KOSDAQSemiconductors131290

Tse

₩292,000▼ 4.26%2026-10-02 close

Market Cap

₩3.2T

Turnover

₩34.5B

Volume

120,000 shares

Shares out.

11.1M

PER

24.9×

PBR

5.5×

EPS

₩9,514

Dividend Yield

0.19%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩450 per share · Prices as of the 2026-10-02 close

Report overview

DRAM and HBM Entry Reshapes the Profit Mix

TSE has widened its probe card lineup from NAND to DRAM and HBM, lifting quarterly operating margins into the high-20% range in the first half of 2026, while simultaneously taking on front-loaded capacity and headcount spending plus convertible bond obligations.

1
Second-quarter 2026 revenue reached KRW 188.8bn with operating profit of KRW 52.5bn, a record quarter, and the operating margin of 27.8% far exceeded the 11.5% full-year 2025 level.
2
Probe cards are the growth engine: reports put 2025 probe card revenue at KRW 143.4bn, up 78.7% from KRW 80.3bn in 2024, and the product accounted for 40.6% of parent-basis revenue in the first quarter of 2026.
3
Vertical integration through Tiger Elec (PCB), Megatouch (pins) and GM Test (test services) underpins cost and lead-time competitiveness, but a sizable non-controlling interest means operating profit gains do not flow fully into owners' net income.
4
In July 2026 the company issued a KRW 100bn zero-coupon, no-refixing private convertible bond, allocating KRW 50bn each to facilities and working capital; full conversion would add shares equal to 3.79% of the existing share count.
5
Earnings are highly sensitive to the memory capex cycle: in 2023 the company posted revenue of KRW 249.1bn and an operating loss of KRW 23.8bn.

Business structure

TSE supplies semiconductor test interconnection parts and equipment: probe cards used in front-end wafer inspection, interface and burn-in boards and test sockets used in back-end final test, alongside an OLED inspection equipment business.

Its subsidiary structure is distinctive, with Tiger Elec supplying the PCBs used in probe cards and interface boards, Megatouch supplying pogo pins and interposers, and GM Test providing semiconductor test services, which underpins raw-material sourcing and cost competitiveness.

The product axis is shifting from NAND toward DRAM and HBM. In January 2026 The Elec reported that TSE had passed quality tests for HBM probe cards at domestic and overseas memory makers, marking entry into a market long dominated by foreign suppliers.

In a July 2026 report, DS Investment and Securities stated that the company had secured two global DRAM suppliers as customers and begun addressing DDR4, DDR5 and HBM3E.

On the mix, first-quarter 2026 probe card revenue was reported at KRW 47.9bn, or 40.6% of parent-basis revenue, while 2025 full-year probe card revenue was reported at KRW 143.4bn versus KRW 80.3bn in 2024, up 78.7%. The competitive field is highly concentrated at the global top end.

Research firm Mordor Intelligence estimated that FormFactor, Technoprobe and Micronics Japan together accounted for roughly 60% of industry revenue through 2025.

The company cited vertical integration in probe card manufacturing, lower pricing than rivals and fast technical support as the basis for its entry, with Tiger Elec supplying the main PCB and Megatouch the pins. Domestically, Korea Instrument and Micro2Nano compete in adjacent segments.

Earnings trend

Quarterly revenue · Operating profit

₩117.6B₩14.8B25Q2₩104.4B₩11.5B25Q3₩123.9B₩19.8B25Q4₩150.7B₩42B26Q1₩188.8B₩52.5B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩339.3B₩56.6B2022₩249.1B-₩2.4B2023₩348.1B₩39.9B2024₩428.9B₩49.2B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩117.6B	₩14.8B	12.6%
2025Q3	₩104.4B	₩11.5B	11.0%
2025Q4	₩123.9B	₩19.8B	16.0%
2026Q1	₩150.7B	₩42B	27.9%
2026Q2	₩188.8B	₩52.5B	27.8%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩339.3B	₩56.6B	₩49.8B	16.7%	17.2%	31.8%
2023	₩249.1B	-₩2.4B	₩100M	−1.0%	0.0%	27.4%
2024	₩348.1B	₩39.9B	₩42.5B	11.5%	12.4%	29.9%
2025	₩428.9B	₩49.2B	₩38.2B	11.5%	9.8%	30.9%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

Results have swung widely with the cycle and product mix. In 2023 revenue was KRW 249.1bn with an operating loss of KRW 23.8bn; 2024 turned profitable with revenue of KRW 348.1bn and operating profit of KRW 39.9bn, and 2025 delivered revenue of KRW 428.9bn and operating profit of KRW 49.2bn.

