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Semiconductor industry shows big profit gap between majors, minors

The profit gap between majors and minors in the semiconductor industry is as wide as eight-fold, analysis by a corporate tracker showed Wednesday, an imbalance veiled by big successes of industry leaders, such as SK hynix and Samsung Electronics.

According to CEO Score, total sales by 173 semiconductor firms last year came to 242.88 trillion won ($225.3 billion). Their operational profit reached 57.1 trillion won. The analysis was based on business reports submitted by the companies who are members of the Korea Semiconductor Industry Association.

The figures indicate an average 23.5 percent in operating profit rate, a high performance considering that the average rate for manufacturers was 5 percent.

(Yonhap)
(Yonhap)

A closer look, however, revealed that while the two majors had exceptional rates -- Samsung Electronics 47.4 percent and SK hynix 45.6 percent -- the average for 171 smaller companies was only 5.9 percent.

The increase in operational profit rate from a year ago also showed a big gap. For the top two, the increase was 20.8 percentage points. For the others, it was 2 percentage points.

Excluding Samsung Electronics and SK hynix, Mecaro was the only company to surpass 40 percent by recording 40.9 percent. Tokao Carbon Korea, or TCK, showed a rate of 36.6 percent, and Leeno Industrial 34.7 percent.

Eighty-eight firms out of the country's top 500 companies showed a rate of under 5.9 percent average. For 23 firms, the rate was negative. (Yonhap)

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