[Special Stock] OrosTech, National Strategic Technology HBM... Only Domestic Technology with 14x Profit Increase

Oros Technology is showing strong performance. The news that high-bandwidth memory (HBM) related technology is included in the national strategic technology scope for the semiconductor sector appears to be influencing the stock price. Overlay equipment is mainly used in the front-end process (lithography), but recently, due to the trend of increased investment in HBM processes, the introduction of equipment in the back-end process (packaging) is expanding.

As of 10:01 AM on the 24th, Oros Technology is trading at 33,600 KRW, up 13.32% from the previous day.

According to the ‘2023 Revised Tax Law Follow-up Enforcement Decree Amendment’ announced by the Ministry of Economy and Finance, the scope of national strategic technologies eligible for tax credit benefits on R&D investment has been expanded. In the semiconductor sector, next-generation memory semiconductor design and manufacturing technologies, including HBM, have been added. HBM is a memory semiconductor mainly used in the artificial intelligence (AI) field. Demand is rapidly increasing.

Yoon Cheol-hwan, a researcher at Korea Investment & Securities, explained, "The overlay market is dominated by global companies K and A," adding, "The IBO (Image Based Overlay) method was a market monopolized by company K, but Oros Technology is the first and only domestic company to successfully localize it."

He continued, "Overlay measurement equipment is used during the lithography process to measure and control vertical stacking alignment and misalignment in the circuit pattern formation and stacking process," adding, "It is essential equipment directly linked to yield during semiconductor device production."

Overlay equipment is also used in the silicon through via (TSV) process for manufacturing high-bandwidth memory (HBM).

He introduced, "There are products such as the 'OL-900 NW,' used for alignment and size measurement of lower patterns and bump patterns during the memory vertical stacking process using TSV and micro bumps, and the 'WaPIS-30,' a wafer inspection equipment that checks wafer warpage caused by temperature differences." Furthermore, he said, "The next-generation product of the current flagship OL-900n, the OL-1000n, will be launched in the first quarter of this year," and predicted, "It will start being delivered to customers by the first half of the year at the latest, increasing the share of next-generation products among domestic customers."

It is estimated to achieve sales of 65.9 billion KRW and operating profit of 11.1 billion KRW this year, representing increases of 54.1% and 1336.1%, respectively, compared to last year. Researcher Yoon analyzed, "Profitability improvement due to the advancement of flagship products, sales growth from the expansion of the back-end lineup, and the resulting operating leverage effect will be maximized."

Oros Technology, which had a high dependence on SK Hynix, attracted Samsung Electronics as a new customer from the end of last year. In October and November of last year, contracts were signed to supply equipment worth 2.1 billion KRW and 8 billion KRW, respectively, to Samsung Electronics. Oros Technology opened a new trading channel by supplying two front-end overlay equipment units to Samsung Electronics in 2022. With the new supply contract for packaging equipment, transactions between the two companies are expected to increase.

Oh Hyun-jin, a researcher at Kiwoom Securities, explained, "As advanced packaging technology becomes more important due to recent expansion of HBM process investment, the introduction of overlay equipment in the back-end process is rapidly increasing," adding, "Oros Technology is expanding its back-end equipment lineup by securing orders for the ‘WaPIS-30,’ which inspects wafer warpage phenomena, targeting major customers in addition to the packaging overlay equipment ‘OL-900nw.’"