KOSPISemiconductors353200

Daeduck Electronics

₩148,700▼ 0.47%2026-10-02 close

Market Cap

₩7.3T

Turnover

₩160.8B

Volume

1.1M

Shares out.

49.4M

PER

33.7×

PBR

5.2×

EPS

₩2,952

Dividend Yield

0.50%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩500 per share · Prices as of the 2026-10-02 close

Report overview

AI Substrate Upcycle Meets a Large Capex Test

All three legs—FC-BGA, memory package substrates and MLB—improved at once, driving a sharp first-half 2026 profit jump; the next hurdles are executing a capex program of over KRW 800 billion and signing long-term supply agreements.

1
Second-quarter 2026 revenue of KRW 401.0 billion and operating profit of KRW 70.3 billion lifted the quarterly operating margin above 17%, a different earnings level from the KRW 1.9 billion operating profit of the second quarter of 2025.
2
Annually, after a 2022 peak of KRW 1,316.2 billion revenue and a 17.7% operating margin, profits shrank sharply in 2023-2024, then recovered to KRW 1,065.3 billion revenue and a 4.6% operating margin in 2025.
3
The company disclosed KRW 213.0 billion of new facility investment in May 2026 (Siheung B1 building) and KRW 497.0 billion in July 2026 (Siheung and Ansan equipment); media tallies put this year's identified investment at around KRW 850 billion.
4
In July 2026 the company said talks with multiple global big-tech customers on long-term supply agreements for FC-BGA, FC-CSP and memory substrates were largely in the final stage; whether and on what terms they are signed remains to be verified.
5
With the new lines targeted to start up in the second and third quarters of 2027, the depreciation burden from expansion and the durability of downstream AI investment sit on the same scale.

Business structure

Daeduck Electronics is a printed circuit board (PCB) specialist whose product lines split broadly into memory package substrates, non-memory package substrates (FC-BGA and FC-CSP) and multi-layer boards (MLB).

It is described as a company producing a wide range of substrates, from advanced non-memory and memory semiconductor package substrates through to MLB.

Memory substrates serve server and graphics memory such as DDR5 and GDDR7, and the Siheung B1 center is the base that mixes memory substrate and FC-CSP production, where DDR5 and GDDR7 memory substrates had accounted for a high share.

FC-BGA is a high-specification package substrate used in AI accelerators, CPUs, GPUs and autonomous-driving chips, with investment centered on the Ansan B2 center at headquarters, while FC-CSP is used in mobile application processors, communication chips and power semiconductors.

MLB at the Ansan site is a high-layer-count board applied in AI accelerator servers and network equipment.

The customer base is anchored by domestic memory makers and global outsourced assembly and test players; major counterparties previously cited by the company included Samsung Electronics, SK hynix, STATS ChipPAC, Winpac and Amkor.

Competition overlaps domestically with Samsung Electro-Mechanics, LG Innotek, Korea Circuit and Simmtech, and abroad with Ibiden and Shinko of Japan, Unimicron and Nan Ya PCB of Taiwan, and AT&S of Austria. On ownership, the largest shareholder is the holding company Daeduck Co. The net result is a portfolio exposed simultaneously to the memory cycle and to AI and data center demand.

Earnings trend

Quarterly revenue · Operating profit

₩245.9B₩1.9B25Q2₩286.2B₩24.4B25Q3₩317.9B₩28.9B25Q4₩346.3B₩51.3B26Q1₩401B₩70.3B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩1.3T₩232.5B2022₩909.7B₩23.7B2023₩892.1B₩11.3B2024₩1.1T₩49.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩245.9B	₩1.9B	0.8%
2025Q3	₩286.2B	₩24.4B	8.5%
2025Q4	₩317.9B	₩28.9B	9.1%
2026Q1	₩346.3B	₩51.3B	14.8%
2026Q2	₩401B	₩70.3B	17.5%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩1.3T	₩232.5B	₩183.9B	17.7%	21.5%	39.4%
2023	₩909.7B	₩23.7B	₩25.4B	2.6%	2.9%	29.9%
2024	₩892.1B	₩11.3B	₩23.8B	1.3%	2.7%	24.4%
2025	₩1.1T	₩49.1B	₩47.6B	4.6%	5.3%	31.3%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-08-23

Earnings analysis

Annual results show a pronounced cycle amplitude.

