[Click eStock] "KNJ, SiC Focus Ring Expansion Momentum Expected"

NH Investment & Securities Report

[Asia Economy Reporter Minji Lee] NH Investment & Securities expressed on the 18th that K&J is expected to see a stock price increase due to the expansion of the silicon carbide (SiC) focus ring supply line.

K&J plans to invest 8 billion KRW by the first half of next year to expand SiC focus ring production equipment. With this expansion, the company's annual production capacity is estimated to increase from 30 billion KRW at the end of last year to 40 billion KRW by the end of this year, and 45 billion KRW by the first half of next year. The SiC focus ring is a key component used in the etching process that removes unnecessary circuits during semiconductor manufacturing.

TC-K, the market leader in SiC focus ring market share, supplies products to semiconductor equipment companies in the before-market, while K&J supplies products to semiconductor chip manufacturers in the aftermarket. Semiconductor chip manufacturers are expanding their aftermarket share to improve profitability and diversify vendors, so related demand is expected to continue increasing.

K&J started supplying products to SK Hynix in 2016 and has been supplying products approved by the world's largest semiconductor company since the end of 2020. Sehoon Son, a researcher at NH Investment & Securities, said, "The supply line is expanding," adding, "Product quality tests are being conducted for additional lines, so the SiC focus ring supply line will be further expanded."

Looking at the company's SiC focus ring sales, it increased from 10.7 billion KRW in 2019 to 15.5 billion KRW in 2020, and 23.2 billion KRW last year. Researcher Son predicted, "This year it will expand to 32 billion KRW, and next year to 41 billion KRW," and added, "Display equipment sales are expected to gradually increase recently thanks to orders from CSOT."

Recently, semiconductor equipment consumable parts companies have shown favorable stock performance due to expansion momentum, but K&J has been excluded from this trend due to sluggishness in the display equipment sector. Researcher Sehoon Son analyzed, "The display equipment sector is expected to show growth starting this year, and the SiC focus ring sector is expected to see expansion of supply lines and increased supply volume per line."