[Click eStock] "TMC, Profitability Up with Semiconductor Specialty Gas Localization"

[Asia Economy Reporter Jang Hyowon] Hana Securities analyzed on the 30th that TMC is expected to achieve significant profitability improvement through the localization of synthetic gases among semiconductor specialty gases.

TMC is a specialized manufacturer of specialty gases for semiconductor and display processes. The company has secured technologies for manufacturing synthetic gases, extracting and separating rare gases from the atmosphere, and refining, mixing, and filling specialty gases, successfully localizing the entire manufacturing process of specialty gases.

TMC's main products are essential gases for semiconductor miniaturization and high integration, and growth is expected due to the advancement of semiconductor complexity and the increase in process steps. Based on cumulative sales as of the third quarter of last year, the sales composition by product was Eximer Laser 30.2%, Xe 27.1%, Kr 15.3%, CF series 17.9%, CO 4.5%, and others 5%.

Researcher Choi Jaeho of Hana Securities analyzed, "TMC will expand its product portfolio through highly profitable synthetic gases such as diborane (B2H6), carbonyl sulfide (COS), and deuterium (D2), and achieve overall profitability improvement through the localization of xenon and krypton."

First, diborane, a doping gas, is expected to see increased demand due to the rise in semiconductor process steps, with sales expected to expand from about 5 billion KRW last year to over 40 billion KRW this year. Carbonyl sulfide plans to significantly expand sales in 2024 following the completion of the CTS plant in the second half of this year.

Additionally, by extracting and distributing xenon and krypton domestically, stable supply to customers will be provided, leading to an expected increase in market share, and profitability improvement is anticipated through the rare gas raw material extraction process.

Researcher Choi stated, "TMC's estimated sales last year were 342.5 billion KRW, and operating profit was 55.8 billion KRW, representing increases of 287.8% and 351.4% respectively compared to the same period the previous year," adding, "The strong performance last year was influenced by the sharp rise in rare gas prices due to the Russia-Ukraine war and profitability improvement from the localization of new core products, moving away from a sales structure focused on low-profit products."

He continued, "This year, TMC's estimated sales are 366.8 billion KRW, and operating profit is 76.3 billion KRW, representing growth of 7.1% and 36.7% respectively compared to the previous year," forecasting, "Although sales expansion is somewhat limited due to the stabilization of rare gas prices, profit growth will remain solid as the sales mix improves with synthetic gases."