[Company analysis] SUMCO Corporation (SUMCO)

「SUMCO Corporation (SUMCO)」is a company that manufactures silicon wafers for semiconductor manufacturing. It was originally established in 1999 by「 Mitsubishi Materials Corporation(三菱マテリアル)」and「Sumitomo Metal Industries(住友金属工業)」, and currently holds a 30% global semiconductor silicon wafer share. It is the second largest in the world after「Shin-Etsu Chemical Co., Ltd.(信越化学工業)」. The number of consolidated employees is approximately 8,017.

 

1. Company Profile

2. Summary and Features

3. Major Business

4. Financial Information

 

 

 

1. Company Profile

 

※Unit is JPY million, as of 2019

Company name	SUMCO Corporation
Company name (Japanese)	SUMCO
Date of establishment	Friday, July 30, 1999
Headquarters location	東京都港区芝浦一丁目2番1号
Capital	138,700
Consolidated sales	325,059
Consolidated operating profit	85,165
Consolidated total assets	588,250
Consolidated capital	325,545
Capital adequacy ratio	55.3%
Consolidated number of employees	8,017

 

 

 

2. Summary and Features

 
The core business of「SUMCO」is the manufacture of silicon wafers for semiconductors. It has the second largest market share in the world after「Shin-Etsu Chemical Co., Ltd.」and supplies high-end products mainly used in memories and logic semiconductor. it is no exaggeration to say that this silicon wafer is the all business of「SUMCO」.  In recent years, thanks to the remarkable semiconductor boom from 2018 to 2019, their sales and income has been significantly improved. 

Basically, semiconductor is also called "industrial rice", and silicon wafers are essential for the production of the semiconductor. The main material of silicon wafers is high-purity polycrystalline silicon, which is a market with a very limited number of suppliers. In order to provide a stable supply of silicon wafers, semiconductor manufacturing companies have a strong tendency to make a long-term purchase contract of a certain quantity within a certain period. 

Currently, the demand for 300mm wafers is expected to be increased in near future, so「SUMCO」is making capital investments on increasing production for long-term customers. In particular, Chinese semiconductor companies are expected to become important business partner with this company. Until now, Chinese semiconductor companies have used medium-grade silicon wafers. But if they succeed in massproducing of high-performance semiconductors (NAND, DRAM, logic), they will eventually need high-quality wafers just like「SUMCO」provides.

In the future, of course, some substitutes such as germanium semiconductors will be appeared and mightreplace silicon wafers. In fact, the germanium semiconductor has more than 1.5 times the performance in the same area than the silicon semiconductor. The problem of stabilizing the oxide film, which has been a problem so far, has been found to be solved recently, and some companies are now conducting test production. However, this is only the verification stage, so it is hard to estimate future semiconductor business.

 

 

 

3. Major Business

 

■ Manufacturing and sales of semiconductor silicon wafers
「SUMCO」manufactures silicon wafers, which are essential materials for semiconductor manufacturing. In particular, they can provide high-grade semiconductor silicon wafers, by their world top class manufacturing technology.

 

 

 

4. Financial information

 

※Unit is JPY million

		2016	2017	2018
Consolidated sales		211,361	260,627	325,059
Consolidated operating profit		14,046	42,085	85,165
Consolidated total assets		493,243	530,906	588,250
Consolidated net assets		242,836	281,623	325,545
Breakdown of sales	Japan	53,600	60,600	71,500
	Europe and others	16,900	19,600	24,900
	North America	28,000	33,100	38,000
	Asia	112,800	147,300	190,600