[Special Stock] SamCNS Benefits from Lee Jae-yong's Semiconductor Super-Gap... Localization of Ceramic STF at Samsung's Request

[Asia Economy Reporter Hyungsoo Park] SamCNS, a manufacturer of ceramic space transformers (STF) for semiconductor probe cards, is showing strong performance. The expectation that Samsung Group's management pace will accelerate following the parole of Samsung Electronics Vice Chairman Lee Jae-yong appears to be influencing the stock price. SamCNS succeeded in developing ceramic STF in response to Samsung Electronics' demand for domestic development of D-RAM probe cards. Having succeeded in localization, the company is increasing sales by discovering new business partners.

As of 12:20 PM on the 10th, SamCNS is trading at 8,390 KRW, up 7.43% from the previous day.

Samsung Group is largely relieved by the parole decision. Although Samsung Electronics has strengthened system management by achieving record-high performance even in the absence of its head, it is also true that the absence of the head has posed limitations in making bold investments or establishing mid- to long-term strategies.

Therefore, Vice Chairman Lee is expected to start by reviewing mid- to long-term investment strategies to respond to the rapidly changing semiconductor market conditions. To survive in the highly competitive foundry market recently, it is highly likely that Samsung Electronics will announce the selection of the site and investment for its U.S. foundry plant first. Additionally, the establishment of a concrete plan related to the 171 trillion KRW system semiconductor investment will require the head’s decisive decision. Previously, Samsung Electronics announced plans to pursue meaningful M&A to expand new businesses such as artificial intelligence (AI), 5G, and automotive components within three years.

SamCNS started in 2007 as the ceramic substrate business division for probe cards at Samsung Electro-Mechanics and has continued its business as a strategic ceramic STF supplier for Samsung Electronics’ probe cards. In 2016, it acquired the ceramic substrate business division for probe cards from Samsung Electro-Mechanics and changed its name to SamCNS.

Probe cards are inspection equipment accessories that connect semiconductor chips and test equipment. 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.

The company has set a plan to start and expand domestic supply of ceramic STF for D-RAM probe cards, which have been entirely imported by domestic semiconductor companies. Since ceramic STF is supplied to semiconductor manufacturers through probe card companies, cooperation with domestic and international probe card companies is important. For domestic semiconductor manufacturers, most NAND probe cards are supplied by domestic probe card companies, while most probe cards for D-RAM and CIS, among non-memory types, are supplied by overseas probe card companies.

SamCNS plans to use funds raised through its initial public offering (IPO) to make large-scale facility investments. Since 2018, SamCNS has continuously expanded its production capacity. As of the end of 2020, it recorded a utilization rate of 69%. By sharing production capacity and other information with customers from the product development stage and adjusting facility utilization rates, the company coordinated securing appropriate production volumes and timely investment execution.

In response to increased orders from major customers, SamCNS plans to invest in a new factory to secure additional production capacity. 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 per year to 10,000 units.