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Korea Equipment Makers Survive on China Panel Maker Orders
SFA Engineering is expected to earn operating profit of KRW60.6bn (+23.9% sequentially +32.2% Y/Y) on sales of KRW448.6bn (+7.1% sequentially, +9.7% Y/Y) in 3Q20. Earnings growth should be driven by 1) recognition of sales from Chinese display makers; 2) logistics system sales; and 3) earnings improvement at the subsidiary SFA Semicon.
Their outlook for 2020 is KRW1.74tr (+10.3% Y/Y) and operating profit at KRW219bn (+2.2% Y/Y), based on: 1) recognition of OLED equipment sales mainly from Chinese display makers; and 2) sales of logistics systems and test equipment from secondary battery makers, including SK Innovation. Samsung Display’s resumption of new investments in their 8G QD/OLED TV panel line.
APS Holdings’ paper on fine metal mask (FMM) has been published Journal of Society for Information Display (SID). Company president’ Chiwoo Kim’s explained the material and laser patterning solution to produce FMM for organic light emitting diode (OLED) panel with pixel densities over 800ppi. APS Holdings says its FMM technology can produce currently commercialized FHD sticks as well as make those in the QHD and UHD resolution. The company announced is investing 20 billion won to make new FMM production lines. It is competing with Philoptics, which is opting for an electro forming method over lasers. From: THE ELEC, Korea Electronics Industry Media(http://thelec.net)
Figure 1: APS Hight Pixel Density Figure 24FMM
SFA Engineering is expected to earn operating profit of KRW60.6bn (+23.9% sequentially +32.2% Y/Y) on sales of KRW448.6bn (+7.1% sequentially, +9.7% Y/Y) in 3Q20. Earnings growth should be driven by 1) recognition of sales from Chinese display makers; 2) logistics system sales; and 3) earnings improvement at the subsidiary SFA Semicon.
Their outlook for 2020 is KRW1.74tr (+10.3% Y/Y) and operating profit at KRW219bn (+2.2% Y/Y), based on: 1) recognition of OLED equipment sales mainly from Chinese display makers; and 2) sales of logistics systems and test equipment from secondary battery makers, including SK Innovation. Samsung Display’s resumption of new investments in their 8G QD/OLED TV panel line.
APS Holdings’ paper on fine metal mask (FMM) has been published Journal of Society for Information Display (SID). Company president’ Chiwoo Kim’s explained the material and laser patterning solution to produce FMM for organic light emitting diode (OLED) panel with pixel densities over 800ppi. APS Holdings says its FMM technology can produce currently commercialized FHD sticks as well as make those in the QHD and UHD resolution. The company announced is investing 20 billion won to make new FMM production lines. It is competing with Philoptics, which is opting for an electro forming method over lasers. From: THE ELEC, Korea Electronics Industry Media(http://thelec.net)
Figure 1: APS Hight Pixel Density Figure 24FMM
South Korean display equipment companies saw their earnings jump in the first half of 2020 thanks to demand from China. This contrast to last year when Xthey saw new orders nosedive, which hurt earnings.
Thirty one companies combined posted 5.318 trillion won in sales in the first half of the year, a rise of 29.6% from a year prior, according to data collected by TheElec. They posted 583.1 billion won in operating profits in the first half of the year, a rise of 111.2% from the same time period in 2019.
CSoT of China was their biggest customer the company signed a total of 14 contracts with South Korean display makers from January 1 to June 30. Combined, the contracts are worth 381.8 billion won. China’s BOE also signed six contracts with Korean tool makers, which in total was worth 303.8 billion won. HKC signed two contracts which combined were worth 44.6 billion won. Tianma also signed two contracts together worth 25.7 billion won. Visionox signed one contract worth 12.6 billion won. In total, Chinese display makers ordered 768.5 billion won worth of goods from South Korean display equipment makers. Samsung Display also ordered 138.1 billion won worth of goods in 14 contracts from local equipment vendors. The number of contract equals that of CSoT, but is only a third in monetary value. LG Display also ordered 76.2 billion won worth of equipment in four contracts.
