Samsung's Texas factory troubles are a huge issue, but not for Samsung

Business

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What started last month as a routine factory line reset at Samsung's chipmaking plant in Austin is developing into a full-fledged, freakish outliner. But in spite of the temporary setbacks this turn of events will cause for the industry, on the whole, Samsung expects to navigate out of this mess relatively unscathed. Namely, South Korean market watchers are positive the company will qualify for an array of relief funds and related mitigation measures in the aftermath of the incident.

Of course, even if that prediction proves to be accurate, that won't necessarily make Samsung's current troubles in Texas any less grave. It will, however, make them not Samsung's. They never were fully on the company's foundry business to begin with, if we remember how this whole thing started.

‘Let it snow, let it-NO, let it stop!'

Regardless of whether it's an insurance company or the local governor who end up footing the bill, Samsung's current predicament has been largely overplayed. Particularly from the perspective of its potential effects on the chaebol's near-term performance – there probably won't be any. Or at least that's what analytics firm KB Securities told Korean media earlier today.

KBS underlined this bullish prognosis by leaving its Q1 share price target for Samsung unchanged, still sitting north of $92, based on today's exchange rate. That's 20% off the mark right now, but it's hardly a surprise not everyone shares that level of optimism.

Samsung, for its part, will probably only feel the effects of this blizzard-induced and government-mandated shutdown by the time Q2 reporting season is upon us. Namely, the company was expected to start fulfilling some pretty substantial — if not outright massive — chipmaking orders as early as next week. While it remains to be seen how Samsung deals with this setback in the interim, its response certainly won't be lacking in urgency.

Dominik Bosnjak

Business Samsung Electronics Samsung Foundry USA

Samsung's Texas factory troubles are a huge issue, but not for Samsung

‘Let it snow, let it-NO, let it stop!'

Dominik Bosnjak

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