After 2022 revenue of KRW 1,316.2 billion and operating profit of KRW 232.5 billion for a 17.7% operating margin, profitability fell to KRW 909.7 billion revenue and KRW 23.7 billion operating profit (2.6% margin) in 2023, and KRW 892.1 billion revenue with KRW 11.3 billion operating profit (1.3%) in 2024.

In 2025, revenue returned above the KRW 1 trillion mark at KRW 1,065.3 billion, with operating profit of KRW 49.1 billion (4.6%) and net profit attributable to owners of KRW 47.6 billion. The quarterly path shows the recovery slope more clearly.

The trough was the second quarter of 2025 at KRW 245.9 billion revenue and KRW 1.9 billion operating profit; revenue then rose for five straight quarters to KRW 286.2 billion (operating profit KRW 24.4 billion) in the third quarter of 2025, KRW 317.9 billion (KRW 28.9 billion) in the fourth, KRW 346.3 billion (KRW 51.3 billion) in the first quarter of 2026 and KRW 401.0 billion (KRW 70.3 billion) in the second.

The second-quarter 2026 operating margin of over 17% came close to the full-year 2022 level of 17.7%, and net profit attributable to owners in that quarter was KRW 57.7 billion.

For the first half, revenue reached KRW 747.3 billion and operating profit KRW 121.6 billion, and this marked a swing to profit from an operating loss of KRW 4.335 billion in the prior-year first half.

Net profit attributable to owners over the last four quarters, from the third quarter of 2025 through the second quarter of 2026, totaled roughly KRW 152.1 billion.

Cash flow tells a different story: operating cash flow declined from KRW 180.7 billion in 2023 to KRW 97.8 billion in 2024 and KRW 71.6 billion in 2025, diverging from the profit recovery, while the debt-to-equity ratio rose from 24.4% in 2024 to 31.3% in 2025.

The company noted that its second-quarter 2026 figures are preliminary consolidated numbers under K-IFRS and may change during the external auditor's review.

Industry analysis

The key downstream variable is a structural shortage of high-specification package substrates. As AI server investment expands rapidly, demand for high-end FC-BGA is outpacing supply; FC-BGA is a package substrate used mainly for PC and server CPUs and GPUs.

As server chips evolve toward mounting multiple semiconductors on a single substrate, the substrates themselves are becoming larger and more layered. The entry-barrier argument follows from this.

Analysts note that as substrate area grows, the number of units obtainable from a fixed panel falls sharply and controlling heat-induced warpage becomes far harder, while stacking of 20 or more layers acts as a technical and capital barrier blocking new entrants. Transaction structures are also shifting.

With supply constrained, global big-tech firms including Nvidia are increasingly locking in capacity through long-term supply agreements and prepayments, with prepayments used for line expansion.

Domestically, Samsung Electro-Mechanics has been running its FC-BGA lines at full utilization from the second half of 2026 and is expanding capacity centered on its Busan and Sejong plants, and a new Sejong line plus Vietnam investment, along with LG Innotek's FC-BGA expansion talks for Gumi and Vietnam, are also under way.

Daeduck's relative position rests on low single-product dependence, since it holds memory substrates, non-memory substrates and MLB, spreading its end-market exposure. That said, simultaneous capacity additions at home and abroad targeting the same demand will shape the path of pricing and utilization.

Outlook

The confirmed facts center on the size of investment and its timeline. On May 11, 2026 the company approved KRW 213.0 billion of new facility investment to expand a semiconductor product plant, with the investment period running to December 31, 2027.

Then on July 20, 2026 it disclosed KRW 497.0 billion of investment in semiconductor production equipment and ancillary facilities, again through December 31, 2027, equal to 55.39% of shareholders' equity.

Including KRW 52.8 billion for the acquisition of Newflex's Ansan plant and KRW 90.0 billion of previously deferred FC-BGA investment, the investment identified this year totals about KRW 850 billion, exceeding the KRW 540.0 billion of cumulative FC-BGA investment disclosed in 2020-2022.

