[Featured Stock] OpenEdge, 3.4x Higher Power Efficiency Compared to ARM Valued at 80 Trillion Won... Rising Star Draws Attention

[Asia Economy Reporter Hyungsoo Park] The stock price of Open Edge Technology, a newcomer to the KOSDAQ, is showing strong performance. The news that Samsung Electronics Vice Chairman Lee Jae-yong and SoftBank Chairman Masayoshi Son met to discuss a strategic partnership between semiconductor design company ARM and Samsung Electronics appears to be influencing the stock price. As ARM is pursuing either a sale of its shares or an IPO, its value is attracting attention. SoftBank estimates the company's value at $60 billion (approximately 86.46 trillion KRW).

As of 9:36 a.m. on the 4th, Open Edge Technology is trading at 13,000 KRW, up 23.22% from the previous trading day.

According to industry sources, Samsung Electronics Vice Chairman Lee Jae-yong and Chairman Masayoshi Son are expected to meet to discuss various cooperation matters. ARM attempted an M&A deal worth $40 billion (about 55 trillion KRW) in 2019 but failed to pass antitrust reviews in various countries. Nvidia abandoned its acquisition of ARM earlier this year. With global companies showing interest in acquiring ARM, its recent corporate value is approaching 100 trillion KRW.

Amid growing interest in ARM, Open Edge Technology, a specialized AI semiconductor intellectual property (IP) design platform company, was listed on the stock market on the 26th of last month. At that time, due to high volatility in the KOSDAQ market, the public offering price was set at 10,000 KRW, lower than the lower end of the expected band of 15,000 KRW. The stock price rose to 15,150 KRW on the 28th of last month. The prospect of Samsung Electronics acquiring ARM influenced Open Edge Technology's stock price. Subsequently, profit-taking selling pressure caused the price to fall to 10,550 KRW on the 30th of last month.

Open Edge Technology is a system semiconductor IP specialist company that owns the world's only integrated AI semiconductor design asset IP platform. The semiconductor IP business does not manufacture semiconductor chips directly but produces IP, which is the core design blueprint of semiconductors, and supplies it to fabless companies. Its revenue model includes licensing fees and running royalties based on mass production of semiconductor chips applying the IP. A similar business model is used by companies such as the UK-based ARM.

Depending on market demand, it develops core functional blocks necessary for AI semiconductor chip design and supplies them to semiconductor chip design companies (fabless, design houses, integrated semiconductor companies, etc.). It developed an 'AI semiconductor IP platform' and received an AA grade in a preliminary technology evaluation from NICE D&B in January, the first in the semiconductor IP industry.

Amid intense competition among global IT companies surrounding ARM, Open Edge Technology is strengthening its technological competitiveness, positioning itself as the 'Korea's ARM.'

Open Edge Technology's neural network processing unit IP product is optimized for edge applications using input sensors such as cameras, offering real-time responsiveness with low latency at 30fps or 60fps depending on the application. Based on a 14nm process, it boasts up to 6 TOPS/Watt, which is 3.4 times higher power efficiency compared to ARM's approximately 1.75 TOPS/Watt, and up to 2.5 TOPS/mm² area efficiency, 2.5 times higher than ARM's 1 TOPS/mm². It is developing AI computing necessary for key edge environments in collaboration with fabless customers in security cameras and automotive system semiconductors.

Open Edge Technology maintains a cooperative relationship with ARM based on different IP product lines and boasts advanced technology in some areas, raising expectations for growth. Kyung Choi, a researcher at Heungkuk Securities, analyzed, "They have secured key success factors in the AI semiconductor IP market, including strategic partnerships with global major companies such as Samsung, TSMC, SK, Hyundai Motor, and Micron. We expect an increase in IP prices, growth in IP licenses based on partnerships, and royalty increases through expansion of new clients in fabless and design houses."