[Click eStock] "Atom Selected as Core Supplier for Hyundai Mobis EVs... Performance Improvement Expected with MLCC Boom"

Atom has secured a long-term growth foundation by being selected as a core parts supplier for Hyundai Mobis’s next-generation electric vehicle (EV) platform, and with the favorable performance of its subsidiary Cheonghan Electronics’s MLCC (multi-layer ceramic capacitor) business, expectations for improved results are rising, according to analysis.

On June 26, independent research firm ValueFinder stated that Atom has secured mid- to long-term growth momentum based on its contract to supply ICCU (Integrated Charging Control Unit) components for Hyundai Mobis’s EV platform. The company also projected that Cheonghan Electronics’s performance will begin to improve in earnest, driven by the MLCC price upcycle.

Founded in 2016, Atom is a specialized manufacturer of planar transformers and was listed on the KOSDAQ market in 2023 via a technology-based special listing route. It is the only domestic company to possess planar transformer technology, supplying transformers for Samsung Electronics smartphone chargers and LG Electronics TV power modules.

In the first quarter of this year, consolidated revenue reached 26.1 billion won, a 193% increase year-on-year, while operating loss narrowed to 1.4 billion won. In May last year, Atom expanded its business scope by acquiring a 50.01% stake in DST, a company that produces cylinder modules for ship engines. DST contributed to Atom’s external growth, recording sales of 16.2 billion won and net profit of 400 million won in the first quarter of this year.

Going forward, Atom is expected to continue improving profitability by expanding its existing planar transformer business as well as through the growth of the MLCC business operated by its subsidiary Cheonghan Electronics (55.59% stake).

In April, Atom was selected as a supplier of ICCU components for Hyundai Mobis’s next-generation EV platform, securing a long-term supply contract through 2033 with an annual supply capacity of up to 370,000 units.

The company’s planar transformer technology is evaluated as having overcome the limitations of previous EV components. Unlike the planar transformer structures used in products such as the Tesla Cybertruck, which were prone to component cracking due to internal heat accumulation, Atom integrated four transformers into a single structure, thereby improving heat dissipation issues.

In line with the recent trend toward manufacturing process automation, Atom also adopted a low-profile design that enables robotic arm operation, thereby enhancing mass production efficiency. In June, Atom independently developed a matrix-type transformer through industry-academia collaboration with Konkuk University, and it is reported that the company has completed the third round of verification by Hyundai Mobis. Atom is also in discussions with major global automakers.

Cheonghan Electronics, the subsidiary, is cited as a key driver of improved performance in the second half of the year. As the MLCC market enters a phase of price increases due to supply shortages and rising demand, profitability for Cheonghan Electronics, which engages in distribution, is likely to improve.

Given the nature of the materials and components industry, margin improvement typically follows price hikes for customers, so a recovery in the MLCC market is expected to have a positive impact on performance. Cheonghan Electronics has also proactively secured inventory in anticipation of a market upturn similar to the boom period in 2018.

Lee Chungheon, a researcher at ValueFinder, stated, "Being selected as an ICCU parts supplier for Hyundai Mobis signifies that Atom’s planar transformer technology has been officially validated in the core EV components sector. With the long-term supply contract running through 2033, there is also potential for expansion to global automakers."

He added, "With the MLCC industry expected to enter a cycle reminiscent of the 2018 boom, and Cheonghan Electronics proactively securing inventory, improved performance and growth momentum may emerge simultaneously in the second half of this year. Attention should be paid to these two growth axes: the expansion of the EV transformer business and the growth of the MLCC distribution subsidiary."

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