[Click eStock] "ITM Semiconductor, the Real Beneficiary of On-Device AI... Target Price Up"

Target Price Raised by 29% Compared to Previous Level

On the 17th, KB Securities raised the target price for ITM Semiconductor from 28,000 KRW to 36,000 KRW, citing expected benefits from on-device artificial intelligence (AI). The investment rating was maintained as 'Buy.'

Lee Chang-min, a researcher at KB Securities, explained, "The reason for raising the target price is that with the launch of a new electronic cigarette device becoming visible, we have increased the 2025 operating profit estimate by 17%. Additionally, with the emergence of the on-device AI market, an upward trend in demand for smartphones and protection circuit packages (PMP) is expected, leading us to revise the medium- to long-term earnings estimates upward."

ITM Semiconductor's second-quarter performance this year is expected to improve compared to the previous quarter. The researcher stated, "ITM Semiconductor's second-quarter sales are estimated at 145.6 billion KRW, an increase of 2.7 billion KRW year-on-year, with an operating loss of 2.4 billion KRW, indicating continued deficits. However, as sales from North American customers' new smartphone products begin to be reflected and protection circuits start to be supplied to domestic customers' clamshell-type foldable phones, performance improvement compared to the previous quarter is possible."

KB Securities designated ITM Semiconductor as the top pick in the smartphone components sector. The researcher analyzed, "ITM Semiconductor's battery protection circuit, PMP, is more expensive than general protection circuits but has strengths in power and heat management of batteries. Through modularization of related components, it can additionally secure mounting space for parts. Currently, one of the biggest issues faced by devices using AI is high power consumption and difficulty in heat management, and PMP is one of the effective solutions to these problems." He added, "With expected expansion of penetration within domestic smartphone manufacturers, stabilization of performance toward North American customers, and increased demand and proportion of high-value-added products for on-device AI, an upward trend in ITM Semiconductor's stock price is anticipated."