[Click eStock] "Dreamtech Completes Memory Module Qualification for 2 Global Big Tech Firms... Full-Scale Mass Production Set for Q4"

Dreamtech is accelerating its efforts to secure new growth engines by conducting memory module qualification tests for global big tech clients. With the expansion of its manufacturing plant in India set to be completed next month, it is anticipated that full-scale mass production of its memory module business will commence in the fourth quarter of this year.

Independent research firm ValueFinder analyzed on August 27 that Dreamtech has completed memory module qualification tests for two out of the six major global big tech companies.

Founded in 1998 and listed on the KOSPI market in 2019, Dreamtech is a manufacturer and developer of information technology (IT) component modules primarily supplying Samsung Electronics. As a key vendor for Samsung Electronics’ Mobile eXperience (MX) division, it provides integrated modules for the lower part of smartphones and fingerprint recognition sensor modules, among others.

Dreamtech’s business segments include IT & Mobile Communications (IMC), Bio·Healthcare & Convergence (BHC), and Camera Module (CCM). As of the first half of this year, IMC accounted for 47.3% of sales, CCM for 36.9%, and BHC for 15.8%.

Dreamtech entered the memory module business by establishing India as a new manufacturing base amid Samsung Electronics’ efforts to diversify its memory module production sites.

After being selected as a vendor for Samsung Electronics’ Device Solutions (DS) division in January last year, Dreamtech sequentially obtained approvals for major products such as RDIMMs for servers, UDIMMs for PCs, and SoDIMMs for laptops. Mass production began in November last year.

The company is also expanding its global customer base. Dreamtech is currently pursuing its own approval process with six North American global big tech companies. For server companies in India and China, no additional qualification testing is required, enabling Dreamtech to supply products first, secure a quality track record, and subsequently pursue approvals from global big tech clients in sequence.

At present, qualification tests have been completed for two out of the six companies. The timing for expanding production capacity has also been moved up, as global memory supply shortages have increased the need for both end customers and Samsung Electronics to secure production capacity early. The planned expansion of the Indian plant, initially set for 2027, has been advanced to September this year.

In fact, Dreamtech India’s revenue rose from 9.1 billion won in the first quarter of this year to 13.6 billion won in the second quarter, marking a 49.4% increase, signaling a significant ramp-up in memory module output.

ValueFinder estimated that Dreamtech’s memory module sales will exceed at least 100 billion won this year. If the expanded production line operates at full scale next year, sales could reach around 400 billion won.

It is also analyzed that the memory module business is promising in terms of profitability compared to the existing smartphone parts business. This is because memory modules for servers, PCs, and laptops have relatively standardized specifications, enabling repeated production.

ValueFinder researcher Jeon Woomin said, “Since the specifications for memory modules for servers, PCs, and laptops are standardized and suitable for repeated production, manufacturing efficiency and profitability will be higher than for existing smartphone components.”

The company is also strengthening its shareholder return policy. In March, Dreamtech revised its articles of incorporation to stipulate the cancellation of treasury shares within one year. Then, in May, it canceled about 25.1 billion won worth of treasury shares, marking the largest cancellation since its listing.

In July, the company signed an additional trust contract to acquire treasury shares worth 5 billion won, and as of the 26th of this month, had executed 89.8% of the contract amount.

Researcher Jeon predicted, “With the expansion of the Indian plant in September and additional final customer approvals, the second half of the year will be a period of revaluation for Dreamtech.”

Accordingly, it is noteworthy whether Dreamtech will be able to secure memory modules as a new growth axis in addition to its existing IT parts business for Samsung Electronics. In particular, if the expansion of the Indian facility and additional approvals from global big tech clients lead to actual mass production and increased sales, the contribution of the memory module business to overall growth is expected to increase rapidly.

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