Samsung Electronics: wafers and chips are undersupplied
We expect KRW strength and a decline in smartphone shipments to set 4Q17 revenue at KRW67.2tn, 2.5% lower than our estimate. Operating profit, at KRW15.5tn, should also miss our forecast by 7.3%, due to: 1) special bonus payments at the DS division; 2) a stronger KRW; and 3) escalated marketing costs for smartphones and TV sets.
Increasingly tighter DRAM supply, which is so severe that major data centers are demanding a one- year contract for server DRAM. Furthermore, even though wafer manufacturers such as ShinEtus, SUMCO, and Siltronic are moving to up their respective wafer capacities, the lead time is almost 15 to 18 months. The resulting wafer supply shortage makes it difficult to increase semiconductor capacity as much as desired, with the exception of tier-one chipmakers or foundry companies. In all, we believe chip supply will remain tight throughout 2019.
Samsung Electronics is engaged in the manufacture and sale of electronic goods, communication products, semiconductors, telecommunication equipment, home appliances and other similar products. Co.'s products are mobile phones, MP3 Players, DVD players, video equipment, including Blu-Ray, TVs and VCRs; household appliances, including microwave ovens, refrigerators, home air conditioners, washing machines, ultrasonic humidifiers, dehumidifiers, vacuum cleaners and other small electrical goods; audio equipment, including semiconductors, information systems, and computers; miscellaneous parts; other products, including automatic vending machines, refrigerated display cases and electric tools.
Hyundai Motor Investment & Securities is the investment banking arm of the Hyundai Motor Group. The company offers stock brokerage and advisory services; derivative products brokerage and advisory services; wrap account portfolio management services; and VIP wealth management and tax planning, institutional equities, derivatives, and futures brokerage services, as well as sells investment and institutional products. It also provides equity offering, ABS, real estate PF and real estate PF securitization, offshore SOC, structured financing, asset securitization, real estate sales, IPO advisory, and private equity fund and fund management services; and CMA/RP portfolio management and fixed income based investments, as well as involved in the issuance, management, and brokerage of OTC derivatives. In addition, the company offers research services, including macro economic forecasts and stock market outlook, industry overviews and forecasts, fixed income strategies, corporate credit analysis, and valuation analysis. Further, it offers a range of retirement and pension services for individuals and corporate members; portfolios and asset allocation consulting and marketing services; proposing retirement pension plans; contract and payment management services; pension plan advisory and actuarial services; and system development and implementation services, as well as operates call centers for retirement pension services, etc.
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