[Click eStock] “Haesung DS Decides Expansion Due to Increasing Electric Vehicle Demand”

Expansion Work Scheduled to Start Early Next Year
Samsung Securities "Maintains Haesung DS Target Price at 55,000 Won"

[Asia Economy Reporter Gong Byung-sun] Haesung DS has decided to expand its facilities with a scale of 50 billion KRW to meet the increasing demand for electric vehicles. Since the current operating rate is already at 100%, the additional expansion volume is expected to be absorbed within a year.

According to Samsung Securities on the 16th, Haesung DS announced on the 15th that it had decided on a 50 billion KRW expansion. This decision was made to address customer requests and the prolonged semiconductor lead time. The expansion is estimated to increase sales by approximately 150 to 200 billion KRW.

The automotive semiconductor market is one of the most promising industries. Semiconductor foundry companies TSMC and SMIC have announced investments of 2.88 billion USD (about 3.3638 trillion KRW) and 8.87 billion USD respectively to expand automotive semiconductor facilities in Nanjing and Shanghai, China. Pat Gelsinger, CEO of Intel, forecasted that the automotive semiconductor market will grow to 115 billion USD by 2030.

(Provided by Samsung Securities)

Semiconductors required for electric vehicles are expected to increase 2.5 times compared to internal combustion engine vehicles, further boosting semiconductor demand. In terms of cost, semiconductors needed for internal combustion engine vehicles amount to 400 USD, about 2% of the vehicle price. For electric vehicles, including power semiconductors, autonomous driving semiconductors, and communication semiconductors, the cost rises to 1,000 USD per vehicle.

The expansion is expected to start early next year and take about 7 to 8 months. Additionally, due to increased demand for automotive semiconductors and electronic products, further expansion is likely needed between the end of next year and early 2023. Samsung Securities researcher Lim Eun-young explained, “The operating rate is already approaching 100%,” and “the additional expansion volume will also be absorbed within a year.”

Accordingly, Samsung Securities maintained its investment opinion of ‘Buy’ on Haesung DS with a target price of 55,000 KRW. The closing price on the previous day was 41,350 KRW.