KOSDAQSemiconductors222800

Simmtech

₩169,900▲ 6.39%2026-10-02 close

Market Cap

₩6.4T

Turnover

₩180B

Volume

1.1M

Shares out.

38.5M

PER

—

PBR

6.8×

EPS

-₩1,703

Dividend Yield

0.08%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩100 per share · Prices as of the 2026-10-02 close

Report overview

AI Substrate Turnaround Meets a Capex and Funding Test

After two loss-making years, Simmtech swung to a double-digit operating margin in 2Q 2026 on high-value substrates such as SOCAMM and MSAP products, but large-scale capacity expansion and the funding needed to support it have grown in parallel.

1
In 2Q 2026 revenue was KRW 514.6bn and operating profit KRW 62.9bn, lifting the operating margin to 12.2% versus 1.6% in 2Q 2025.
2
First-half 2026 operating profit of KRW 76.6bn already far exceeds the KRW 11.9bn recorded for full-year 2025.
3
The company disclosed its own second-half 2026 outlook of KRW 1,071.9bn in revenue and KRW 163.1bn in operating profit (fair disclosure dated 5 August 2026, internal estimate).
4
The Cheongju expansion has widened into a KRW 400bn investment agreement with local governments, with the disclosed KRW 274.2bn facility investment as phase one.
5
In 2025 the company posted a net loss attributable to owners of KRW 164.2bn despite positive operating profit, and dilution and interest costs tied to financing remain on the bearish side of the ledger.

Business structure

Simmtech is a specialist maker of printed circuit boards (PCBs) for semiconductors. Founded in 1987, it was spun off from Simmtech Holdings in 2015 and manufactures and sells semiconductor PCBs through several production entities at home and abroad.

Its core products are memory module PCBs, FC-CSP substrates and SiP module substrates, with major global memory chipmakers and packaging houses as key customers. Samsung, SK Hynix, Micron and Intel are cited as partner customers.

The core businesses are package substrates and memory modules, and from 2026 the company also began supplying SOCAMM2 substrates used in AI accelerators.

Segment size is not a confirmed disclosure figure and relies on broker estimates: iM Securities projected 2026 revenue of roughly KRW 1.4tn from package substrates, about KRW 400bn from memory modules and about KRW 232bn from SOCAMM.

Share estimates also diverge: Business Post reported that Simmtech holds 70% of the market for NVIDIA-bound SOCAMM substrates, while Kiwoom Securities estimated its SOCAMM share at 50-60%.

On differentiation, Meritz Securities said in an August 2026 note that Simmtech is the only Korean substrate maker supplying both SOCAMM modules and SOCAMM multi-chip package substrates.

Its competitive set overlaps with domestic package substrate peers such as Daeduck Electronics, Korea Circuit and Haesung DS, and semiconductor PCBs are regarded as a high technical barrier industry where new entry into module PCBs and substrates is limited. Key subsidiaries include Global Simmtech and Simmtech Xi'an.

Earnings trend

Quarterly revenue · Operating profit

₩340.8B₩5.5B25Q2₩372.8B₩12.4B25Q3₩393.4B₩10.3B25Q4₩422.4B₩13.7B26Q1₩514.6B₩62.9B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.7T₩352.4B2022₩1T-₩88.1B2023₩1.2T-₩47B2024₩1.4T₩11.9B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩340.8B	₩5.5B	1.6%
2025Q3	₩372.8B	₩12.4B	3.3%
2025Q4	₩393.4B	₩10.3B	2.6%
2026Q1	₩422.4B	₩13.7B	3.2%
2026Q2	₩514.6B	₩62.9B	12.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.7T	₩352.4B	₩245.8B	20.8%	40.3%	106.7%
2023	₩1T	-₩88.1B	-₩114.9B	−8.5%	−24.5%	150.0%
2024	₩1.2T	-₩47B	-₩30.3B	−3.8%	−6.8%	221.8%
2025	₩1.4T	₩11.9B	-₩164.2B	0.8%	−28.5%	181.1%

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

The confirmed financials show 2022 as the cycle peak: revenue of KRW 1,697.5bn, operating profit of KRW 352.4bn (20.8% margin) and net profit attributable to owners of KRW 245.8bn.

The company then posted two consecutive loss years, with 2023 revenue of KRW 1,041.9bn and an operating loss of KRW 88.1bn, and 2024 revenue of KRW 1,231.4bn with an operating loss of KRW 47.0bn, before 2025 revenue of KRW 1,410.6bn and operating profit of KRW 11.9bn (0.8% margin) returned the operating line to black.

