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Samsung, SK chip operations make up 40.2 pct of all profits by top companies

All Headlines 09:19 October 14, 2018

SEOUL, Oct. 14 (Yonhap) -- The semiconductor business of Samsung Electronics Co. and SK hynix Inc. made up 40.2 percent of all operating profit generated by South Korea's top 100 companies this year, industry data showed Sunday.

Data provided by local businesses and CEO Score, an online corporate productivity evaluation site, showed operating profits of Samsung and SK hynix standing at 23.15 trillion won (US$20.43 billion) and 9.94 trillion won in the first half of 2018. Combined operating profits for all leading companies checked stood at 82.28 trillion won.

Market watchers said that while the two companies already accounted for 15 percent of all operating profits among big companies in 2013, this has been growing steadily to reach 20.4 percent in 2015 and 34.3 percent last year.

The growth comes as Samsung Electronics for the first time surpassed U.S.-based Intel Corp. in terms of sales in 2017, while SK hynix that had remained in fourth and fifth place in the world took the No. 3 slot by outselling Qualcomm Inc. in the one-year period.

The two companies also accounted for 53.9 percent of all operating profits by the world's top 10 semiconductor manufacturers, strengthening their already significant hold on the sector.

On the other hand, some observers here said that the latest numbers confirm South Korea's excessive reliance on semiconductors in its industrial structure and is exposed to possible downturns in demand and prices.

Reflecting this, chip market researcher DRAMeXchange predicted DRAM prices may fall 15-20 percent in 2019 compared with this year, with figures for NAND flash memory likely to drop 25-30 percent in the new year.

CEO Score said that there is no doubt that South Korea enjoys global competitiveness in semiconductors, but because chips make up so much of the local industry and profits, any problems in demand could result in serious side effects for the national economy.

Samsung, SK chip operations make up 40.2 pct of all profits by top companies - 1


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