[Exclusive] PCB Specialist Tiger Elec Signs Supply Contracts with FormFactor and TechnoProbe

First in Domestic PCB Industry... Recognized for Technical Skills and Production Capacity
Expecting 10 Billion KRW Sales Increase This Year... High Margin Securing Also Possible

Tiger Elec, a specialist in printed circuit boards (PCBs), has signed supply contracts with leading global companies. The partners include FormFactor and Intel from the United States, and Technoprobe from Europe. Notably, the supply contracts with FormFactor and Technoprobe are the first of their kind in the domestic industry.

According to the investment banking (IB) sector on the 14th, Tiger Elec recently finalized supply contracts with these three global companies and has begun product manufacturing. Under non-disclosure agreements (NDAs), product supply is expected to commence as early as this month. Tiger Elec operates factories worth approximately 40 billion KRW each in Korea and Vietnam. All orders received at the Korean factory will be produced there, with any shortfall manufactured in Vietnam. The scale for each company is about 3 billion KRW in the first contract year, with a total expected sales increase of 10 billion KRW.

An IB industry insider stated, "Since PCBs have short lead times, production is currently underway, and supply will occur within a month. We expect a sales increase of 10 billion KRW in the first year, and with stable partnerships maintained with the three companies, supply volume is expected to grow, potentially generating sales in the hundreds of billions of KRW."

Tiger Elec company exterior. Photo by Tiger Elec

Tiger Elec's supply contracts with these three global companies are unprecedented in the domestic PCB market. Although PCBs are fundamental components of the IT industry, the Korean PCB sector has traditionally lagged behind leading companies from the US, Japan, and Taiwan. The global PCB market leaders include Harbor from the US, and Fujitsu and Hitachi from Japan. A hallmark of these leading PCB companies is that global IT firms provide customized designs to each PCB manufacturer, who then produce tailored products. This approach yields high margins and stable revenues.

The Korean PCB industry has shown a lack of investment in PCBs, which are foundational to the IT sector, resulting in a lag behind the US, Japan, and Taiwan. Since the COVID-19 pandemic disrupted global supply chains, IT companies have proactively secured orders and supply chains for PCBs, leading to a medium- to long-term shortage of PCBs. This is why companies like LG Innotek, Samsung Electro-Mechanics, SEMCO, and Daeduck Electronics have rushed to invest recently.

Especially after Harbor was acquired by a Chinese company, additional orders were requested from Japanese firms in the US and elsewhere, but due to insufficient production capacity, opportunities shifted to Korean companies. Tiger Elec, in particular, has consistently developed technology and aggressively invested in leading products. Global IT companies, noticing this, have sent love calls to Tiger Elec, leading to the start of product manufacturing.

Technoprobe is the global leader in non-memory test solutions and specializes in the non-memory industry. Tiger Elec has received customized designs from this company and has begun full-scale product manufacturing. FormFactor is the largest US company in memory and non-memory test solutions and has traditionally not used PCBs outside the US, Taiwan, and Japan. After passing qualification this year, Tiger Elec succeeded in securing orders and has started full-scale product manufacturing.

A securities industry official said, "By supplying to the global IT industry, Tiger Elec is expected to record its best-ever performance this year, regardless of the downturn in the domestic memory industry." The industry estimates this year's expected sales at about 70 billion KRW. Last year, sales were approximately 60 billion KRW. Given the supply of high-difficulty products, high margin acquisition is also anticipated, suggesting that operating profits will increase going forward.