The 2025 net loss attributable to owners nevertheless widened to KRW 164.2bn, driven mainly by a KRW 116.7bn quarterly net loss in 4Q 2025 even though that quarter carried KRW 10.3bn of operating profit.

The quarterly trend is clearly improving: from KRW 340.8bn revenue and KRW 5.5bn operating profit (1.6%) in 2Q 2025, to KRW 372.8bn and KRW 12.4bn in 3Q 2025, KRW 393.4bn and KRW 10.3bn in 4Q 2025, KRW 422.4bn and KRW 13.7bn (3.2%) in 1Q 2026, and KRW 514.6bn and KRW 62.9bn (12.2%) in 2Q 2026.

First-half 2026 operating profit of KRW 76.6bn is more than six times the full-year 2025 figure.

On the drivers, Kiwoom Securities pointed to higher plant utilization and increased shipments of high-value products such as MSAP packaging substrates and SOCAMM, while brokerages commonly cited a richer high-value product mix, higher average selling prices and better utilization.

The balance sheet improved, with the debt-to-equity ratio falling from 221.8% in 2024 to 181.1% in 2025 and total equity rising from KRW 448.5bn to KRW 576.4bn, an increase that includes the equity treatment of a KRW 50bn perpetual convertible bond issued in June 2025.

By contrast, on the confirmed data provided, operating cash flow was negative for three straight years at KRW -93.4bn in 2023, KRW -161.3bn in 2024 and KRW -198.6bn in 2025, so the lag between earnings recovery and cash flow recovery warrants monitoring.

Industry analysis

The demand engine is the AI server. Beyond GPUs and high-bandwidth memory, demand for the memory module substrates that carry them onto server boards grows with AI infrastructure spending, and SOCAMM, the low-power server memory standard led by Samsung Electronics, has entered mass production.

Substrate supply and demand has tilted toward suppliers, according to sell-side analysis: Hana Securities wrote in an April 2026 report that orders are being taken selectively for high-margin products within limited capacity, which it read as the package substrate market becoming a seller's market.

On competition, NH Investment & Securities expected the supply-demand environment for BT substrate makers to turn more favorable as global peers concentrate expansion on ABF (FC-BGA) and leave limited room for BT investment. Pricing direction is contested.

Around mid-2026, reports raising the possibility of second-half price cuts for memory package substrates weighed on sentiment, while Hana Securities saw a cut as unlikely, noting the April price increase.

On costs, SK Securities argued that differentiation in the substrate industry will hinge on whether processing fees rise after raw material cost pass-through, pointing to shortages centered on leading Japanese material suppliers and successive supply price hikes.

Peers are adding capacity at the same time: Daeduck Electronics announced a KRW 213bn investment plan in May 2026, and Meritz Securities said that once all equipment is installed capacity could expand roughly 80% versus the existing plant, with the new facility expected to run from 3Q 2027.

Cycle amplitude is also worth noting: SK Securities calculated that during the 2019-2022 big cycle Simmtech's share price moved 11.7 times from trough to peak, implying large swings in both upturns and downturns.

Outlook

The company took the unusual step of publishing its own half-year outlook.

For 2H 2026 it guided to revenue of KRW 1,071.9bn (range KRW 1,061.9-1,081.9bn) and operating profit of KRW 163.1bn (range KRW 158.1-168.1bn), citing continued growth in System IC products, a full ramp of SOCAMM products and an improving AI-related high-value mix.

It noted the figures are internal estimates and that actual results may differ as conditions change.

The SOCAMM ramp is pivotal: the company raised its 2026 SOCAMM revenue target from KRW 150bn to KRW 230bn, and after KRW 39.3bn in 2Q, SOCAMM revenue was expected to reach the KRW 70bn range in 3Q and around KRW 100bn in 4Q. Expansion has already moved to the disclosure and agreement stage.

The KRW 274.2bn facility investment disclosed on 25 August 2026 targets demand for AI SOCAMM module substrates and high-layer-count MSAP substrates, and once complete annual capacity from 2028 was projected to rise to KRW 500bn for SOCAMM (from KRW 300bn) and KRW 2,250bn for packaging substrates (from KRW 2,000bn).

On 2 September 2026 the company signed an agreement with Chungcheongbuk-do and Cheongju City covering KRW 400bn of investment and 100 new hires, with the disclosed KRW 274.2bn as phase one covering the Oksan-myeon site in Heungdeok-gu and existing plants in the Cheongju industrial complex.

Policy support is partly secured: in June 2026 the Financial Services Commission's National Growth Fund approved KRW 20bn toward a KRW 40bn expansion of next-generation memory package substrate capacity.

