'Leading Domestic Production of Ceramic STF' SamCNS Makes Large-Scale Facility Investment Amid Semiconductor Boom

[Special Stock] Price Rebounds After Opening Below IPO Price on First Day of Listing

[Asia Economy Reporter Hyungsoo Park] SamCNS, a manufacturer of ceramic space transformers (STF) for semiconductor probe cards, is showing strong performance on its first day listed on the KOSDAQ market.

At 9:56 AM, SamCNS shares were trading at 7,670 KRW, up 19.84% from the opening price. The opening price was set at 6,400 KRW, down 1.53% from the public offering price of 6,500 KRW.

SamCNS acquired Samsung Electro-Mechanics’ ceramic division in 2016 and produces probe card components for semiconductor testing. Probe cards are inspection equipment accessories that connect semiconductor chips to testing devices. Ceramic STF is one of the core components of probe cards. SamCNS supplies ceramic STF for probe cards to four domestic probe card manufacturers and one overseas manufacturer. As of the end of last year, ceramic STF for NAND probe cards, SamCNS’s main product, accounted for 95% of total sales.

Last year, the company recorded sales of 35.9 billion KRW, operating profit of 7.8 billion KRW, and net profit of 6 billion KRW. Compared to the previous year, sales increased by 71.3%, operating profit by 642.2%, and net profit by 985.5%. The operating profit margin rose from 5.0% in 2019 to 21.7% last year, resulting in significant profit growth. The company expects to maintain high profitability through profit growth driven by external expansion and efficient management of selling and administrative expenses.

After listing, SamCNS plans to use the public offering funds for large-scale facility investments. The company has been continuously expanding production capacity since 2018. As of the end of 2020, the operating rate was 69%. From the product development stage, it shared production capacity and other information with customers and adjusted facility operating rates to secure appropriate production volumes and coordinate timely investment execution.

SamCNS plans to invest in a new factory to secure additional production capacity due to increased orders from major customers. It will invest 30 billion KRW to establish a new factory and expand production facilities in Osong, Chungbuk. After the expansion investment is completed, ceramic STF production capacity is expected to increase from 5,000 units to 10,000 units annually.

The bold expansion decision by SamCNS considered the continuous increase in semiconductor demand. Due to the COVID-19 pandemic, consumers’ online activities increased, leading to higher data traffic usage in e-commerce, video streaming, and remote work. Demand for DRAM semiconductors related to servers from cloud service providers increased, as did demand for DRAM semiconductors related to mobile devices due to the rise in 5G smartphone demand. The launch of new game consoles also boosted NAND semiconductor demand. As a result, the semiconductor market and semiconductor manufacturers’ facility investment scale are expected to be larger than last year.

Among the public offering funds, 9 billion KRW will be used for debt repayment. In 2016, SamCNS acquired Samsung Electro-Mechanics’ ceramic division for 45 billion KRW. During the acquisition financing process, it borrowed 9 billion KRW from its parent company YIK, which will be repaid using the public offering funds.

The remaining approximately 11 billion KRW will be allocated for operating funds and research and development expenses. These funds will be used to purchase raw materials necessary for operating the new factory and to hire additional personnel. Additionally, funds will be invested in developing new products to diversify the sales structure, which is currently concentrated on a single product. SamCNS is expanding its product portfolio by pursuing new businesses such as ceramic STF for DRAM and CMOS image sensor (CIS) probe cards. The sales proportion of ceramic STF for NAND probe cards may decrease starting this year due to increased sales of ceramic STF products for DRAM probe cards.

Choi Yoo-jin, CEO of SamCNS, said, "We will launch new products such as DRAM and non-memory through the IPO and expand our business into electrostatic chucks and communication modules," adding, "With innovative technology, we will leap forward as a global leader in ceramic STF beyond Korea."

SamCNS is an affiliate of Exicon, a leading domestic semiconductor inspection equipment company. Choi Myung-bae, chairman of Exicon, controls subsidiaries including YIK, Samtec, and SamCNS through Exicon. CEO Choi Yoo-jin of SamCNS is Chairman Choi Myung-bae’s eldest daughter. She holds a bachelor’s and doctorate in materials engineering from Seoul National University and worked at Samsung Electronics’ semiconductor research institute. She joined SamCNS at its inception and has served as CEO since November last year.