On Tuesday, the company announced again that it would invest 240 trillion won ($205.64 billion) over the next three years to expand its influence in areas such as biopharmaceuticals, artificial intelligence, semiconductors, telecommunications and robotics. The company hopes to consolidate its leading position in chips with the investment while seeking more growth opportunities in new areas such as next-generation telecommunications and robotics.It is worth mentioning that in the budget, 180 trillion won will be invested in South Korea.

Samsung said it would "actively conduct large acquisitions to consolidate its leadership position in its target business." Data show that the company currently has about 200 trillion won in cash or cash equivalents.

As early as August 2018, Samsung announced that it would invest 180 trillion won over the next three years to revitalize the national economy, and stressed that 130 trillion won would be invested domestically. In addition, the company decided to hire more than 40,000 people directly.

Now the "three-year period" has come as promised. The company said that due to increased investment in the semiconductor business, its domestic target of 130 trillion won may exceed the target of at least 7 trillion won, to 137 trillion, and the target of 40, 000 jobs has been achieved by 80%. The overall recruitment target is likely to be achieved this year.

Review Samsung's "big" operations over the past year or so:

In April last year, Samsung Electronics announced its vision of "becoming the world's number one logic chip manufacturer by 2030", investing 133 trillion won to enhance its competitiveness in LSI systems and contract manufacturing.

Last October, Samsung display (Samsung Display Co.) announced plans to invest 13 trillion won to upgrade its LCD manufacturing facility and produce advanced quantum dot display panels by 2025.

In the biological sector, described by South Korean media as "the group's most promising subsidiary," Biologics Co., its CDMO division announced earlier this week that it would spend 1.7 trillion won to build a Moderna Inc COVID-19 vaccine production plant in Incheon Songdao. "Samsung aims to gain 30 per cent of the global market share in CDMO," the company said in a statement.

Global semiconductor industry boomed in the first half of the year

As of press time, nearly 2000 listed companies in Shanghai and Shenzhen have disclosed semi-annual reports. Due to the low base of the epidemic last year and the good situation of resuming production and work this year, the median revenue growth of listed companies is 34.03%. The median net profit increased by 38.09%. The semiconductor industry is relatively more prosperous, with median revenue growth of 57.40% and median net profit of 98.34% of the 50 companies disclosed in the sector, nearly doubling from the same period last year.

As the performance increases, so does the stock price. The share prices of 107 companies increased by an average of 46.9% in the first half of the year, of which Ming Microelectronics rose more than fourfold, while Fuman Electronics, National Technology, Jinchen shares and National Science rose more than 200%.

In terms of funds, semiconductor funds, known as "scum men", have also rebounded collectively, with an average increase of 40.38% in the five semiconductor ETF this year, and led to a 24% increase in more than 500 funds with related industries. Cai Songsong, who is in charge of Noan's growth, is even more shameful, attracting investors to "bend over" with an increase of 50% this year. In the fund's second quarterly report, Cai Songsong continued to express an optimistic view on the future of semiconductors: "the bearing of this round of semiconductor chips is likely to exceed expectations." In addition, with the continuous conquest of domestic related technical products and the acceleration of domestic substitution, the industry is about to enter a dividend period of both total market volume and domestic market share. "

Looking overseas, the second quarter results of the leading enterprises in the international semiconductor industry are basically released. Guohai Securities conducted a performance analysis of 20 US semiconductor core companies: overall, the 20 core enterprises 2021Q2 achieved a total operating income of US $17.949 billion (year-on-year + 24.99%) and a net profit of US $7.733 billion (year-on-year + 49.68%). Guohai Securities believes that some areas of the current industrial chain still have the momentum of price increases, and the prosperity of the industry will continue, giving the industry a "recommended" rating.

Full-scale "chip shortage"? The market needs calm analysis.

It is reported that in order to curb the epidemic of COVID-19, Ho Chi Minh City, the largest city in Vietnam, has increased the intensity of epidemic prevention measures since the 23rd. The existing chip manufacturing enterprises in Vietnam are mainly contract manufacturing and assembly, and many companies in South Korea, Japan and the United States have layout here; in addition, Malaysia, which is known as the "center of semiconductor closed testing" in the world, has also experienced a rebound in the epidemic, with the number of new confirmed cases maintained at about 20,000 for many days in a single day.

In this regard, East Asian Qianhai Securities believes that the current global chip supply in short supply has not been effectively alleviated, and the prosperity of the semiconductor industry is still good.On the supply side, Malaysia and other major semiconductor producers in Southeast Asia have experienced another outbreak, which has brought uncertain impact on the production capacity of automotive chips. Previously, the market expected that automotive chips will be effectively alleviated in the second half of this year. At present, the time to restore the balance between supply and demand of automotive chips may be postponed to the second quarter of next year, and the prosperity of the semiconductor industry is higher than expected. At present, the capacity shortage of wafer factories and closed test plants has the most serious impact on the supply of MOSFET and MCU products, while on the demand side, under the trend of automobile electrification, intelligence and networking, the demand for products such as MOSFET and MCU continues to rise, and the price rise that will rise again at the end of the third quarter is expected to boost the performance of domestic enterprises, and the prosperity of the power and analog chip industry remains high.

Based on this, many investors mistakenly think that the chip industry is suffering from a comprehensive shortage of supply, thinking that the sector has "only gain but no loss" in the long run. Is this really the case?

In fact, in order to alleviate the problem of chronic supply shortage, international chip giants have taken rapid action to increase production, resulting in a substantial increase in inventory. According to statistics, by the end of June, the total inventory of the world's nine leading chipmakers reached an all-time high of 64.7 billion US dollars.

As manufacturers flocked to increase production, some chipmakers began to worry that this could lead to a glut: 4GB DDR's wholesale prices in July, for example, were roughly flat for the second month in a row, while global shipments of smartphones that needed such memory fell significantly from April to June. "the supply of memory may exceed demand in the first half of 2022, causing prices to fall," said Akira Minamikawa, an analyst at technology research firm Omdia. In view of this, the share prices of Samsung Electronics and Micron have fallen sharply recently.

Therefore, Boshi fund manager Huang Jichen said that the downstream of the chip industry is facing a variety of needs in all aspects of life, and each different demand is produced on a different process capacity, so the supply and demand constraints of each different chip are completely different. Neither can we generalize the whole, nor can we ignore the risk of local oversupply.According to the objective interpretation of the relevant remarks and analytical viewpoints, we still have to look at which kind of chip.

According to the Nippon Keizai Shimbun, the chip industry has experienced many major fluctuations in history, and once the market cools, the excess capacity accumulated during the boom puts a burden on manufacturers."the ongoing expansion will be online in two to three years, which means they could end up dragging down the company. "