Qualitas, Rights Offering Six Months After IPO... Intense R&D Competition

Plan to Raise 59.5 Billion KRW Through Rights Offering
Essential to Secure Technology in Rapidly Changing Semiconductor Market
Stock Price Plummets Due to Sudden Fundraising News

Qualitas Semiconductor, which was listed on the KOSDAQ market last October, has launched a large-scale fundraising effort. Despite having more than 25 billion KRW remaining from the funds raised through its initial public offering (IPO), the board of directors decided to raise additional capital to actively respond to the rapidly changing semiconductor market. The unexpected news of a rights offering caused the stock price to plummet.

According to the Financial Supervisory Service's electronic disclosure system on the 9th, Qualitas will issue 0.236 new shares for every one existing share, raising 59.5 billion KRW. The planned issue price for the new shares is 23,000 KRW, about 35% higher than the public offering price of 17,000 KRW at the time of last year's listing.

The funds raised through the rights offering will be used for ▲ next-generation product development costs ▲ innovation of development processes utilizing artificial intelligence (AI) ▲ establishment costs for overseas research and development (R&D) facilities. Qualitas management judged that it is crucial for future growth to quickly develop chiplet standard specification (UCIe PHY) intellectual property (IP), which has been newly established with participation from major semiconductor companies such as Samsung Electronics, NVIDIA, Intel, ARM, and TSMC.

A Qualitas representative also explained, "NVIDIA is designing its next-generation Blackwell graphics processing unit (GPU) based on chiplets," adding, "Samsung Electronics Foundry, as well as TSMC and Intel, are competitively developing UCIe IP, a chiplet-dedicated interface IP."

In May last year, Qualitas was selected as the lead research and development institution for the project titled 'Development of Interface IP and Silicon Photonics Application Technology for AI and Automotive System-on-Chip (SoC) Chiplet Interface,' led by the Ministry of Science and ICT. While carrying out the project, they secured basic research data necessary to develop UCIe PHY IP. A company official stated, "PHY IP is a high-cost IP that is only partially mass-produced overseas," and added, "If mass production is successful, we expect a significant improvement in performance." Furthermore, they said, "Qualitas has started efforts to preoccupy the chiplet market" and "Mass production supply is expected as early as the second half of next year." PHY IP is responsible for the physical transmission of data, that is, converting digital signals to analog or vice versa, enabling actual data transmission.

As Qualitas enters the AI era, semiconductor technology trends are rapidly changing, and they see expanded investment as inevitable. With the chiplet ecosystem blooming faster than expected this year, they explained that they cannot delay the timing of investment and thus are raising funds for R&D costs. Entering the AI era has led to a surge in demand for ultra-high-speed data transmission due to massive computations. Developing various ultra-high-speed interface IPs has become important.

To prove competitiveness in the global AI market, it is necessary to secure UCIe PHY IP across various foundry processes. Qualitas has established a dedicated UCIe team and plans to secure R&D personnel. Approximately 40 billion KRW of the funds raised through the rights offering will be used for labor costs to secure R&D personnel and prototype production expenses.

Meanwhile, the unexpected decision to raise funds and news that the largest shareholder will subscribe to only about 5% of the newly allocated shares caused the stock price to drop more than 20% the previous day. If there are remaining shares after the subscription by existing shareholders and the general public offering, NH Investment & Securities will underwrite them. The forfeiture fee is 10.0%.