Systems Technology Incorporated

STI is a fab-infrastructure equipment company whose core business is the Chemical Central Supply System (CCSS), which automatically delivers high-purity chemicals required in semiconductor and display manufacturing processes.

The company manufactures and supplies front-end infrastructure equipment used in semiconductor and display fabs, and CCSS accounted for 92.2% of revenue as of the third quarter of last year, per company disclosures.

According to the 2024 annual report, CCSS represented 86% of revenue, indicating that the product mix shifts somewhat depending on the capex cycle of semiconductor and display customers.

The remainder of revenue comes from the Wet System business, which covers cleaning, development, and etching, plus flux and fluxless reflow equipment used in HBM stacking processes; in 2024 the wet system division generated roughly KRW 28.7bn in revenue, of which reflow equipment was estimated at around KRW 10bn.

Key customers include global chipmakers Samsung Electronics, SK hynix, Micron, and Intel, as well as China's largest display maker BOE.

More recently, the company developed new heat-dissipation component manufacturing equipment for power semiconductors and is expanding into this market through its China joint venture Nova Tech Semiconductor (NTS), co-established with China's TCOT to produce active metal brazed (AMB) heat-sink substrates used in electric vehicles, data centers, and renewable energy applications.

Separately, STI is developing ceramic interposer technology through a national R&D project to address changes in the HBM and packaging market, aiming to expand into a comprehensive semiconductor materials and equipment company spanning both power and memory semiconductor components.

Given the heavy weighting toward CCSS, the company's earnings remain highly sensitive to the capital expenditure cycles of its semiconductor and display customers.

Annual results show STI peaked in 2022 with revenue of KRW 422.4bn and operating profit of KRW 34.8bn (an 8.2% operating margin), before revenue declined to KRW 319.5bn and operating profit fell to KRW 23.9bn in 2023.

In 2024, revenue recovered modestly to KRW 334.0bn with operating profit of KRW 27.3bn and an 8.2% margin, but in 2025 revenue slipped again to KRW 328.1bn, operating profit fell to KRW 19.7bn, and the operating margin narrowed to 6.0%.

Net income attributable to owners also dropped sharply, from KRW 27.1bn in 2024 to KRW 15.4bn in 2025, suggesting additional pressure below the operating-profit line beyond the margin decline.

On a quarterly basis, revenue of KRW 87.2bn and operating profit of KRW 5.4bn in 2025Q2 were followed by a pullback to KRW 70.3bn in revenue and KRW 2.3bn in operating profit in 2025Q3, even as net income edged up slightly to KRW 2.5bn.

The fourth quarter of 2025 saw a clear rebound, with revenue of KRW 86.5bn, operating profit of KRW 6.8bn, and net income of KRW 7.4bn, which helped defend full-year results.

However, in 2026Q1, despite revenue of KRW 73.8bn, operating profit plunged to roughly KRW 0.36bn, pushing the operating margin below 1%, while net income of KRW 5.1bn held up relatively better.

In 2026Q2, revenue was KRW 72.5bn with operating profit of KRW 2.9bn (an operating margin of about 4.0%) and net income of KRW 4.3bn, showing some operational recovery.

This pronounced quarter-to-quarter volatility reflects the order-driven nature of the business, where revenue recognition on large equipment supply contracts such as CCSS tends to concentrate in specific quarters.

The fab-infrastructure equipment market STI operates in continues to grow on the back of rising AI chip demand, expanding data center infrastructure, and surging high-bandwidth memory (HBM) demand, which is translating into increased orders for its core CCSS and Wet System products.

Because CCSS is infrastructure-type equipment typically ordered early in the construction or expansion of a semiconductor fab, capex decisions by domestic memory makers such as Samsung Electronics and SK hynix flow directly into order intake.

STI entered the semiconductor main-process equipment market in 2013 and has since expanded its product lineup beyond CCSS to include development, cleaning, and etching systems as well as lead-free vacuum reflow equipment.

Competitively, STI competes with other domestic materials, parts, and equipment suppliers in the CCSS segment, while in HBM wet reflow equipment it has held an exclusive supply relationship with SK hynix, indicating an established technical position in certain customer and process niches.

More recently, the company has moved beyond its traditional semiconductor and display focus into the adjacent power semiconductor heat-dissipation equipment market, an attempt to ride a separate growth axis driven by rising power semiconductor demand from electric vehicles, data centers, and renewable energy infrastructure.

At the same time, because CCSS still accounts for the bulk of revenue, the industry structure leaves the company exposed to greater earnings volatility whenever the capex cycle of its semiconductor and display customers slows.

In December 2025, the company signed a KRW 97.84bn power semiconductor equipment supply contract with its China joint venture Nova Tech Semiconductor (NTS), with the contract period running from December 5, 2025 to September 4, 2027.

Through this project, the company stated it plans to build an automated in-line facility in stages, targeting mass production starting in 2027 and an ultimate capacity of 210,000 power semiconductor heat-dissipation components per month.

In February 2026, the company also signed an investment agreement with Guangzhou's Baiyun district in Guangdong, China, to build an equipment manufacturing base for power semiconductors, with Reuters reporting a first-phase investment of RMB 1.6bn (roughly KRW 337bn) to establish manufacturing facilities for active metal brazed (AMB) heat-sink substrates used in electric vehicles and other applications.

Dawoo Investment & Securities characterized the NTS order in a December 9, 2025 report as the company's first entry into the new power semiconductor process equipment market, describing it as a reference case that could lead to expansion with major global customers.

On the existing semiconductor and display side, the company signed an additional KRW 39.47bn equipment supply contract with Samsung Electronics in April 2026, covering the period from April 10 to November 30, 2026.

These new orders show that the CCSS- and Wet System-centered core business remains active, while also underscoring that how much and when the power semiconductor growth axis converts into actual revenue remains a key variable for future results.

Parallel development of new technologies such as ceramic interposers through national R&D projects suggests continued portfolio diversification over the medium to long term.