[Click e-Stock] "Neotis to Benefit from PCB Drill Bit Supply Shortage"

On December 15, Meritz Securities stated that Neotis is expected to be re-evaluated as the only domestic manufacturer of drill bits in South Korea.

Printed circuit board (PCB) drill bits are essential consumables used to process via holes for circuit connections within the board. Precision in micro-machining during the drilling process and wear resistance are key factors that determine quality and productivity.

Yang Seungsoo, a researcher at Meritz Securities, explained, "Recently, with the increase in demand for PCBs used in artificial intelligence (AI) servers and high-speed switches, the structural shortage of drill bits is accelerating."

He added, "As PCBs become more multilayered and larger in area, and as the hardness of copper-clad laminates (CCL) increases to support high-speed transmission, the wear rate of drill bits has increased. In the past, a single drill bit could process two to three PCBs, but now, it takes two to three drill bits to process just one PCB."

Researcher Yang analyzed, "Neotis primarily manufactures micro drills for PCB processing and shafts for automotive motors. In the micro drill bit sector, it is the only PCB drill bit manufacturer in South Korea."

He emphasized, "The company has secured many major domestic PCB manufacturers as clients. Its core competitiveness lies in superior technology compared to Chinese companies and faster customer responsiveness compared to Japanese companies."

He further explained, "Recently, in the global drill bit shortage environment, Japanese companies have been experiencing delays in quality response and delivery adjustments. This is creating opportunities for Neotis to expand its orders."

He estimated that next year, Neotis will achieve sales of 88.8 billion won and operating profit of 16 billion won. This represents an increase of 27.7% and 88.7%, respectively, compared to this year’s forecasts.