KOSDAQSemiconductors389020

Zaram Technology

₩17,170▲ 6.51%2026-10-02 close

Market Cap

₩117.8B

Turnover

₩2.7B

Volume

160,000 shares

Shares out.

6.9M

PER

—

PBR

1.6×

EPS

-₩596

Dividend Yield

0.00%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩0 per share · Prices as of the 2026-10-02 close

Report overview

From Losses to Early Profit: Mass Production Scale-Up Is Key

After a large operating loss in 2025, Zaram Technology saw revenue surge in 2026 and returned to owner net profit in the second quarter, with mass production expansion of XGS-PON ASIC for a European telecom equipment maker emerging as the key variable for earnings recovery.

1
Revenue jumped to roughly KRW 5.2 billion in Q1 2026 and KRW 6.1 billion in Q2 2026, well above the 2025 quarterly average.
2
Owner net profit turned positive at roughly KRW 0.1 billion in Q2 2026, while the operating loss narrowed for consecutive quarters.
3
In July 2026, the company secured a second XGS-PON ASIC production order through Arrow Electronics, the procurement partner of a European Tier-1 telecom equipment maker.
4
The company stated that conversion of a large portion of convertible bonds into common shares has been lowering the debt ratio from the 115.8% level seen at end-2025.
5
New businesses such as mobility network processor SoCs and neuromorphic semiconductors are progressing as government-funded projects but have not yet contributed to revenue.

Business structure

Founded in 2000, Zaram Technology is a fabless system semiconductor design company focused on telecom system-on-chips (SoCs) and stick products that combine chips with optical components.

Recently disclosed revenue mix shows optical transceivers accounting for roughly 41% of sales, DVT/SoC development services about 22%, XGSPON-related service revenue about 22%, and GigaWire products about 8%.

Its flagship XGSPON product is a telecom semiconductor used for 10-gigabit high-speed internet service, with the company having signed a KRW 16.5 billion development contract with a global telecom equipment maker in 2023 and an additional KRW 23.0 billion next-generation contract in 2025, according to available reports.

The company has internalized much of the intellectual property and EDA tooling required for chip design since its early days, reducing reliance on external vendors.

Its principal customer base is large European telecom equipment makers, and it has also signed an XGSPON chip development contract with a Chinese telecom equipment company, exploring potential entry into the North American market.

In terms of competitive positioning, large global semiconductor companies such as Intel and Broadcom reportedly operate in similar segments, and Zaram emphasizes low-power, low-cost design as a point of differentiation.

More recently, the company has been expanding beyond its telecom-centric business into mobility (automotive Ethernet switches, RISC-V based SoCs) and neuromorphic AI semiconductors.

However, most of these new businesses remain at an early development stage conducted through government-funded national projects, with no confirmed revenue contribution to date.

Earnings trend

Quarterly revenue · Operating profit

₩2.7B-₩1.6B25Q2₩2.1B-₩2B25Q3₩2.8B-₩2.2B25Q4₩5.2B-₩1.5B26Q1₩6.1B-₩300M26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩16.1B₩200M2022₩11.6B-₩2.1B2023₩22.2B₩400M2024₩10.6B-₩7.1B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩2.7B	-₩1.6B	−60.4%
2025Q3	₩2.1B	-₩2B	−93.5%
2025Q4	₩2.8B	-₩2.2B	−78.7%
2026Q1	₩5.2B	-₩1.5B	−29.9%
2026Q2	₩6.1B	-₩300M	−5.1%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩16.1B	₩200M	₩600M	1.3%	3.3%	5.3%
2023	₩11.6B	-₩2.1B	-₩1.3B	−18.4%	−3.6%	6.2%
2024	₩22.2B	₩400M	₩2B	1.6%	4.7%	84.5%
2025	₩10.6B	-₩7.1B	-₩6.8B	−66.4%	−19.2%	115.8%

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

On an annual basis, Zaram Technology posted revenue of KRW 16.1 billion, operating profit of KRW 0.2 billion, and net profit of KRW 0.6 billion in 2022, but swung to a loss in 2023 as revenue fell to KRW 11.6 billion with an operating loss of KRW 2.1 billion and a net loss of KRW 1.3 billion.

In 2024, revenue rose to KRW 22.2 billion with operating profit of KRW 0.4 billion and net profit of KRW 2.0 billion, marking a return to profitability, but in 2025 revenue plunged to KRW 10.6 billion with a large operating loss of KRW 7.1 billion and a net loss of KRW 6.8 billion, pushing the operating margin down to -66.4%.

Looking at quarterly trends, revenue was stagnant at around KRW 2.7 billion, KRW 2.1 billion and KRW 2.8 billion from the second to fourth quarters of 2025, while the operating loss actually widened over the same period, from KRW 1.6 billion to KRW 2.0 billion to KRW 2.2 billion.

