[Click eStock] "Simtek to Break Record High Performance from This Year to Next Year"

[Asia Economy Reporter Ji Yeon-jin] Kiwoom Securities presented a target stock price of 45,000 KRW for Simtek, stating that profitability is expected to improve significantly due to increased sales of high value-added microcircuit manufacturing process (MSAP) substrates, continuous rise in blended average selling price (blended ASP), and reduced fixed cost burden from high utilization rates.

Against the backdrop of a boom in package substrates this year, the company is expected to achieve an operating profit of 159 billion KRW this year, up 77%, and reach a record high of 220.2 billion KRW next year.

Kim Ji-san, a researcher at Kiwoom Securities, said, "The three major demand sectors?flip chip-chip scale packaging (FC-CSP) for entry-level 5G application processors (AP), solid-state drive (SSD) controllers, and server buffer ICs?are all strong," adding, "Due to the supply shortage of flip chip-ball grid array (FC-BGA), there is a trickle-down effect that stabilizes FC-CSP prices, and leading companies are focusing on premium AP demand, creating a favorable competitive environment."

FC-CSP sales are expected to increase by 51% year-on-year to 125.9 billion KRW this year, followed by a 34% increase to 168.6 billion KRW next year. System-in-package (SiP) sales are rapidly growing due to increased demand for wearable devices such as smartwatches and wireless earphones from overseas customers. Sales are projected to reach 41.4 billion KRW this year, up 54% year-on-year, and 73.4 billion KRW next year, a 77% increase.

Researcher Kim said, "Multi-chip packaging (MCP), which has the largest sales scale, is realizing growth beyond expectations as NAND sales expand despite weak smartphone demand," and added, "With the MSAP substrate production capacity increased by 10,000㎡, an additional potential sales of 200 billion KRW has become possible."

Operating profit for the fourth quarter is expected to increase by 322% year-on-year to 62.1 billion KRW. FC-CSP is expected to lead strong performance, and sales of DDR5 module PCBs and Advanced BOC are anticipated to begin.