[Click e-Stock] "Eugene Technology Emerges as Leading DRAM Equipment Stock"

On October 20, Korea Investment & Securities analyzed that Eugene Technology is emerging as the biggest beneficiary of the current DRAM investment cycle, as it supplies equipment to all three major global memory semiconductor companies. The firm raised its investment opinion to 'Buy' and increased its target price to 108,000 won.

Chae Minsook, a researcher at Korea Investment & Securities, stated, "Eugene Technology supplies equipment to all three DRAM companies, including Samsung Electronics, SK Hynix, and Micron." She added, "The company is expected to benefit the most in this cycle, where both DRAM process conversion and capacity (Capa) expansion are occurring simultaneously."

While third-quarter results are expected to remain at a similar level to the second quarter, significant growth is anticipated starting in the fourth quarter. Chae explained, "Sales are expected to grow from the fourth quarter when Samsung Electronics' P4 and SK Hynix's M15x investments are in full swing. In addition, Micron's new fiscal year, which began in September, features a reset of U.S. government subsidies and an increase in equipment purchases at the beginning of the year, which will further contribute to sales."

Another strength of Eugene Technology is the expanding range of equipment applications as processes advance. Chae noted, "The company's greatest strengths are that it supplies equipment to all three DRAM companies and that the applications of its equipment are steadily expanding at advanced nodes."

The company's main equipment, LPCVD, which currently accounts for more than half of its sales, is diversifying its process categories, and the number of layers where Epitaxy equipment is applied continues to increase due to DRAM miniaturization. She added, "The company is already expanding its market share across various layers, not only in the most advanced 1c-nanometer process but also in the subsequent 1d-nanometer technology."

Overseas subsidiaries and the materials business segment are also showing improved performance. Eugene Technology’s U.S. subsidiary, Eugeneus, turned a profit in the second quarter of this year and is expected to further expand its profit scale. In addition, EGTM, the materials division handling precursors, is still small in sales but is recording a high operating margin of about 30%. Chae stated, "The company is pursuing sales growth through diversification of process materials in the future."

She added, "Investments in process conversion and capacity expansion, driven by increased demand for both HBM and conventional DRAM, are expected to continue through 2028."