[Click e-Stock] Semiconductor Equipment Companies Set to Benefit from Price Hikes and Capacity Expansion

Hana Securities has raised its target price for Daeduck Electronics from 170,000 won to 250,000 won, while maintaining its buy rating.

On June 16, Min Kyung Kim, a researcher at Hana Securities, stated, “Profitability improvements from price hikes are becoming visible, and large-scale capacity expansions are providing clear mid- to long-term growth visibility.”

Daeduck Electronics’ sales for the second quarter of this year are projected to reach 372.6 billion won, up 52% year-on-year, while operating profit is expected to surge 3,236% over the same period to 62.4 billion won. Kim explained, “Price increases across all product lines and product mix improvements have been factored in. For FCCSP, strong demand for automotive semiconductors such as radar sensors and ADAS has led to a positive product mix effect driven by higher specifications, resulting in the largest price increases among all product categories.”

Kim further added, “In addition, prices for memory package substrates, FCBGA, and MLB have also been raised to reflect higher raw material costs, and the substrate and MLB markets remain supplier-driven due to deepening supply shortages.”

Securing mid- to long-term growth visibility through large-scale capacity expansion is also significant. Last month, Daeduck Electronics announced a facility investment of 213 billion won, which will be used for infrastructure investments in new memory package substrate and FCCSP production facilities. Kim noted, “The new production facility will be housed in an eight-story building, and considering the inclusion of office space, production capacity is estimated to expand by about 80% compared to the existing facilities (two four-story buildings). Gradual operation is expected to begin in the second half of next year.”

He also analyzed, “For FCBGA, the previously postponed 80 billion won investment is now being focused on upgrading production equipment for mass production of large-area substrates. For MLB, the expansion of production capacity has been smoothly completed and is gradually ramping up.”

This content was produced with the assistance of AI translation services.