Start-up timing has also been indicated. The target for equipment operation is the second quarter of 2027 for FC-BGA and the third quarter of 2027 for FC-CSP, with FC-BGA expected to start earlier because equipment is being installed in existing infrastructure, whereas FC-CSP is tied to completion of a new building.

On the demand side, the company said on July 22, 2026 that talks with multiple global big-tech customers over long-term supply agreements for FC-BGA, FC-CSP and memory substrates were largely in the final stage, and that it was selectively reviewing volumes it can serve amid customer requests for LTA- and prepayment-based expansion.

On products, Meritz Securities stated in a June 2026 report that Daeduck had begun mass production of large-body FC-BGA and that mass production of large-area, high-layer FC-BGA for AI networking would ramp from the second half.

On utilization, Yuanta Securities in a July 2026 report identified FC-BGA as the key second-half variable.

On funding, the company plans to cover investment from cash on hand and EBITDA, with first-quarter 2026 cash and equivalents of KRW 215.7 billion including KRW 140.1 billion of short-term financial instruments, against total borrowings of KRW 9.5 billion.

Valuation

PER

33.7×

PBR

5.2×

ROE

16.6%

EPS

₩2,952

BPS

₩18,963

Dividend per share

₩500

The earnings trajectory itself is the starting point for any valuation reading. With margins recovering from a 1.3% operating margin in 2024 to above 17% in the second quarter of 2026, the multiple varies widely depending on which period's earnings are used as the base.

The shares trade at a meaningful premium to book equity, which raises the question of how much post-expansion earnings power is already reflected.

For reference, iM Securities said in a July 2026 report that, on its own estimates, price-to-earnings ratios for 2026 and 2027 were 32 times and 23 times respectively, against a 28-times average for overseas peers on 2027 numbers.

On target prices, Meritz Securities said in a June 2026 report that it raised its target price from KRW 190,000 to KRW 200,000 and maintained a buy rating, and Yuanta Securities also maintained a buy rating with a KRW 200,000 target price in a July 2026 report.

A dividend is paid, but the dividend yield runs below the market average, so the weight of expectations embedded in the share price sits with expansion and pricing rather than with income.

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 2026-08-23

Bull factors

Simultaneous improvement across three product lines

First-half 2026 results reflected concurrent improvement in memory package substrates, non-memory package substrates and MLB. Revenue rose from KRW 245.9 billion in the second quarter of 2025 to KRW 401.0 billion in the second quarter of 2026, while operating profit expanded from KRW 1.9 billion to KRW 70.3 billion.

Operating across FC-BGA, memory packaging and MLB simultaneously has been cited as a strength versus peers during a substrate upcycle. A structure that does not depend on a single application can cushion swings in any one product's demand.

Pricing and mix in a shortage environment

Expanding AI server investment continues to leave demand for high-end FC-BGA ahead of supply. Yuanta Securities said in a July 2026 report that memory substrate price increases were beginning in earnest and that mix improvement and price hikes were proceeding together across divisions.

In a substrate business with heavy fixed costs, rising utilization alongside rising prices can widen margins faster than revenue grows. Indeed, the operating margin expanded for two straight quarters, to roughly 14% in the first quarter of 2026 and above 17% in the second.

Pre-emptive capacity and changing contract structures

Investment identified this year has been tallied at about KRW 850 billion. The company is pursuing capacity expansion using customer prepayments alongside its own cash.

Long-term supply agreements are spreading into the semiconductor materials, parts and equipment sector, with Samsung Electro-Mechanics and LG Innotek also widening their application in high-value businesses.

Expansion grounded in committed demand is cited as improving the predictability of utilization relative to the past approach.

Bear factors

Capex burden and the cash flow lag

The KRW 497.0 billion investment disclosed in July equals 55.39% of shareholders' equity. The company said the funds would come from cash on hand and external borrowing.

Operating cash flow fell from KRW 180.7 billion in 2023 to KRW 97.8 billion in 2024 and KRW 71.6 billion in 2025, while the debt-to-equity ratio rose from 24.4% in 2024 to 31.3% in 2025, indicating that financial headroom is not unlimited.

With equipment start-up scheduled for 2027, there is a lag window in which depreciation lands before revenue follows.

