[Special Stock] Jeju Semiconductor, the Biggest Beneficiary of Semiconductor Shortage... Qualcomm Certification and Automotive Semiconductor Technology

[Asia Economy Reporter Hyungsoo Park] Jeju Semiconductor, a memory semiconductor design specialist (fabless) company, is showing strong performance. Securities firms' analyses suggesting improved earnings based on Internet of Things (IoT) semiconductors and memory products for Qualcomm 5G modems appear to be influencing the stock price.

At 10:50 AM on the 15th, Jeju Semiconductor was trading at 6,320 KRW, up 9.53% from the previous day.

Kim Jang-yeol, Head of Research Center at Sangsangin Securities, explained, "Jeju Semiconductor has obtained the Automotive Electronics Council Quality 100 certification (AEC-Q100) for emergency external communication functions in vehicles," adding, "Evaluations have been completed in Europe and Korea, and we expect successful market penetration."

He continued, "The target market, which has been prepared for over three years since 2018, can be stably secured for five years once adopted," and added, "Jeju Semiconductor aims for an average annual growth rate of 30% in the mid-term and targets semiconductor sales of 300 billion KRW by 2024."

Furthermore, he emphasized, "Certification from Qualcomm is an important measure of Jeju Semiconductor's mid- to long-term growth potential and technological status," and stated, "The first certification at the end of July last year may be just the beginning."

Kim said, "Considering Qualcomm, a leading company in the expansion of the 5G era, and Jeju Semiconductor's technological capabilities, there is ample possibility for continuous additional certifications," and analyzed, "if this scenario materializes, it will serve as a catalyst for revaluation of the valuation."

He estimated, "The current stock price is likely at a price-earnings ratio (PER) in the mid-teens," and expressed hope that "if growth potential is confirmed through additional Qualcomm certifications and new product launches, a comfortably higher multiple will be applied."

Kim also stated, "The memory for vaccine storage has proven our technological capabilities," and noted, "We hold sufficient inventory amid the booming industry." He added, "Due to the semiconductor supply shortage, it has become significantly important for fabless companies to secure stable production and supply," and explained, "Jeju Semiconductor holds nearly six months' worth of inventory as of the end of last year."