[IPO] TSMC Partner Aiceland to Lead AI Semiconductor Market Through IPO

Challenging KOSDAQ Market as an On-Demand Semiconductor Design Solution Company
Serving as a Bridge Between Foundry and Fabless Companies... "Full-Scale Entry into the US Market"

Ajicland, an official partner (VCA·Value Chain Alliance) of TSMC, the world's largest semiconductor foundry, is set to be listed on the KOSDAQ market. Samsung Securities, the lead underwriter, selected overseas companies such as Taiwan's Alchip Technology, Global Unichip, and China's Faraday Technology Corporation as comparable companies to appropriately assess Ajicland's corporate value.

According to the Financial Supervisory Service, Ajicland, an application-specific integrated circuit (ASIC) design solution company, plans to offer 2.64 million new shares for its KOSDAQ listing. The expected price range is KRW 19,100 to KRW 21,400 per share, with a total offering size of KRW 50.4 billion to KRW 56.4 billion. From the 23rd to the 27th of next month, a five-day demand forecast will be conducted targeting institutional investors to finalize the offering price.

Founded in 2016, Ajicland acts as a bridge between foundry (production-specialized) and fabless (design-specialized) companies. It provides optimized design services tailored to each foundry's production process for products designed by fabless companies. Based on its core partnership with TSMC, Ajicland has secured major clients in the 4th industrial revolution sectors such as artificial intelligence (AI) semiconductors and 5G.

A representative from Samsung Securities stated, "As the growth rate of ultra-high-speed and highly integrated AI semiconductors accelerates, preference for TSMC, which possesses a wide range of processes, is increasing. Ajicland has the capability to compete with TSMC partners like GUC and Alchip and to emerge as a global design house."

Ajicland has been recognized for its technological competitiveness through mass production of high-band base station 5G radio frequency (RF) chips and commercialization of AI semiconductors. The appropriate corporate value for the initial public offering (IPO) was estimated at KRW 331.5 billion. The average price-to-earnings ratio (PER) of comparable companies Alchip, Unichip, and Faraday, which is 53.7 times, was applied. Although the per-share valuation was KRW 30,098, a discount rate of 31?38% was applied to propose the expected offering price range.

The underwriters selected comparable companies among official partners of global foundries such as TSMC and Samsung Electronics, considering financial and business structure similarities. Besides the final three companies, Gaonchips and Verisilicon Microelectronics were also considered. However, they were excluded from the comparable group after confirming their stock prices exceeded a PER of 100 times. Gaonchips was listed in May last year at an offering price of KRW 14,000 per share. Currently, after one year and four months, its stock price exceeds KRW 38,000.

Ajicland's sales increased by 55%, from KRW 42.2 billion in 2021 to KRW 65.6 billion last year. Operating profit rose from KRW 2.8 billion to KRW 10.9 billion during the same period. In the first half of this year, it recorded sales of KRW 34 billion and operating profit of KRW 2.5 billion. As of last month, its order backlog stood at KRW 110 billion, indicating continued external growth. The proportion of AI semiconductor projects is increasing.

CEO Lee Jong-min of Ajicland explained, "Through the IPO, we will make a full-scale entry into the U.S. market and grow into a global design house as the leading representative of TSMC VCA." The founder, CEO Lee, previously worked as a researcher at SK Hynix, VirtualDime, HumanChips, and DarwinTech. After listing, CEO Lee's shareholding ratio will be 24.28%.

The funds raised through the IPO will be used for operating capital and debt repayment. Due to the nature of the design house business, when conducting specific projects, the design house must directly pay wafer costs to the foundry. Revenue is recognized after completing the semiconductor chips and selling them to fabless customers. The design house must hold working capital, including wafer costs payable to the foundry. Ajicland allocated KRW 16.4 billion as working capital for project mass production. It also plans to hire new personnel following the listing, continuing recruitment from the second half of this year through 2026. KRW 4 billion of the raised funds will be used to repay debt. CEO Lee stated, "We will complete the KOSDAQ listing within this year and proceed with U.S. market entry, business advancement, and strengthening global competitiveness."