The pattern shifted in 2026, however, as first-quarter revenue jumped to KRW 5.2 billion with the operating loss narrowing to KRW 1.5 billion, and second-quarter revenue rose further to KRW 6.1 billion, with the operating loss shrinking to around KRW 0.3 billion and owner net profit turning positive at roughly KRW 0.1 billion.

This appears to reflect the ramp-up of XGS-PON ASIC mass production orders for the European telecom equipment client. On the cash flow side, operating cash flow remained positive at KRW 0.6 billion in 2025, indicating that cash generation was not entirely impaired despite the income statement loss.

That said, the large 2025 loss did affect the balance sheet, with the debt ratio rising from 6.2% in 2023 and 84.5% in 2024 to 115.8% in 2025.

Industry analysis

The telecom semiconductor market in which Zaram Technology operates is tied to the upgrading of passive optical network (PON) infrastructure, with the industry viewed as being in a cycle of gradually rising 10Gbps-class PON penetration.

Growth in data traffic and the spread of 5G and AI-converged services continue to drive telecom operators' network equipment investment, a structure that can support expanding demand for high-speed PON chips such as XGSPON.

However, telecom equipment investment is closely linked to carriers' capital expenditure plans, meaning that even after contracts are signed, the timing of actual mass-production revenue recognition can be delayed. Indeed, some past contracts reportedly saw revenue recognition pushed back from initial expectations.

In terms of competitive landscape, large global semiconductor companies such as Intel and Broadcom participate in similar telecom chip markets, leading smaller fabless firms like Zaram to pursue niche competitiveness through low-power, low-cost design and close development ties with specific customers.

Meanwhile, across the broader system semiconductor industry, the open-source RISC-V design ecosystem is expanding, with applications broadening into automotive semiconductors and on-device AI chips.

Zaram is diversifying into mobility and neuromorphic fields in line with this trend, but these areas remain at an early government-project stage, making it premature to pinpoint a commercialization timeline.

Outlook

The company stated that first-half 2026 revenue rose sharply year over year with improved profitability, and laid out plans to expand mass-production revenue from its first XGS-PON ASIC while pursuing development of a second ASIC, 25GS-PON, and mobility semiconductors, based on an improved balance sheet.

Indeed, following a first mass-production order at the end of June 2026, the company secured an additional order worth about KRW 1.3 billion roughly two weeks later in mid-July, with the contract running through April 2027 and covering Europe and North America.

This volume was placed through Arrow Electronics, the procurement partner of a European Tier-1 telecom equipment maker, and currently applies to a single model the customer has finished developing, meaning future model expansion will be a key variable for revenue scale.

On the automotive side, the company was selected to lead a national project overseen by an institution under the Ministry of Trade, Industry and Energy to develop a mobility network processor SoC, aiming to build a RISC-V based automotive high-speed Ethernet switch, with the development period reportedly running through the end of 2026.

In AI semiconductors, the company was selected as a core research institution for a second-phase neuromorphic semiconductor national project led by the Korea Electronics Technology Institute (KETI), involving US AI firm Numenta and a Korea University research consortium, aimed at implementing hardware IP and producing sample chips.

Management indicated it intends to focus simultaneously on new product development and mass-production revenue growth without added financial risk, based on the balance sheet improvement from convertible bond conversion.

Still, most of these new business projects remain at the development or sample stage, and further time appears necessary before they translate into actual mass-production revenue.

Valuation

PER

—

PBR

1.6×

ROE

-7.4%

EPS

-₩596

BPS

₩9,785

Dividend per share

₩0

Following a large net loss in 2025, Zaram Technology is showing early signs of a turn to profit in the first half of 2026, meaning earnings-based valuation metrics remain at an early, less stable stage.

Even during a past period of profitability, market observers noted difficulty in establishing a fair valuation, with one securities analyst remarking at the time that "it is somewhat difficult to calculate an appropriate valuation." In terms of the price-to-book ratio, the stock trades in a range that reflects a meaningful premium to net asset value, which can be interpreted as the market partly pricing in expectations around the transition to mass production and new business areas.

The company currently maintains a no-dividend policy, reflecting a capital allocation pattern typical of an early-growth company that prioritizes R&D and production investment over shareholder returns.

The future direction of valuation appears tied to the pace of XGS-PON ASIC mass-production volume expansion and the timing of revenue contribution from the mobility and neuromorphic new business lines.

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

XGS-PON ASIC Mass Production Expansion

Following a first mass-production order at the end of June 2026, the company secured a second order in mid-July, making European and North American supply a reality.

The orders were placed through Arrow Electronics, the procurement partner of a European Tier-1 telecom equipment maker, with the contract running through April 2027. The clear revenue increase in the first and second quarters of 2026 versus prior quarters appears to reflect this expanding production volume.

Improved Balance Sheet

The company stated that conversion of a large portion of its convertible bond principal into common shares, along with the exercise of a call option to retire the remaining bonds, has reduced both potential dilution and the debt ratio.

