[Featured Stock] Telechips Eyes Samsung Auto Semiconductor M&A... MCU Mass Production Momentum Expected

[Asia Economy Reporter Hyunseok Yoo] Telechips, which is promoting mass production of microcontroller units (MCU) for automotive semiconductors, is showing strong performance. It appears that the expectation that automotive semiconductor companies will be included in the list of potential targets as Samsung Electronics pursues a large-scale merger and acquisition (M&A) is influencing the stock price.

As of 10:09 AM on the 11th, Telechips was trading at 19,000 won, up 1,950 won (11.44%) from the previous trading day.

One economic media outlet reported that companies included in Samsung Electronics' list of acquisition candidates are generally either U.S.-based companies or automotive semiconductor companies. Samsung Electronics, which plans to build a new foundry (semiconductor contract manufacturing) plant worth 20 trillion won in the U.S. to strengthen its system semiconductor capabilities, is reportedly showing interest in companies that can create synergy. On the 5th (local time), Han Jong-hee, Vice Chairman of Samsung Electronics (Head of the DX Division), said at the CES 2022 press conference held in Las Vegas, "We are moving faster than expected. Good news will come soon," and added, "For large-scale M&A, we are keeping all possibilities open for both components and sets and are looking at many companies."

Both inside and outside the business community are paying attention to Samsung Electronics' M&A plans. Considering the recent moves of Samsung Electronics Vice Chairman Lee Jae-yong, automotive semiconductor companies aiming to secure leadership in artificial intelligence (AI), 6th generation mobile communication (6G), bio, and automotive electronics markets are being mentioned as acquisition targets.

Last year, amid the global semiconductor supply shortage, the government joined hands with semiconductor-related companies to strengthen the competitiveness of the semiconductor industry ecosystem. The 'Semiconductor Solidarity and Cooperation Council' was launched, where fabless and foundry companies agreed to actively cooperate in utilizing semiconductor intellectual property (IP) and prototype production for next-generation system semiconductor development.

Telechips is promoting mass production of microcontroller units (MCU) for automotive semiconductors. It is known to be conducting product tests with major domestic and overseas customers, aiming for mass production next year. The MCU is produced based on Samsung Electronics' 12-inch wafer. It is expected to help cope with the shortage of automotive semiconductors. Telechips is exploring MCU supply plans with domestic and international customers. Currently, tests are being conducted with customers using the MCU engineer samples (ES) developed in-house.

Kim Jang-yeol, Head of Research Center at Sangsangin Securities, said, "Since April 2020, Telechips has been jointly conducting research and development in the mobile field NPU (neural processing unit) under the government's AI semiconductor R&D sector," and added, "It is expected to be capable of developing an autonomous driving car (Level ~3) AP chipset that combines existing digital cockpit solutions with AI function autonomous driving sensors and ADAS."

He assessed, "There is a possibility that Telechips could increase its chances of entering the candidate pool as the second or third prepared vendor in the autonomous driving car market."