DI Hits 52-Week High Driven by HBM Inspection Equipment

Stock Price Up 72% Since September
Performance Boosted by Supplying HBM3E Wafer Testers
Quality Certification Underway for HBM4 Testers

The stock price of DI, a semiconductor inspection equipment manufacturer, is rising rapidly. This is the result of the company continuing its growth trajectory in the second quarter following a strong first quarter, delivering results that exceeded market expectations. With growing confidence that performance will continue to improve through next year, the company's market capitalization has surpassed 600 billion won.

According to the financial investment industry on October 14, DI's stock price has risen by 72% compared to the end of August. During the previous trading session, it hit a new 52-week high, reaching as much as 23,250 won during intraday trading. During this period, foreign investors and institutional investors recorded net purchases of 5.9 billion won and 4.4 billion won, respectively.

Since developing a mass-production Burn-In Tester in 1993, DI has maintained its competitive edge to this day. Its burn-in boards, which are consumable components, hold the largest market share in Korea. In 2017, the company succeeded in localizing NAND wafer testers. Wafer testers are devices that inspect the electrical characteristics of wafers before they are cut into individual chips. Through ongoing technological collaboration with clients, DI developed and began supplying DDR5 wafer testers last year. On a consolidated basis, DI recorded sales of 229.3 billion won and operating profit of 22.2 billion won in the first half of this year. In the second quarter, sales reached 119.2 billion won and operating profit was 12.2 billion won. These figures represent increases of 159% and 1,198%, respectively, compared to the same period last year.

Its subsidiary, Digital Frontier, primarily manufactures wafer testers and burn-in testers. Its main customer is SK Hynix. Starting this year, it has expanded its business scope to include high bandwidth memory (HBM). The company is also mass-producing HBM wafer testers.

Before Digital Frontier succeeded in localizing wafer testers, SK Hynix sourced its memory wafer inspection equipment from Advantest of Japan. Digital Frontier began supplying NAND line equipment to SK Hynix in 2018, and since last year, it has also been supplying DRAM wafer testers.

Digital Frontier has also signed a supply contract with SK Hynix for fifth-generation HBM3E wafer testers. The total value of the supply contracts, including HBM3E wafer testers for SK Hynix, DDR5 wafer testers, and burn-in testers, amounts to 246.6 billion won.

In March of this year, Digital Frontier supplied SK Hynix with samples of sixth-generation HBM4 wafer testers. Quality certification (qualification) testing is currently underway. Lee Sangheon, a researcher at iM Securities, explained, "If Digital Frontier passes the quality certification test for the HBM4 wafer tester, it will drive performance improvement next year," adding, "Operating profit will exceed 40 billion won this year, and next year's operating profit is expected to approach 50 billion won."