[Special Stock] Jeju Semiconductor Secures Supply Chain for US Biden Vehicle Semiconductors... Stock Price Level-Up Expected

[Asia Economy Reporter Hyunseok Yoo] Jeju Semiconductor is showing strong performance. This is interpreted as being influenced by securities firms' analysis that operating profit will more than triple this year.

As of 9:29 AM on the 25th, Jeju Semiconductor was trading at 6,400 KRW, up 5.26% (320 KRW) compared to the previous trading day.

Jeju Semiconductor is a memory semiconductor fabless company listed on the KOSDAQ market in 2000. It designs low-power, low-capacity memory semiconductor product lines. Major products include MCP (Multi-Chip Package), DRAM, and SRAM. Through partnerships with domestic and overseas foundries and module companies, it delivers products to customers after production and assembly.

Researcher Kangho Oh of Shinhan Financial Investment analyzed, "Semiconductor prices are rebounding," and added, "This is a phase where demand recovery is occurring in a supply-constrained environment." He continued, "When semiconductor prices rise, product unit prices also increase," and "The growing demand for automotive memory semiconductors is also a positive factor."

He emphasized, "The amount of semiconductors installed inevitably increases due to autonomous driving and expanded functions," and "Attention should be paid not only to high-performance, high-spec semiconductor products but also to the expansion of low-power semiconductor product lines."

Researcher Oh explained, "We are expanding the portfolio of low-power semiconductor products used in connected E-Call and infotainment," and "Sales to domestic and overseas automakers are expected to increase."

Additionally, he said, "We have successfully certified memory products for Qualcomm 5G modems," and predicted, "Semiconductor sales will increase in 2021 due to the blooming of the 5G and automotive electronics markets."

Jeju Semiconductor is estimated to achieve sales of 204.5 billion KRW and operating profit of 19.7 billion KRW this year. These figures represent increases of 12% and 317%, respectively, compared to the previous year. Due to the rebound in semiconductor prices and the expansion of demand for automotive semiconductors, the operating profit margin is expected to reach 9.6%, which is 7.0 percentage points higher than the previous year.

Researcher Oh stated, "With the expansion of sales in the automotive electronics sector, valuation rerating is also possible," and added, "As a domestic semiconductor fabless company, stock price rerating is expected."

Meanwhile, on the 24th (local time), U.S. President Joe Biden ordered a review of supply chains for critical items that revealed structural supply and demand issues. The review targets included semiconductor chips and automotive batteries, in which Korea holds a technological advantage in the global market.

Due to the shortage of automotive semiconductor chips, production lines at U.S. automobile companies have halted. If the Biden administration's review focuses on reducing dependence on China for these items and expanding and strengthening supply chains through alliances, it is expected to work favorably for Korea.