The 2025 operating margin of 11.5% was flat versus 2024, however, and owners' net income fell to KRW 38.2bn from KRW 42.5bn, reflecting non-operating items in 2024 that lifted net income (KRW 45.0bn) above operating profit (KRW 39.9bn). The quarterly path shows a clear inflection point.

Second-quarter 2025 revenue was KRW 117.6bn with operating profit of KRW 14.8bn (12.6% margin), the third quarter KRW 104.4bn and KRW 11.5bn (11.0%), and the fourth quarter KRW 123.9bn and KRW 19.8bn (16.0%) - all low-teens or below.

Then first-quarter 2026 revenue of KRW 150.7bn and operating profit of KRW 42.0bn pushed the margin to 27.9%, and DS Investment and Securities noted in a July 2026 report that the quarter included KRW 18bn of OLED inspection equipment revenue.

Second-quarter 2026 revenue of KRW 188.8bn and operating profit of KRW 52.5bn held the margin at 27.8%, exceeding the same report's estimate of KRW 44bn in consolidated second-quarter operating profit, which had argued that profit could still grow on semiconductor sales without OLED revenue.

First-half 2026 totals were revenue of KRW 339.4bn and operating profit of KRW 94.5bn, while the last four quarters (third quarter 2025 through second quarter 2026) sum to revenue of KRW 567.7bn and operating profit of KRW 125.7bn.

On earnings quality, second-quarter 2026 owners' net income of KRW 36.9bn was essentially unchanged from KRW 36.9bn in the first quarter, so the operating profit gain did not pass through fully, cushioned by non-controlling interests, taxes and non-operating items.

Financial footing improved, with operating cash flow rising from KRW 2.6bn in 2023 to KRW 48.6bn in 2025 and a debt-to-equity ratio of 30.9% at end-2025.

Industry analysis

Probe cards are consumable parts that carry signals between the tester and the chip during wafer-level inspection, so demand tracks customers' new and conversion investment as well as replacement cycles.

DS Investment and Securities explained that interface and burn-in board demand moves with the customer capex cycle and generates recurring demand on a roughly five-year replacement cadence. The company said probe card life is typically around five years.

Market size estimates vary by provider, but Mordor Intelligence sized the probe card market at USD 2.71bn in 2026, projecting 9.31% annual growth to USD 4.23bn by 2031.

Technical difficulty rises from NAND flash to DRAM to HBM, and HBM cards have mainly been supplied by FormFactor of the United States and Japan's MJC and JEM.

TSE's position is that of a late entrant climbing from an established NAND share into harder segments, and The Elec reported that as US-China trade friction constrained American rivals' access to China, TSE has been gaining share there.

On cycle positioning, the company sits inside a memory expansion phase driven by AI and data center demand, which is supportive for consumable parts, though 2023 results already showed how the same leverage works in reverse when investment slows.

Domestically, Korea Instrument and Micro2Nano are also targeting DRAM and HBM localization, so volume allocation within customers and price negotiations will shape medium-term margins.

Outlook

The company has moved into front-loaded investment to meet demand. A KRW 100bn first-series private convertible bond disclosed in July 2026 carries a conversion price of KRW 238,664 per share; full conversion would create 418,999 new shares, equal to 3.79% of the existing share count.

Proceeds were split KRW 50bn each to facilities and working capital, with facility funds going to probe card production equipment and plant expansion through 2028 and working capital earmarked for labor costs of KRW 30bn in 2026 and KRW 20bn in 2027.

A company official said utilization of the relevant equipment stood at 60-70% and that the investment also covers facilities for next-generation products such as HBM.

On order flow, LS Securities analyst Jung Hong-sik said in a July 2026 report that the probe card backlog had risen successively from end-2025 through the first and second quarters of 2026 and that probe card revenue was likely to grow more in the third quarter than the second.

For estimates, LS Securities projected 2026 revenue of KRW 578.3bn and operating profit of KRW 159.2bn, a 27.5% margin, in its July 2026 report, while DS Investment and Securities around the same time projected 2026 revenue of KRW 647.0bn with operating profit of KRW 175.3bn, and 2027 revenue of KRW 894.0bn with operating profit of KRW 245.7bn.

