TSMC overtook Tencent, China, to top Asian market capitalization. Stocks are rising as semiconductor shortages lead in micro-processes. Samsung Electronics' stock price is going down to 70,000 won. I can't offer future business while I'm running out of competitors such as Intel.
How far will TSMC, a Taiwanese semiconductor company, continue to run?
TSMC beat Chinese game maker Tencent on the 17th to become the No. 1 Asian market capitalization. Based on the closing price on the 17th, TSMC's market capitalization was $540 billion (about 630.882 trillion won), surpassing Tencent (535.8 billion dollars, about 625.975 trillion won) by $4.2 billion.
It has been since last year that TSMC has been welcomed like this by market investors. Investors gathered as its role was highlighted due to supply shortages of semiconductors. TSMC ranked first in the global semiconductor industry with sales of $12.92 billion in the first quarter. Experts predict that TSMC's stock price will continue to soar for the time being. It is because it has declared that it will expand production of semiconductors for vehicles, which are still suffering from supply and demand difficulties, and is also leading in high-tech micro-processes.
Investors Flocking to TSMC
Of course, other factors contributed to TSMC's ability to beat Tencent. This is because Tencent shares plunged nearly 10% as the Chinese government introduced regulations on new Internet companies. The Central Committee of the Communist Party of China and the State Council (Administration) announced the "Five-Year Enforcement of the Government of Law (2021-2025)" on the 11th and mentioned strengthening legislation in the areas of monopoly, security, and technology. It also added that it will strengthen law enforcement in areas such as big data, artificial intelligence, food, and pharmaceuticals. China has decided to strictly collect personal information and tighten penalties for unauthorized use. Industries interpret this measure as a measure to regulate big tech companies.
However, TSMC's potential is not easy to explain only by the Chinese government's regulations. In fact, TSMC's stock price rose more than 9% this year. As semiconductor shortage (short supply and demand) situation continues, TSMC, which is the world's No. 1 semiconductor production capacity, has soared.
TSMC is also expanding the establishment of semiconductor plants around the world. Recently, Germany is working on evaluation to establish a semiconductor plant. In April, the company announced its plan to invest $100 billion (about 115 trillion won) in foundry business over the next three years. In May, it announced that it would build five additional semiconductor plants in Arizona.
The U.S. government is also a strong supporter of TSMC. The U.S. government is strengthening its relationship with TSMC to check China, which is dreaming of becoming a semiconductor giant. TSMC, which has the ability to mass-produce state-of-the-art semiconductors, is increasing investment in the U.S. and is using a method that prevents semiconductor equipment from
Stock investors are also flocking to TSMC's move. Even "seohak ant," which refers to domestic investors who buy U.S. stocks, has swept up TSMC stocks that are listed on the U.S. stock market. According to the Korea Deposit Settlement Institute, TSMC ranked fifth with $514.8 billion (approximately 614.8 billion won) from late June last year to the end of June this year. The number one foreign stock was Tesla of the U.S., which amounted to $4.246 billion. It was followed by Apple ($2.297.2 billion), Amazon ($53089 million, and Palantier ($530.12 million, and $627.4 billion).
Samsung Falls to 70,000 Electronics While TSMC Shares Surge
Samsung Electronics, which was once ahead of TSMC in terms of market capitalization, has not been able to escape '70,000 Electronics' recently. Shares of Samsung Electronics fell 400 won to 72,700 won on the 20th. It has been on the decline for eight consecutive trading days.
Samsung Electronics was overturned by TSMC in November 2019. Since then, Samsung Electronics' stock price has risen by nearly 30 percent, widening the gap with TSMC again. This is because there is a consensus on Samsung Electronics' undervaluation theory and expectations on revitalizing the semiconductor business. However, Samsung Electronics has rarely received a chance to overtake TSMC again since it was overturned by TSMC in March 2020.
The reasons are analyzed in many ways. Since Samsung Electronics Vice Chairman Lee Jae-yong was arrested in January, competitors such as Intel and TSMC have not been able to actively respond to aggressive investments. In particular, as Intel and TSMC expanded their investment in high-tech micro-processes, which are Samsung's strengths, doubts arose in the market that Samsung Electronics' competitiveness might be relatively low. Critics say Lee failed to prepare for future projects due to repeated imprisonment and release.
In particular, on the 11th, Taiwan's market research firm TrendForce predicted that DRAM prices for PCs will fall by up to 5% in the fourth quarter of this year, and Samsung Electronics shares fell further as global investment bank Morgan Stanley raised the possibility of DRAM price peakout.
Investment losses are borne by individuals.
The damage is being borne by individual investors. Individuals bought 242.88 million shares net sold by foreigners and 161.42 million shares released by institutions this year. The cost of acquiring Samsung Electronics shares is about 32.127.8 trillion won. Individual investors' shares also rose. According to the Korea Exchange, individuals purchased 394.2 million shares of Samsung Electronics by the 18th of this year. Individual investors' stake in Samsung Electronics, which was 6.48 percent as of the end of last year, exceeded 13 percent (13.08 percent) for the first time as of the 18th. It is estimated that the number of individual investors with Samsung Electronics' shares also exceeded 5 million.
Industries expect Samsung Electronics Vice Chairman Lee Jae-yong to return its ransom to the past by presenting new businesses and announcing semiconductor investment plans as he was released on the 13th. Some analysts say that the fact that foreign investors threw Samsung Electronics despite strong demand for DRAMs means that there is a lot of uncertainty in the future."As there are more individual investors, expectations for Samsung Electronics are rising," an industry source said. "If Samsung Electronics' investment in future businesses begins in earnest, stock prices can rebound."
Some are also raising concerns about Samsung Electronics' stock price. KB Securities analyzed Samsung Electronics' stock price over the past 20 years (2001-2021), and analyzed that Samsung Electronics' stock price rebounded after continuing to decline for about six months.
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TSMC ranked No. 1 in Asian market capitalization vs. Samsung Electronics fell to 70,000 Electronics.
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