[Asia Economy Reporter Hyunseok Yoo] Semiconductor IP (Intellectual Property) company Chips&Media's stock price is on the rise. The news that the shipment volume of semiconductor chips applying its own technology has surpassed 1 billion units appears to have influenced the stock price. Chips&Media's IP, which can be applied to any device using video such as automobiles, TVs, set-top boxes, IP cameras, and robots, has expanded its portfolio from video codecs to image signal processors and deep learning-based computer vision. The scope of application has also broadened with device advancements.
As of 1:55 PM on the 9th, Chips&Media was trading at 16,800 KRW, up 6.33% (1,000 KRW) compared to the previous trading day.
Chips&Media has expanded its IP domain from the existing video codecs to image signal processors (ISP), deep learning-based computer vision, and more. Chips&Media generates revenue through licenses received when supplying IP to clients and royalties received when clients sell semiconductors made using the IP.
Chips&Media's royalty income has steadily grown since its founding, surpassing 1 billion units last month. As demand for in-house chip production increases among companies that previously used off-the-shelf semiconductors, such as IT platform companies and telecommunications firms, the customer base is also expanding. ISP (Image Signal Processing), CP (Computational Photography), and computer vision functions require real-time processing and low power consumption. Since these must be processed as hardware IP embedded in semiconductor chips like video codec IP, Chips&Media, which has strengths in semiconductor IP design technology, is expected to have many growth opportunities.
Chips&Media has succeeded in commercializing next-generation video standards. It has signed contracts with major mobile customers in the US and China and is expected to achieve its highest annual performance ever this year.
Chips&Media also expects results in its new business following video codecs, called ‘Super Resolution.’ Super Resolution is a technology that upscales low-resolution video to high-resolution video. When applied to TVs and set-top boxes, it allows viewing of HD and Full HD videos in 8K high definition. Last year in the second half, it signed a Super Resolution license contract with a Chinese company.
Jongseon Park, a researcher at Eugene Investment & Securities, said, "The US license contract, whose revenue recognition was deferred, will be reflected, and as investments in the non-memory semiconductor industry in China proceed, large-scale additional license contracts will continue."
He added, "Compared to the global peer average price-to-earnings ratio (PER) of 62.0 times, it is trading at a discount," and predicted, "As investment and competition in the global non-memory business intensify, Chips&Media's stock price will turn upward due to expectations of additional overseas license contracts and increased royalty-related performance."
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