LB Semicon, Expansion Amid Rising Demand... Strong Earnings Expected

[Asia Economy Reporter Hyunseok Yoo] LB Semicon is expected to record strong performance this year. The increase in demand for Driver IC (DDI) is anticipated to have a positive effect on the expansion of the testing division.

According to the financial investment industry on the 23rd, Shinhan Financial Investment forecasted that LB Semicon's sales and operating profit this year will reach 534.2 billion KRW and 58 billion KRW, respectively. This represents increases of 19% and 59% compared to the previous year.

Shinhan Financial Investment analyzed that the market environment where LB Semicon is focused this year is favorable. Researcher Lee Sewoong stated, "The growth of the display market is a key indicator of increased DDI demand," adding, "The market environment is favorable due to increased OLED panel demand, expanded applications, and the rise in the number of DDI IC chips within applications."

Growth of subsidiaries is also expected. LB Lucem, a semiconductor device specialist company, is anticipated to enter new markets. Established in 2004, LB Lucem produces display driving Driver ICs. These products are used in COF (Chip On Film), where chips are mounted on circuit boards (PCBs) in film form. He evaluated, "They are mainly used in large displays such as TVs and monitors," and added, "Recently, market entry has been expanding into wearables and mobile devices."

In particular, the effect of facility expansion is expected to be reflected this year. LB Semicon announced a facility expansion worth 58 billion KRW in September last year. The investment period is from October last year to May this year. He explained, "Testers have been used for existing DDI, PMIC, CIS, SOC, etc., but tester demand is expected to increase due to the expansion of CIS facilities by major clients," adding, "Tester equipment is expected to increase mainly around CIS to diversify categories and replace aging products, with new equipment operation scheduled to begin from the end of Q1 2021." He emphasized, "Test sales growth in 2021 is certain due to capacity expansion and increased operating rates from market growth."

LB Semicon is a company providing semiconductor back-end process (packaging, testing) services. Its major clients include Silicon Works, Samsung Electronics, and MagnaChip Semiconductor. Its main services are DDI packaging and testing.