[Edaily Reporter Shin Ha-yeon ] On the 20th, Hana Securities projected that ASICLAND Co.,Ltd(445090)will return to profitability this year and, as mass production revenue begins to expand in earnest, will reach a tipping point in the second half of 2027 where its profit structure shifts. The firm did not provide an investment rating or target price.

Kwon Tae-woo, an analyst at Hana Securities, stated, “The key point to note is that the source of profit is shifting from one-time development settlements to mass production,” adding, “It is important to note that as the company approaches the tipping point where its profit structure changes, mass production of eSSDs will also be added to the mix.”

ASICLAND Co.,Ltd reported second-quarter revenue of 59.7 billion won this year, up 306.6% year-over-year and 10.7% quarter-over-quarter. Operating profit stood at 7.9 billion won, marking a return to profitability for the quarter. Cumulative revenue for the first half of the year reached 113.7 billion won, a 273.4% increase from the same period last year.

Second-quarter revenue consisted of 16.5 billion won from mass production and 43.2 billion won from development. Operating profit included a one-time settlement gain of approximately 5 billion won resulting from the completion of a CXL development project. However, even excluding this, operating profit stood at around 3 billion won, leading to the assessment that the company has entered a profitable structure even without one-time factors. This is due to the alleviation of cost pressures as most edge artificial intelligence (AI)-related projects—which had been the primary source of losses last year—have now been completed.

Growth in the mass production segment is also gaining momentum. Of the second-quarter mass production revenue, shipments from the Taiwan subsidiary accounted for 10.2 billion won. For SD card controllers, under an annual contract worth 26.5 billion won, revenue of 4.0 billion won was recognized in the second quarter, with approximately 20.0 billion won expected to be recognized in the second half of the year. Consequently, mass production revenue in the second half is projected to reach around 30.0 billion won, an increase of about 40% compared to the first half.

The expansion of the development contract for eSSD controllers for SK hynix was also cited as a growth driver. On the 19th, ASICLAND Co.,Ltd announced via a corrected disclosure that it had increased the contract amount from the original 31.9 billion won to 41.0 billion won. This amount represents 56.2% of last year’s revenue. Revenue from development for SK hynix is expected to total 26.0 billion won in the first half, followed by 40.0 billion won in the second half.

Furthermore, analysts projected that even if ASICLAND Co.,Ltd.’s revenue in the third and fourth quarters each falls to around 40 billion won—a decrease from the second quarter—the company will maintain its trend of quarterly profitability. Annual revenue for this year is forecast at 190 billion won, with operating profit expected to be around 8 billion won.

In the medium to long term, the analysis focused on the operating leverage effect resulting from the expansion of mass production revenue. Currently, ASICLAND Co.,Ltd’s quarterly break-even point (BEP) revenue is in the range of 38 billion to 40 billion won. The analysis suggests that once quarterly mass production revenue exceeds 30 billion won and begins to cover fixed SG&A expenses, most of the profits from the development division could be converted into operating profit.

Analyst Kwon explained, “We expect this milestone to be reached in the second half of 2027, with stable growth beginning in 2028,” adding, “Among the eight TSMC VCA partners, GUC and Alchip have their capacities fully utilized by leading-edge process volumes for hyperscalers, so projects from mid-sized fabless companies and domestic IDMs continue to flow toward Aizikland.”