Big Tech Rushed In Before Contract Expiry... Sapien Semiconductor Grows Rapidly with AR Glasses

Stock Price Up 44.7% This Year
US Big Tech Requests Doubling of Contract Size
Annual Double-Digit Growth Expected with Core AR Glasses Technology

As smart glasses are expected to replace smartphones in the future, global IT companies are continuing to invest. Optimistic forecasts are also emerging for Sapien Semiconductor, a key component supplier for smart glasses. Once Meta and Google begin full-scale distribution of smart glasses, Sapien Semiconductor's sales are expected to increase rapidly.

According to the financial investment industry on the 18th, Sapien Semiconductor's stock price has risen 44.7% since the beginning of this year. Considering that the KOSDAQ index rose 9.6% during the same period, the market-beating return is 35.1 percentage points.

Sapien Semiconductor is a fabless company that designs display driver integrated circuits (DDIC). Last year, it recorded sales of 8 billion KRW and an operating loss of 3.3 billion KRW. Sales increased by 149% compared to the previous year, and the loss scale decreased.

Eugene Investment & Securities forecasted that Sapien Semiconductor will successfully turn profitable this year and that sales will increase significantly. They projected sales estimates of 18.8 billion KRW for this year, 42.8 billion KRW in 2026, 108.8 billion KRW in 2027, and 290.5 billion KRW in 2028. They expect growth of more than double each year.

Earlier, in August last year, Sapien Semiconductor signed a joint development and supply contract for display driver chips with a major US big tech company. The contract was worth 4.8 billion KRW and was set to last until October 31 of this year. On the 14th, at the request of the US big tech company, Sapien Semiconductor announced that the contract amount would be increased to 9.5 billion KRW and the contract period extended until May 27 next year.

Jongseon Park, a researcher at Eugene Investment & Securities, explained, "As the third-generation augmented reality (AR) devices are expected to be fully launched in 2027, Sapien Semiconductor's components appear to be included in prototypes," adding, "By the end of next year, they will supply products for third-generation AR devices to a global big tech company."

Since AR glasses and smart glasses are used outdoors, visibility is important. Investments are being made to apply technology that implements display pixels using micro LED. This is why big tech companies are rushing to expand existing contracts and secure Sapien Semiconductor's technology. Based on a digital pixel circuit with embedded memory (MIP), Sapien Semiconductor can reduce power consumption by up to 75% compared to competitors. It has secured a mass production yield more than 30 percentage points higher than competitors and reduced costs by up to 50%, thus establishing competitiveness.

The smart glasses market is expected to grow rapidly. Since Meta unveiled the AR glasses 'Orion' last September, the related industry has evaluated it as a product that will ultimately replace smartphones. Development of AR glasses products utilizing artificial intelligence (AI) is actively underway. Google has also introduced smart glasses equipped with displays, and Samsung Electronics is preparing smart glasses utilizing Galaxy AI.

Seungsu Yang, a researcher at Meritz Securities, analyzed, "With the full-scale mass production of AR glasses starting in 2026, explosive external growth of Sapien Semiconductor is expected," adding, "Given the fabless company's characteristic of having a relatively small break-even point (BEP) sales scale, profit growth will accompany sales growth."