Meanwhile. Semes, South Korea’s largest semiconductor and display equipment maker, posted 1.1724 trillion won in sales in the first half of 2020. Its operating profit stood at 199.5 billion won. However, display equipment accounted for only 5.2% of the sales, which stood at 60.4 billion won. SFA posted 786.3 billion won in sales in the first half of the year, a rise of 17.7% year over year. Operating profit rose 2.9% to 91.8 billion won. Top Engineering posted 518.5 billion won in sales, a drop of 22.4% from a year prior. It posted an operating loss. It did, however, clinch a 15.9 billion won deal with CSOT and 39.4 billion won with HKC. Wonik IPS posted operating profits of 65.7 billion won and sales of 485.2 billion won in the first half of 2020, a rise of 61.8% and 46.5%, respectively, from a year ago. AP Systems saw operating profits of 16.7 billion won and sales of 249.5 billion won, a rise of 19.3% and 7.6%, respectively, from a year prior. The company signed an 84.7 billion won deal with CSoT and 149.3 billion won deal with BOE. It won the most order from China among the 31 companies. A total of seven companies out of the 31 returned to profit in the first half of 2020 __ Semes, ICD, Philoptics, HB Technology, DeviceENG, Youngwoo DSP and FNS Tech. However, Top Engineering, Jusung Engineering and YAS turn to the red.
Table 1: 1H20 Equipment Supplier Financials (US $m)
Thirty one companies combined posted 5.318 trillion won in sales in the first half of the year, a rise of 29.6% from a year prior, according to data collected by TheElec. They posted 583.1 billion won in operating profits in the first half of the year, a rise of 111.2% from the same time period in 2019.
CSoT of China was their biggest customer the company signed a total of 14 contracts with South Korean display makers from January 1 to June 30. Combined, the contracts are worth 381.8 billion won. China’s BOE also signed six contracts with Korean tool makers, which in total was worth 303.8 billion won. HKC signed two contracts which combined were worth 44.6 billion won. Tianma also signed two contracts together worth 25.7 billion won. Visionox signed one contract worth 12.6 billion won. In total, Chinese display makers ordered 768.5 billion won worth of goods from South Korean display equipment makers. Samsung Display also ordered 138.1 billion won worth of goods in 14 contracts from local equipment vendors. The number of contract equals that of CSoT, but is only a third in monetary value. LG Display also ordered 76.2 billion won worth of equipment in four contracts.
Meanwhile. Semes, South Korea’s largest semiconductor and display equipment maker, posted 1.1724 trillion won in sales in the first half of 2020. Its operating profit stood at 199.5 billion won. However, display equipment accounted for only 5.2% of the sales, which stood at 60.4 billion won. SFA posted 786.3 billion won in sales in the first half of the year, a rise of 17.7% year over year. Operating profit rose 2.9% to 91.8 billion won. Top Engineering posted 518.5 billion won in sales, a drop of 22.4% from a year prior. It posted an operating loss. It did, however, clinch a 15.9 billion won deal with CSOT and 39.4 billion won with HKC. Wonik IPS posted operating profits of 65.7 billion won and sales of 485.2 billion won in the first half of 2020, a rise of 61.8% and 46.5%, respectively, from a year ago. AP Systems saw operating profits of 16.7 billion won and sales of 249.5 billion won, a rise of 19.3% and 7.6%, respectively, from a year prior. The company signed an 84.7 billion won deal with CSoT and 149.3 billion won deal with BOE. It won the most order from China among the 31 companies. A total of seven companies out of the 31 returned to profit in the first half of 2020 __ Semes, ICD, Philoptics, HB Technology, DeviceENG, Youngwoo DSP and FNS Tech. However, Top Engineering, Jusung Engineering and YAS turn to the red.
Table 1: 1H20 Equipment Supplier Financials (US $m)
