Samsung Electronics has decided to invest 180 trillion won (US$150 billion) over the next three years until 2020, and investors are busy searching for the stocks that would benefit from it. Samsung's investment covers future growth businesses such as artificial intelligence (AI), biotechnology, automotive applications, 5G mobile communications, and existing businesses such as semiconductors and displays.
The most likely beneficiaries are expected to be semiconductor and display equipment and materials. This is because investment in these sectors is the biggest in scale and semiconductors and display are connected to Samsung’s new businesses.
Samsung said, "The demand for semiconductors is increasing not only in the fields of PC and smart phones but in the areas of AI, 5G, data centers, and automobile electric parts. We will increase investment centering on the domestic production base.” In display, flexible display that bends flexibly is considered as a future growth engine.
Kwon Sung-ryul, a researcher at Dongbu Securities, said, "Samsung Electronics' investment in semiconductor equipment was active a year and a half ago, but not anymore. We need to look at specific investment plans and orders, but the recent investment plan is certainly going to have a positive impact on equipment and material shares. "
Wonik Holdings and LOT Vacuum are among the stocks that can expect to receive orders soon. The former supplies semiconductor-related gas devices while the latter produces vacuum pumps. Kwon Myung-joon, a researcher at Samsung Securities, said, "They are basic devices that need to be installed before the whole equipment arrives. They will benefit the first."
When Samsung's semiconductor investment goes into full swing, equipment and material orders for Comico, Wonik IPS, Hanmi Semiconductor and DI are expected to increase.
The market expects that Samsung's investment in displays, which had been stopped for a while, will be resumed. The second construction phase of Samsung's Asan Tangjeong Display City, expected to cost 10 trillion won (US$ 8.3 million), was stopped due to sluggish sales of Apple's iPhone X and increasing competition from Chinese display makers. Kim Jeong-hwan, a researcher at Korea Investment & Securities, said, "As Samsung stopped investing in display equipment, equipment makers are struggling." Display equipment and material producers that can benefit from the resumption of investment are SFA, AP system, ICD, Wonik Tera Semicon, and Duksan Neolux.