A history of cycle amplitude

The company's earnings have swung sharply before. Operating profit shrank from KRW 232.5 billion in 2022, a 17.7% margin, to KRW 11.3 billion in 2024, a 1.3% margin. A high weighting of cycle-sensitive memory substrates has been flagged as a driver of that earnings volatility. How long the current margin level persists remains unverified.

Concurrent expansion and intensifying competition

Samsung Electro-Mechanics has moved to expand high-performance substrate capacity centered on its Busan and Sejong plants, and a Vietnam investment plus LG Innotek's Gumi and Vietnam expansion talks are also in progress. Abroad, Ibiden and Shinko, Unimicron and Nan Ya PCB, and AT&S are already entrenched.

When multiple players' expansions complete at once, pricing and utilization could sit in a different phase than today.

Risk factors

Customer and application concentration

The substrate business is build-to-order, so changes in a few large customers' order plans feed straight through to utilization. The company supplies boards to customers on an order-production basis, and major counterparties it has previously cited were Samsung Electronics, SK hynix and global back-end assembly firms.

As AI accelerator and server products grow as a share of the mix, earnings become more tied to specific platforms' generational transition schedules. Segment- and customer-level weightings are best judged only within what disclosures confirm.

Technology and yield execution risk

As substrate area widens, the yield of units per panel drops sharply and controlling heat-induced warpage becomes considerably harder. Large-area, high-layer products have been presented as the axis of FC-BGA growth.

Such products carry higher unit prices but also make yield variability more consequential for earnings, so stabilizing mass production and securing customer qualifications are pivotal. This can only be verified after the fact through quarterly margin and utilization data.

Dependence on the AI investment cycle

A large share of current demand comes from data center and AI server investment. Expansion of the ASIC market has been described as lifting demand for customized FC-BGA, but that also means exposure to shifts in big-tech capital expenditure plans.

Even where long-term agreements limit some downside, volumes outside those contracts remain cycle-exposed. Contract terms are often undisclosed, so the actual degree of protection is hard to verify.

What to watch next

Late October to November 2026
Third-quarter 2026 results. Whether the second quarter's operating margin above 17% holds and whether revenue rises for a sixth straight quarter are the first indicators of how durable the recovery is.
Fourth quarter of 2026
Whether long-term supply agreements are signed and on what terms. It was reported that, with customer expansion requests growing, signings were expected within the year. The presence of prepayments, covered products and contract duration will shape visibility on expansion payback.
Around February 2027
Confirmation of full-year 2026 results, the dividend decision and the 2027 capital expenditure plan. This will show how far the annual operating margin recovered from 4.6% in 2025 and how the debt-to-equity ratio shifted with expanded investment.
Second to third quarter of 2027
FC-BGA equipment is targeted to start up in the second quarter of 2027 and FC-CSP in the third quarter of 2027. Adherence to the schedule and early utilization and yield will determine the payback pace of the capex program exceeding KRW 800 billion.
Second half of 2026 through 2027
Confirmation of how the Newflex Ansan land and building will be used and whether additional facility investment is disclosed. That site was not included in the KRW 497.0 billion investment, and the possibility was raised that a use decision could lead to a further equipment investment disclosure.

Overall view

For Daeduck Electronics, the first half of 2026 marks a clear phase shift on the numbers alone.

Operating profit went from KRW 1.9 billion in the second quarter of 2025 to KRW 70.3 billion in the second quarter of 2026, the quarterly operating margin approached the full-year 2022 level, and revenue rose for five consecutive quarters.

Behind this lie demand for high-specification package substrates driven by AI servers and data centers, together with pricing and mix improvement, and the company has responded with successive large facility investment disclosures centered on Siheung and Ansan.

At the same time, that investment exceeds half of shareholders' equity, creating a window in which depreciation and funding hit earnings and the balance sheet before the 2027 start-up.

The decline in operating cash flow since 2023 and the rise in the debt-to-equity ratio in 2025 are facts to weigh alongside the recovery. Valuation reflects a premium to book equity, and brokers' target prices and multiple judgments rest on differing bases and dates.

The axes for fact-checking from here are whether next quarter's margin holds, whether long-term supply agreements are signed and on what terms, and whether the new lines meet their start-up schedule. This report is for informational purposes and contains no buy or sell recommendation on any security.

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.