On new products, probe card development for HBM4 and HBM4E was reported to be under way, and in June 2026 the company said it was co-developing with the Korea Institute of Industrial Technology a test handler for stacked semiconductors with twice the productivity, aiming to complete the next-generation equipment and die socket by March 2027.

These figures are brokerage estimates, however, and results from the third quarter of 2026 onward have not yet been confirmed through disclosure.

Valuation

PER

24.9×

PBR

5.5×

ROE

25.6%

EPS

₩9,514

BPS

₩42,846

Dividend per share

₩450

Any valuation discussion has to start with the fact that the profit base changed abruptly over the past two quarters.

With the operating margin moving from 11.5% for full-year 2025 to the high-20% range in the first and second quarters of 2026, multiples computed on the last four quarters of earnings and those computed on 2025 full-year earnings now diverge sharply.

As a reference point, DS Investment and Securities said in July 2026 that its target price used a target multiple of 20.4 times, the 2020-2025 average price-to-earnings ratio excluding 2023; the current price-to-earnings ratio sits above that historical average multiple.

Relative to book value the stock trades at a sizable premium, and dividends are not a leading attraction within the sector, consistent with a phase in which cash is prioritized for growth investment.

On target prices, LS Securities raised its target from KRW 270,000 to KRW 350,000 on July 2, 2026, and DS Investment and Securities initiated coverage the same day with a KRW 360,000 target - these are the brokerages' own views, not KOSAI's.

Ultimately, whether the current multiple holds depends on whether 20%-plus margins and rising probe card orders persist beyond the second half of 2026, and it is worth remembering that a cycle downturn like 2023's would materially reset the earnings base itself.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Mix shift from NAND into DRAM and HBM

The Elec reported in January 2026 that TSE had passed HBM probe card qualification tests at domestic and overseas memory makers, entering a market previously dominated by foreign suppliers.

DS Investment and Securities argued that DRAM probe cards carry higher technical difficulty and entry barriers than NAND, making new customer wins particularly meaningful.

Higher-difficulty products carry different pricing and margin structures, so identical revenue growth can translate into different profit contribution. The move to high-20% operating margins in the first and second quarters of 2026 is consistent with that mix shift.

Vertical integration and recurring demand

Tiger Elec's PCBs, Megatouch's pogo pins and interposers and GM Test's testing services are seen as the foundation of raw-material sourcing and cost competitiveness.

DS Investment and Securities described interface and burn-in boards as generating recurring demand on a roughly five-year replacement cycle, on top of new and conversion investment. A large consumables share leaves some revenue base intact even during gaps in equipment orders. When subsidiary profits rise, the consolidated improvement is amplified.

Rising backlog with room to raise utilization

LS Securities analyst Jung Hong-sik said the probe card backlog had grown from end-2025 into the first and second quarters of 2026, and that aggressive customer capex plans should sustain growth beyond 2027.

The company put utilization of the relevant equipment at 60-70%, implying remaining room for utilization itself to improve. On top of that, probe card equipment and facility expansion is planned through 2028. If demand holds, added capacity and higher utilization would widen the revenue base simultaneously.

Bear factors

Dependence on the memory capex cycle

Revenue is tied to the investment plans of a small number of large memory customers, so downturns hit results hard. In 2023 the company posted revenue of KRW 249.1bn and an operating loss of KRW 23.8bn, with operating cash flow of only KRW 2.6bn.

Industry research also flags heavy reliance on memory capex cycles as a common weakness that can pressure probe card makers' margins. The high-20% margins of the first half of 2026 may prove to be a cycle-peak reading.

Convertible bond dilution and redemption terms

Full conversion of the KRW 100bn private convertible bond would issue 418,999 shares, equal to 3.79% of the existing share count, with the conversion window running from July 22, 2027 to June 22, 2031.

Investors may request early redemption every three months from January 2029, so principal repayment obligations could arise if conversion does not occur. Zero coupon and maturity rates and the absence of refixing are favorable terms for the company, but the dilution remains. If the proceeds are slow to convert into revenue, costs land first and benefits later.

