KnJ

KNJ operates a semiconductor parts business that manufactures silicon carbide (SiC) focus rings via chemical vapor deposition (CVD) for wafer etch processes, alongside an electronic parts business making flexible printed circuit boards (FPCB) for automotive electronics and displays through its subsidiary Circuit Flex.

According to a July 2026 KB Securities report, the company operates a semiconductor parts business (76.6% of revenue) and an electronic parts business producing FPCB for automotive electronics and displays (23.4% of revenue).

Within the semiconductor parts business, the SiC Focus Ring is the core product accounting for 75.4% of total revenue, and KNJ was the first domestic aftermarket player to commercialize the CVD-SiC Focus Ring, beginning supply to domestic memory makers in 2016 and building a mass-production track record.

Its main customers include SK hynix and Samsung Electronics, and it is regarded as having an edge over competitors in quality, lead time and cost by operating self-manufactured CVD chambers.

KNJ produces silicon carbide focus rings and SiC coating products for LED manufacturing via CVD at two production sites in Asan and Dangjin, and has been increasing shipments to China and Taiwan IDMs and equipment makers through the sales network of Shinyun Semiconductor, a joint venture established in China in 2023.

The export share of its main product segment exceeded 40% for the first time, up from about 27% in 2023.

Circuit Flex, acquired in 2024, is an automotive electronics FPCB specialist supplying finished-vehicle makers through global Tier-1 parts suppliers, with mid-to-long-term demand expected to grow alongside EV adoption and expanding autonomous driving.

2025 consolidated revenue rose sharply to KRW 84.4 billion from KRW 62.2 billion in 2024, with operating profit of KRW 22.2 billion and net income attributable to owners of KRW 25.6 billion. Operating margin improved from 21.3% in 2022 and 19.4% in 2023 to 22.7% in 2024 and 26.3% in 2025.

On a quarterly basis, revenue and operating profit rose steadily from KRW 19.95 billion/KRW 5.18 billion in Q2 2025 to KRW 21.86 billion/KRW 5.64 billion in Q3 and KRW 23.35 billion/KRW 5.88 billion in Q4.

Revenue then jumped to KRW 34.87 billion in Q1 2026 with operating profit of KRW 7.50 billion and net income attributable to owners of KRW 6.34 billion, marking a step-up in growth pace.

However, in Q2 2026, while revenue (KRW 34.19 billion) and operating profit (KRW 6.46 billion) remained solid, net income attributable to owners fell sharply to just KRW 0.36 billion from the prior quarter.

According to Newspim, the conversion right of a convertible bond issued this year was classified as a derivative liability under accounting standards, generating a fair-value valuation loss of about KRW 4.9 billion, while the expected annual effective tax rate for 2026 on a standalone basis was 24.6%, higher than 11.5% in the same period last year, compounded by a discontinued-operations loss at an overseas subsidiary tied to a previously discontinued business.

The company explained that this was not a cash outflow from operations but a non-cash accounting loss reflecting fair-value changes, and that once the conversion right is exercised, the related liability would be removed and reflected as equity upon new share issuance.

Operating cash flow rose steadily from KRW 10.55 billion in 2022 to KRW 12.79 billion in 2023, KRW 17.60 billion in 2024 and KRW 18.24 billion in 2025, sustaining the underlying cash-generating capacity, while the debt ratio also climbed from 120.4% in 2024 to 137.2% in 2025, reflecting greater capital-structure burden from capacity investment and convertible bond issuance.

The SiC focus ring is a consumable used in the etching process of semiconductor manufacturing, serving to gather plasma within the wafer inside etch equipment and maintain uniform, precise plasma density.

As process miniaturization and layer stacking advance, SiC-based focus rings can improve durability by 1.5 to 2 times compared with conventional silicon, driving a structural shift away from the older material.

According to one analysis, the domestic SiC focus ring market was estimated at KRW 420 billion in 2024, with the aftermarket segment tripling from KRW 50 billion to KRW 170 billion over the past four years, while KNJ's revenue grew from KRW 15.5 billion in 2020 to KRW 61.1 billion in 2024, lifting its market share from 6% to 15%.

Another view holds that SiC adoption is expanding in NAND processes where focus ring durability requirements are high, with Samsung Electronics' Xian plant converting to V8 and SiC focus rings expected to become standard alongside rising QLC demand.

KNJ supplies SiC rings directly to end-user memory makers through an aftermarket model that bypasses equipment makers, citing price competitiveness relative to the equipment-maker-margin-laden before-market and faster responsiveness to customization as key strengths.

However, an assessment also notes that domestic manufacturers' adoption rate remains low, leaving room for future demand expansion, while both domestic and overseas competitors are also expanding capacity, leaving room for the competitive landscape to shift.

KB Securities forecast in its July 2026 report that annual 2026 consolidated revenue would reach KRW 153.2 billion (+81.4% YoY) with operating profit of KRW 32.3 billion (+45.1%).

The same report estimated that even excluding the newly consolidated FPCB segment, the semiconductor parts segment would post revenue of KRW 111.5 billion (+34.3% YoY), driving overall earnings growth.

KB Securities explained that once the third-phase expansion at the Dangjin and Asan plants completed in the first half of this year brings new production lines fully online in the second half, roughly KRW 140 billion of additional annualized production capacity would be secured, adding that factoring in productivity gains, mid-to-long-term capacity could expand to nearly KRW 160 billion.

The company has secured a new site in the Pyeongtaek Brain City industrial complex about 2.4 times the size of its existing sites, targeting construction start in the first half of 2027 and ramp-up in 2028.

A company representative noted that the second half is expected to benefit from rising NAND utilization and increased demand for etch-process parts tied to next-generation process transitions.

KB Securities, however, also flagged fixed-cost burden from expansion and the pace of FPCB profitability improvement as near-term risks.