Investment Focused on Semiconductor Equipment Industry... Wonik IPS Follows Samsung's Lead

Rising Momentum for New Investment Expansion... Wonik IPS Highlights Foundry-Centered Portfolio

[Asia Economy Reporter Minwoo Lee] As the atmosphere for new semiconductor investments continues, attention is also focused on the scale of new investments by Samsung Electronics. Wonik IPS, a domestic equipment company with a high proportion of foundry (semiconductor contract manufacturing) investments, is expected to benefit.

On the 24th, Samsung Securities emphasized that semiconductor equipment companies, especially Wonik IPS, should be noted in this context. Researcher Jongwook Lee of Samsung Securities analyzed, "The resumption of large-scale investments by Samsung Electronics is a major recent issue in the semiconductor industry," and "Wonik IPS's equipment portfolio, which has a high contribution to Samsung Electronics' DRAM and logic process sales, holds a relative advantage."

First, it is judged that the investment in 6th generation V NAND flash equipment at Samsung Electronics' Xi'an plant has begun to be reflected in Wonik IPS's sales. Samsung Electronics' investment scale in DRAM and NAND is expected to increase by about 30% compared to last year. Researcher Lee stated, "Especially when the DRAM D1a process and NAND 7th generation process entry become full-scale, the company's sales contribution from customer investments will increase further," adding, "The scale of new memory process investments may increase from the second half of this year." Accordingly, Samsung Securities raised Wonik IPS's expected operating profit for this year by 2.4% to 266.7 billion KRW, which is about 23% higher than the market consensus.

The current semiconductor boom atmosphere is expected to continue with gradual and repetitive investments. This is because efforts to secure semiconductors in front-end industries are spreading at the early stage of new paradigms such as electric vehicles and data centers. Researcher Lee said, "Semiconductor companies are conservative in investment due to low short-term order visibility, but there is a considerable possibility of gradually and repeatedly increasing investments," and added, "As Pyeongtaek Plant 3 gains prominence and the possibility of expanding the Austin, Texas plant increases, expectations for equipment companies' earnings upgrades will also rise."

In this context, Samsung Securities maintained a 'Buy' rating on Wonik IPS and raised the target price by 35.4% to 65,000 KRW. The closing price the previous day was 49,600 KRW. Researcher Lee evaluated, "Considering that we are at the beginning of the semiconductor investment cycle and the possibility of upward revisions in earnings per share (EPS) is open, a valuation corresponding to the upcycle is reasonable."