Delivered unit price rises from Top 10 places, higher delivery unit price 'good news'
25% increase in sales compared to last year
More than half also improved operating profit
Small and medium-sized
It was found that the average sales of the top 10 Korean fabless companies in the first half of this year increased by more than 25% compared to last year due to the influence of the unit price increase due to the shortage of semiconductor supply. In addition, more than half of them improved their operating profit. In particular, the performance improvement of display driver chips (DDI) and automotive semiconductor fabless was remarkable, which have severe supply difficulties. The biggest impact was the increase in demand from industries such as TVs and automobiles, which had been stagnant after the COVID-19 pandemic. However, small and medium-sized fabless companies that are not on the top 10 could not get out of the deficit, and the polarization of fabless industry continued to appear.
As a result of analyzing the sales and operating profit of the top 10 semiconductor fabless companies in Korea on the 19th, sales of 9 out of 10 companies increased compared to last year.
LX Semicon, a DDI fabless company, recorded the highest sales growth rate, up 98% from the same period last year. The highest sales growth was followed by IA (64%), a fabless semiconductor for automobiles, image processing semiconductor fabless company, NCNC (47%), and memory semiconductor fabless company, Jeju Semiconductor (25%).
Six of the top 10 companies also improved their operating profit. LX Semicon also showed the most notable increase in operating profit, up 633% from the first half of the previous year. Jeju Semiconductor was second with 62%. The loss of the automotive semiconductor fabless Telechips decreased significantly, and Alpha Holdings, a design house, also reduced their losses. Memory fabless, Fidelix, and Display T-con fabless company, Anapass, succeeded in turning into surplus.
The earnings improvement of these fabless companies was mainly driven by increased demand for semiconductors. As the economy recovered from last year's slump due to the COVID-19 pandemic, the supply of automobiles and home appliances greatly expanded, and consequently demand for semiconductors also surged. Foundry production that produces semiconductor chips could not meet the supply, causing a supply shortage. This led to an increase in the unit price of semiconductor supply, which was evaluated to have contributed to the improvement of result of fabless business.
An executive at a fabless company said, “The unit price of semiconductor chip delivery has risen following the price hike in foundry. The finished product (set) companies are demanding prompt semiconductors deliveries even at high prices, because the supply of semiconductors has become scarce.”
These factors also contributed to the significant improvement in fabless performance of displays and automotive semiconductors, which were severely undersupplied. The securities industry analyzed that the sales price increased due to insufficient supply of organic light emitting diode (OLED) DDI, and the margin of LX Semicon expanded. Anapass seems to have succeeded in turning surplus business by maximizing profitability with increasing the proportion of OLED T-con business.
In the case of automotive semiconductors, sales appear to have increased significantly as the automobile industry recovering from stagnant market after the COVID-19 pandemic.
An official from Telechips said, “Last year’s performance was poor due to the small number of orders for semiconductors for vehicles, but as the automobile market economy recovered, the amount of semiconductor orders also surged. We are still looking forward to get more orders for second half of the year to make better performance in our sales”
However, it was found that small and medium-sized fabless companies, which do not have large sales volumes, still have not escaped the swamp of losses. Sales of fabless companies outside the top 10, such as Dongwoon Anatech, AD Chips, and I&C, rose slightly, but continued to show a loss.
An official from the fabless industry added, “Fabless is greatly affected by sales performance because of its large operating cost. If the increase in sales is not large, it is difficult to improve the operating profit.”
[Comparison of first half performance of top 10 Korean fabless companies] (Unit: KRW million)
(Source = Financial Supervisory Service, gathered by industry)
By Staff Reporter Dongjun Kwon (djkwon@etnews.com)