Funding structure, however, is not yet settled: Seoul Economic Daily reported in August 2026 that Simmtech is pursuing about KRW 300bn in financing with Shinhan Securities as arranger, and that while a rights offering was considered, the company leaned toward a 30-year perpetual convertible bond given potential share price impact.

NH Investment & Securities said in a 26 August 2026 report that roughly 50% of the investment would go to SOCAMM module PCB capacity, 40% to MSAP substrates and 10% to system IC substrates.

Valuation

PER

—

PBR

6.8×

ROE

-9.3%

EPS

-₩1,703

BPS

₩17,340

Dividend per share

₩100

Net profit attributable to owners over the most recent four quarters (3Q 2025 to 2Q 2026) was negative, so a price-to-earnings ratio cannot be calculated; despite the first-half 2026 recovery, the large 4Q 2025 net loss still sits inside that window.

As a result the market is currently pricing the shares on a multiple of net assets rather than earnings, and that multiple sits at a larger premium to book value than during the company's earlier loss-making phase.

The dividend has been maintained only at a token level, so the dividend yield is effectively too small to be a meaningful investment variable.

Sell-side views mix earnings upgrades with multiple adjustments: Kiwoom Securities maintained a Buy rating and a KRW 190,000 target price in a report dated 6 August 2026, while Meritz Securities around the same time raised its 2026 and 2027 operating profit forecasts to KRW 246.7bn and KRW 458.6bn but cut its target price from KRW 190,000 to KRW 170,000 to reflect valuation adjustments after share price declines among global substrate makers.

On financing, Hana Securities said in August 2026 that even fully reflecting potential share increases from external funding, the medium-to-long-term valuation burden is limited, while noting that near term, convertible bond terms and conversion volumes could raise dilution and overhang-driven volatility.

What can be stated as fact is that the pace of earnings recovery, the timing of new capacity coming online and the terms of financing are all being reflected at once.

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

SOCAMM ramp and mix improvement

A richer high-value mix is feeding straight into profits. The company raised its 2026 SOCAMM revenue target from KRW 150bn to KRW 230bn, with the quarterly figure expected to grow from KRW 39.3bn in 2Q to around KRW 100bn in 4Q.

NH Investment & Securities forecast that SOCAMM's share of module PCB revenue would expand from about 30% in 2026 to around 50% in 2027. In the confirmed results, the 2Q 2026 operating margin of 12.2% contrasts sharply with 1.6% in 2Q 2025.

Rising utilization in a seller's market

Utilization still leaves room for further improvement. Kiwoom Securities put company-wide utilization at around 84% as of 2Q 2026.

NH Investment & Securities saw the supply-demand backdrop for BT-type substrates turning favorable as global peers focus expansion on ABF, and Hana Securities read the pattern of selective high-margin order intake within limited capacity as evidence of a seller's market. When pricing and mix move together, fixed-cost leverage becomes larger.

Expansion pipeline and policy support

Investment to serve medium-term volumes is now documented. On completion of the expansion, annual capacity from 2028 was projected at KRW 500bn for SOCAMM and KRW 2,250bn for packaging substrates.

The KRW 400bn investment agreement with Chungcheongbuk-do and Cheongju City treats the disclosed KRW 274.2bn as phase one, with further investment to be reviewed in line with market demand. The National Growth Fund approved KRW 20bn of support within a KRW 40bn expansion, securing part of the funding at low cost.

Bear factors

Funding size and dilution risk

Funding for the expansion is not yet finalized. Seoul Economic Daily reported in August 2026 that Simmtech had selected Shinhan Securities as arranger for about KRW 300bn of financing and leaned toward a 30-year perpetual convertible bond rather than a rights offering.

Hana Securities also noted that near term, convertible bond terms and conversion volumes could raise dilution and overhang-related volatility. Terms on existing perpetual paper are also a burden: the buyback consideration on the perpetual convertible bond issued in June 2025 applied an 8.0% annual compound rate.

Cash flow and financial leverage

The earnings recovery has not yet translated into cash. On the confirmed data provided, operating cash flow was negative for three consecutive years: KRW -93.4bn in 2023, KRW -161.3bn in 2024 and KRW -198.6bn in 2025.

The debt-to-equity ratio fell from 221.8% in 2024 to 181.1% in 2025 but remains above the 106.7% of 2022. With more than KRW 274.2bn of facility investment overlapping this period, the balance between operating cash generation and capital spending is a key item to watch.

Pricing and cycle reversal risk

Because pricing is central to the earnings improvement, it can also work in reverse.

