[Click e-Stock] "Seokyung AT Seen Benefiting from Data Center Noise Regulations... Transformer Damping Materials in Focus"

As regulations on data center construction in the United States tighten, Seokyung AT is attracting attention for developing nanomaterials that reduce low-frequency noise from transformers. Analysts say the company could secure a medium- to long-term growth engine by expanding into the power infrastructure market, in addition to growing its existing dental materials and toner external additives businesses.

On November 12, Research Al-eum initiated coverage of Seokyung AT with a "Positive" rating and a target price of 60,000 won. This represents 110.5% upside from the share price of 28,500 won as of that day.

"Noise has emerged as a new point of concern amid the trend toward tighter regulations on data centers in the United States," said Kim Doyun, a researcher at Research Al-eum. "Because transformer noise must be reduced by limiting vibration in the core itself, Seokyung AT is expected to play a growing role through its development of nanomaterials for coating electrical steel sheets."

Seokyung AT is a nanomaterials specialist that began operations in 1994 as Seokyung Chemical. It has built in-house capabilities in four core technologies—particle size and shape control, dispersion, surface treatment, and purification—enabling it to develop and mass-produce functional materials tailored to customer requirements. The company currently serves around 180 customers in more than 30 countries, with overseas sales accounting for 61% of revenue in 2025. Its dental customers include global companies such as Dentsply Sirona, Carestream, and GC, while its electrical and electronics customers include Samsung Electro-Mechanics, Canon, and LG Innotek.

Growth in its existing businesses is also expected to support the company. YbF3 and BAG·SRG, its dental materials with the largest shares of sales, are materials that enhance X-ray contrast and mechanical strength, respectively. In particular, demand for filler materials supplied to Company S, a U.S. dental 3D-printing solutions provider, is expected to rise repeatedly as the company expands sales of its equipment overseas. Seokyung AT also expects to expand its toner external additives supply channels beyond Handan, China's leading toner original equipment manufacturer (OEM), to Canon in Japan. It is also pursuing entry into the global market for composite pigments used in cosmetics.

Materials for damping transformer vibrations are seen as a new growth engine. As artificial intelligence (AI) data centers expand into areas close to residential neighborhoods, noise from transformers, as well as from cooling equipment and generators, is becoming a source of conflict with local residents. Transformer cores vibrate minutely while electricity is flowing, generating low-frequency noise around the clock. Since ordinary noise barriers are not effective at blocking low-frequency noise, technologies that reduce noise at its source are important.

Seokyung AT is developing nanomaterial-based damping materials for use in the insulation coating of transformer electrical steel sheets and is conducting pilot tests with major domestic transformer manufacturers. Research Al-eum forecast that the test results could be available by the end of 2026 and that the company could enter the market starting in 2027.

"Loudoun County, Virginia, the largest data center hub in the United States, is pursuing revisions to regulations on low-frequency and tonal noise," Kim said. "As regulations become more specific, the potential demand for materials that reduce vibration at the core—the source of the noise—will also broaden."

Research Al-eum conservatively estimated the global market for transformer damping materials at approximately 40.4 billion won annually. However, this estimate covers only large transformers rated at 100 MVA or more, and analysts say the market could expand depending on the scope of applications.

The outlook for earnings growth is also positive. Research Al-eum estimated Seokyung AT's 2026 revenue and operating profit at 19.9 billion won and 5.5 billion won, respectively. For 2027, it forecast revenue of 30.1 billion won and operating profit of 9 billion won, increases of 51.3% and 63.9%, respectively, from the previous year. The company is also pursuing additional new projects involving semiconductor packaging fillers, composite materials for smartphones, glass lenses for robots, and heat-dissipation materials.

"The existing mass-production businesses have strong growth visibility, and results from new businesses are also beginning to emerge," Kim said. "We expect the company to diversify its end markets, drawing on its nanomaterials expertise and mass-production capabilities, built over more than 30 years of serving global customers."

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