[Featured Stock] Jeju Semiconductor, Short-Term Resolution of Car Semiconductor Shortage Unlikely... 'Significant Potential for Stock Price Increase'

[Asia Economy Reporter Hyungsoo Park] Jeju Semiconductor is showing strong performance. Amid the ongoing shortage of automotive semiconductors, news that Kia will halt operations at its Georgia plant in the U.S. for two days appears to be influencing stock prices. Not only Kia, but factories of Ford, GM, Toyota, and Volvo in the U.S., Mexico, and Canada have also stopped due to semiconductor shortages.

As of 9:59 AM on the 5th, Jeju Semiconductor is trading at 6,470 KRW, up 3.85%.

According to local media on the 3rd, Kia plans to temporarily suspend operations at the plant to resolve supply chain issues. The plant shutdown is reportedly related to the recent global semiconductor chip shortage.

Tom Caulfield, CEO of GlobalFoundries, said, "Before the COVID-19 pandemic, the semiconductor industry was expected to grow at an average annual rate of over 5% for the next five years," but added, "Now, it is expected to grow more than twice as much during the same period."

He continued, "The semiconductor supply shortage is not a one-time issue but a structural phenomenon caused by rapidly increasing broad demand for semiconductors."

Jeju Semiconductor is a fabless company specializing in semiconductor development. Fabless companies focus on semiconductor research and development (R&D) without owning their own manufacturing plants. Unlike typical fabless companies that focus on system semiconductors (non-memory semiconductors), Jeju Semiconductor operates in the memory semiconductor business.

Jeju Semiconductor expects sales of automotive electronic memory semiconductors to increase significantly this year. Over the past year, it received ‘AEC-Q100’ (Automotive Electronics Council’s reliability standard for automotive components) certification for five memory semiconductors. It is expected to obtain additional AEC-Q certification for two more types of memory semiconductors.

Kim Jang-yeol, Research Center Director at Sangsangin Securities, analyzed, "In Europe, with the mandatory installation of automotive system e-Call, there is a need for high-reliability, low-capacity memory." He added, "Once automotive components are selected, they are difficult to replace easily." He further explained, "Although entry is difficult, once established, sales remain stable for the next 10 years. Supplying to LG, Thales, and Hyundai Mobis ultimately leads to GM, Hyundai, and Kia."

He emphasized, "Jeju Semiconductor’s potential is not yet widely recognized," and added, "Given its specialized low-power memory solution strategy for 5G front industries, Qualcomm certification, and IoT, once investor perception changes, the stock price’s growth potential could be greater than expected."