Operating gains do not fully reach owners' earnings

Of KRW 464.6bn in total equity at end-2025, non-controlling interests accounted for a sizable KRW 73.3bn. Indeed, second-quarter 2026 operating profit of KRW 52.5bn rose sharply from KRW 42.0bn in the first quarter, yet owners' net income of KRW 36.9bn was essentially unchanged.

The larger the subsidiaries' profit contribution, the larger the share attributable to minority holders. DS Investment and Securities expected Megatouch to move past last year's one-off bad-debt charge, which also implies that subsidiary-specific items can amplify consolidated earnings volatility.

Risk factors

Customer concentration and volume allocation

Most products go to a handful of large memory makers plus some Greater China customers, so a single customer's investment delay or supplier reshuffle flows straight into results.

The company said one memory maker had granted qualification approval but had not set mass-production delivery timing, as a rival's product is already in use on the line. That illustrates how qualification does not automatically convert into revenue recognition. Domestic rivals target the same segments, so securing share inside each customer remains an ongoing task.

Technology competition and the global top-tier gap

Research estimates that FormFactor, Technoprobe and Micronics Japan held about 60% of market revenue through 2025, that FormFactor added patents via a MEMS design acquisition, and that Technoprobe operates fully integrated MEMS tip production.

The leaders' accumulated technology, patents and close customer service can cap how fast a late entrant expands. Any delay in supporting next-generation standards such as HBM4 and HBM4E would make existing references harder to defend. In test components, a quality failure directly costs the customer line time, making trust recovery expensive.

Geopolitics, regulation and front-loaded costs

Expansion into Greater China has been attributed to filling gaps left by rivals amid US-China trade friction, so a change in the regulatory environment could work in reverse. Market research notes that US export controls created uncertainty around Chinese memory makers' capacity expansion.

Meanwhile, the plan to spend KRW 30bn in 2026 and KRW 20bn in 2027 of working capital on labor costs means headcount expense rises first. If demand builds more slowly than planned, fixed-cost burden would show up in margins before the revenue does.

What to watch next

Late October to mid-November 2026
Third-quarter 2026 results disclosure. LS Securities projected that probe card revenue would grow more in the third quarter than the second, so whether the roughly 27% operating margin holds in the third quarter is the key test of the new profit level.
Fourth quarter 2026
A window to check progress on deploying the KRW 50bn facility portion of the convertible bond and the probe card capacity expansion schedule, plus any change from the 60-70% equipment utilization the company disclosed. The question is whether capacity additions keep pace with order growth.
March 2027
The target completion date for the stacked-semiconductor test handler and next-generation die test socket being co-developed with the Korea Institute of Industrial Technology. Completion and the timing of customer evaluation will drive visibility on new-product revenue.
Mid-March 2027
Filing of the 2026 annual business report, which will confirm the revenue mix by product (probe cards, interface boards, sockets, OLED inspection equipment), subsidiary results, capital expenditure actually deployed and the dividend decision.
July 22, 2027
The start of the conversion request window for the first-series private convertible bond (conversion price of KRW 238,664 per share, running to June 22, 2031). Whether conversion proceeds from that point directly affects share count and capital structure.

Overall view

TSE moved from a KRW 23.8bn operating loss in 2023 to profitability in 2024 and then to 2025 revenue of KRW 428.9bn with operating profit of KRW 49.2bn; in the first and second quarters of 2026 it posted revenue of KRW 150.7bn with operating profit of KRW 42.0bn and revenue of KRW 188.8bn with operating profit of KRW 52.5bn, marking a step change in the profit level.

The pivot is the broadening of a NAND-centric probe card business into DRAM and HBM, and probe card revenue was reported at KRW 143.4bn in 2025 versus KRW 80.3bn in 2024, representing 40.6% of parent-basis revenue in the first quarter of 2026.

To meet that demand, the company has begun front-loaded facility and labor spending funded by a KRW 100bn convertible bond, with facility expansion planned through 2028.

On the other side sit dependence on the memory capex cycle, potential share dilution of 3.79% upon conversion alongside early-redemption terms from 2029, and a structure in which non-controlling interests keep operating gains from flowing fully into owners' net income.

Valuation reads very differently depending on how long the past two quarters' elevated margins persist, and the brokerage estimates published in July 2026 have not yet been verified against reported results.

The items to monitor are therefore third-quarter margin durability, the order backlog trend, the pace of capacity deployment and progress on HBM4-generation products. This report is for informational purposes and contains no buy or sell recommendation.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.