This could help reverse the debt ratio that had climbed to 115.8% at the end of 2025. Reduced financial risk creates more room to focus resources on follow-on product development and production investment.

New Business Diversification Pipeline

The company has been selected as the lead or core research institution for two government-funded national projects—a mobility network processor SoC and a neuromorphic semiconductor—expanding its business beyond telecom chips.

The neuromorphic project involves collaboration with US AI firm Numenta and a Korea University research consortium, giving it the character of an external technology partnership. Such national projects also help spread part of the development cost burden through government funding.

Bear factors

Still High Earnings Volatility

Earnings volatility has been substantial, with the 2025 annual operating margin falling to -66.4%, and the scale of the Q2 2026 return to profit remains modest. The history of quarterly revenue swinging widely between roughly KRW 2.7 billion and KRW 6.1 billion shows revenue stability has not yet been established.

The next several quarters will likely be important in determining whether this is a trend improvement or a one-off recovery.

Customer Concentration Risk

XGSPON-related revenue appears highly dependent on a single large European telecom equipment customer, with revenue recognition timing governed by that customer's network investment schedule.

Some past contracts reportedly saw revenue recognition delayed relative to initial expectations, meaning the pace of future order expansion also remains contingent on the customer's business plans.

The fact that current production volume applies to only one model the customer has finished developing could also constrain the scale of revenue expansion.

New Businesses Still at an Early Development Stage

Both the mobility SoC and neuromorphic semiconductor projects remain at a development/sample stage under national research programs, and commercial revenue contribution could be several years away.

The automotive semiconductor segment involves regulatory requirements such as ISO 26262 and ASIL-B safety certification that must be obtained beforehand.

Until these new businesses show tangible results, the company's earnings will likely remain heavily influenced by the cycle of its existing telecom semiconductor business.

Risk factors

Customer and Revenue Concentration

The core XGSPON ASIC business is concentrated on a small number of large telecom equipment customers, so any reduction in that customer's investment or changes in contract terms could directly affect results.

Orders placed through Arrow Electronics also remain dependent on the end customer's product development and sales schedule. This concentration risk may persist until contract diversification progresses further.

New Business Execution Risk

As the mobility SoC and neuromorphic semiconductor projects are conducted as government-funded programs, their development schedules could shift depending on budget execution timing or the progress of collaboration with joint research institutions.

Entry into the automotive semiconductor market also requires obtaining safety certifications, which could delay commercialization relative to plan. If these new businesses do not progress as expected, the company's medium- to long-term growth narrative may need to be reassessed.

Small-Cap Volatility

As a small-cap growth stock with a relatively small market capitalization and limited float, the shares can be subject to amplified price volatility driven by supply-demand imbalances or thematic trading.

Changes in the shareholding structure, such as new shares issued from convertible bond conversion, can also affect supply and demand. The stock appears relatively sensitive to earnings announcements and industry or policy-related news.

What to watch next

Around mid-November 2026
This is the expected timing of the Q3 2026 earnings release, when it will be important to check whether the profit turn that began in Q2 continues and whether XGS-PON ASIC mass-production revenue keeps expanding.
Through April 26, 2027
This is the contract period for the second XGS-PON ASIC mass-production order secured through Arrow Electronics; whether additional models or order volumes are added during this period could indicate future revenue scale.
Through December 31, 2026
This marks the end of the development period for the mobility network processor SoC national project, making it worth checking progress on automotive Ethernet switch development and safety certification.
Late 2026 to early 2027
It will be important to check whether the sample chip targeted under the second-phase neuromorphic semiconductor national project is secured, and whether results from collaboration with Numenta and the Korea University research consortium are disclosed.
At the next regular disclosure
It will be worth confirming whether the balance sheet changes following convertible bond conversion, such as total equity and the debt ratio, are reflected as finalized figures in the upcoming regular business or quarterly report.

Overall view

Zaram Technology experienced volatile earnings between profit and loss from 2023 to 2025, before showing a meaningful shift in the first half of 2026 with a sharp revenue increase and a return to owner net profit in the second quarter.

The key driver of this improvement is the transition to mass production of XGS-PON ASIC for a European telecom equipment maker, supported by two production orders secured in June and July 2026.

At the same time, the company has reduced balance sheet strain through large-scale convertible bond conversion and retirement of the remaining bonds.

However, it is worth weighing the fact that revenue remains concentrated among a small number of large customers, that production volume is still limited to a single customer model, and that new businesses such as mobility and neuromorphic semiconductors remain at the national-project stage.

From a valuation standpoint, earnings-based metrics have not yet stabilized, and the stock trades in a range reflecting a premium to net asset value.

Future quarterly results, the pace of production volume expansion, and concrete progress in new businesses are likely to serve as important reference points going forward.

Sources

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

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Report written 2026-09-30 · Data as of 2026-09-29

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.