In mid-2026, memory package substrate names including Daeduck Electronics, Simmtech and Haesung DS saw sharp corrections as concerns about overheated AI investment coincided with reports raising the possibility of second-half price cuts.

Peer expansion is proceeding in parallel, and Meritz Securities expected Daeduck Electronics' new facility to begin operating from 3Q 2027. Simmtech's own added capacity assumes a 2028 start, so supply-demand at that point may differ from today.

Risk factors

Customer and product concentration

A large part of the growth is tied to a single product family, SOCAMM, and a handful of large customers. With Simmtech's share of NVIDIA-bound SOCAMM substrates reported at 70%, the adoption pace or specification changes for that standard can feed directly into results.

NH Investment & Securities mentioned the possibility of SOCAMM adoption spreading beyond NVIDIA, but that remains a forecast rather than a confirmed fact. Shifts in customer inventory or investment plans could widen quarterly earnings swings.

Uncertainty in guidance

The second-half outlook the company provided is not a confirmed result. The company stated the outlook is an internal estimate based on market analysis and business plan targets, and that as forward-looking information it may differ from actual outcomes.

The 2Q 2026 figures were also preliminary, without completed external auditor review at the time of disclosure. The second-half numbers therefore need to be verified against actual third- and fourth-quarter disclosures.

Input costs and currency

Raw materials and currency cut both ways for margins. One interpretation of the April 2026 price increase was that it partly reflected higher prices for inputs such as gold and copper.

SK Securities pointed to shortages centered on leading Japanese material suppliers and successive supply price hikes, and expected differentiation among makers to depend on whether processing fees rise after raw material cost pass-through.

Currency matters too: Daishin Securities cited a higher won-dollar rate as one driver of the strong 1Q 2026 results, meaning a reversal could weigh on results by a similar magnitude.

What to watch next

Late October to early November 2026
Preliminary 3Q 2026 results. Key checks are whether the company is on track for roughly half of its second-half guidance of KRW 1,071.9bn revenue and KRW 163.1bn operating profit, and whether third-quarter SOCAMM revenue expanded into the KRW 70bn range.
September to December 2026
Whether financing terms are formally disclosed. With reports of about KRW 300bn in financing and consideration of a 30-year perpetual convertible bond, the final issue size, coupon, conversion price and potential dilution should be verified through disclosures.
Fourth quarter 2026
Progress on phase one of the Cheongju expansion. Items to watch include construction of production and office buildings on the new 16,529 square meter Oksan-myeon site and within idle space at the existing Cheongju plant, alongside whether designation as a Cheongju semiconductor cluster brings infrastructure cost support.
January to February 2027
Confirmed full-year 2026 results and the dividend decision, plus the outcome of 2027 volume and price negotiations. This is the point to compare Meritz Securities' 2027 operating profit forecast of KRW 458.6bn against actual confirmed figures and company plans.
First half of 2027
Timing of competing capacity additions. Meritz Securities expected Daeduck Electronics' new facility to start operating from 3Q 2027, so supply-demand shifts where peer line start-ups overlap with Simmtech's capacity expansion targeted for 2028 should be monitored.

Overall view

Simmtech's confirmed results peaked in 2022 (revenue KRW 1,697.5bn, operating profit KRW 352.4bn), then ran two consecutive operating loss years in 2023-2024, and in 2025 returned to a small operating profit of KRW 11.9bn while still leaving a net loss attributable to owners of KRW 164.2bn.

The trend changed in 2026: revenue of KRW 422.4bn with KRW 13.7bn operating profit in 1Q and KRW 514.6bn with KRW 62.9bn in 2Q lifted the operating margin to 12.2%, so first-half operating profit far exceeded the full-year 2025 figure.

The bullish case rests on higher utilization and greater shipments of high-value products such as MSAP substrates and SOCAMM, the company's fair-disclosure outlook of KRW 1,071.9bn revenue and KRW 163.1bn operating profit for the second half, and the KRW 400bn Cheongju expansion plan that includes KRW 274.2bn of phase-one facility investment.

On the other side sit three straight years of negative operating cash flow, a debt-to-equity ratio still above 2022 levels, and a funding structure in which about KRW 300bn of financing and a perpetual convertible bond have been reported as under consideration.

Industry views also diverge: some read package substrates as having moved into a seller's market, yet episodes where possible price cuts and concerns over overheated AI investment shook sentiment have already occurred.

Upcoming third-quarter results, formal disclosure of financing terms and the pace of expansion spending should provide the evidence for which of these two forces carries more weight. This report is for information purposes and contains no buy or sell opinion or target price.

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.