Samsung's Market Cap Hits US$475.1 Bil. on Dec. 24
Samsung Electronics has overtaken Taiwan's foundry company TSMC to become the world’s largest semiconductor company in terms of market capitalization.
Samsung Electronics' market capitalization stood at 524,355.3 billion won (approximately US$475.1 billion) based on the closing prices on Dec, 24. It surpassed TSMC and regained the No. 1 position in the global semiconductor industry. The market capitalization of TSMC, which is listed on the Taiwanese stock market, was estimated at US$470.1 billion. This marked the first time in about five months since July 17that Samsung Electronics' market capitalization outweighed that of TSMC.
TSMC saw its stock price surge 63 percent in the second half of 2020, but Samsung Electronics received a better evaluation in the market with its balanced portfolio as an integrated device manufacturer (IDM). Samsung Electronics is getting a boost from recovering memory semiconductor prices and a strong performance of its foundry business. Some predict that DRAMs, Samsung Electronics' flagship product, will enter another super cycle in the first quarter of 2021.
The landscape of the global semiconductor industry changed significantly in 2020. In terms of market capitalization, Intel fell from third place to fifth with US$192.9 billion, while Nvidia (US$321.7 billion), a company specializing in graphics processing units (GPUs), grabbed third place. Netherlands' ASML (US$202.5 billion), a semiconductor equipment giant, also outclassed Intel to rank fourth.
Samsung Electronics' foundry business is considered the main force that drove the Korean tech giant’s market capitalization above 500 trillion won. In 2020, the chipmaker won a contract from Qualcomm to produce its latest AP Snapdragon 888 using its 5-nm micro-fabrication process technology. The company also landed an order from Nvidia to produce graphics processing units (GPUs). In terms of market share, TSMC is far ahead of Samsung Electronics with 55.6 percent versus 16.4 percent, but Samsung Electronics is ahead in terms of sales growth potential, analysts say.
An outlook on the foundry industry for 2021 is brighter. As the 5G mobile communication and AI markets grow, orders for 5G communication chips and GPUs are flooding from fabless companies. Foundry companies are busy with rushing orders so have order backlogs until the end of 2021. Market experts predict that foundry sales will swell by more than 20 percent in 2021 from an estimated 15.4 trillion won in 2020.