[Edaily Reporter Kim Hyung-il ] Yuanta Securities Korea assessed that ISUPETASYS(007660)is seeing earnings growth driven by structural demand resulting from expanded investment in artificial intelligence (AI) application-specific integrated circuits (ASICs) and networking, as well as the effects of increased production capacity. The firm forecasts that this growth trend will continue, bolstered by an improved product mix and price hikes. It maintained its “Buy (BUY)” investment rating and target price of 180,000 won.

On the 25th, Go Seon-young, an analyst at Yuanta Securities Korea, stated, “Consolidated revenue for the second quarter reached 379.9 billion won, a 57.4% increase year-over-year, while operating profit stood at 77.1 billion won, recording an operating profit margin of 20.3% and setting a new quarterly record.” She analyzed that this was “the result of structural demand driven by expanded investment in AI ASICs and networks, combined with the effects of increased production capacity.”

At ISUPETASYS, revenue and operating profit expanded as the product mix improved—centered on AI accelerators and switches—while the share of low-margin server sales shrank from 14% in the first quarter to 9% in the second quarter. Robust customer demand was also reaffirmed through an increase in the order backlog.

The Chinese subsidiary is diversifying its customer base, and its production capacity for high-layer (VIPPO) products is expected to increase by approximately 15% starting in the fourth quarter compared to previous levels. The U.S. subsidiary is expanding its customer base, with the number of customers generating annual revenue of over 10 billion won set to rise from two in 2025 to four in 2026.

The company identified three key drivers for future growth: expansion of production capacity, improvement of the product mix, and price increases.

ISUPETASYS’ revenue-generating production capacity is projected to expand sequentially from 120 billion won per month in the second half of this year to 150 billion won per month in the first half of 2027 and 180 billion won per month in the second half of 2028. Investment in Plant 7, dedicated to high-density interconnect (HDI) boards, has also entered the review stage, and analysts assess that this has established a structure where the benefits of capacity expansion will continue on a semi-annual basis for at least the next three years.

The share of high-value-added multi-layer products is also expanding. The revenue share of multi-layer products (Multi-LAM + HDI) rose from 7% in the first quarter to 11% in the second quarter, while their share of orders increased from 11% to 23% over the same period. Since the average selling price (ASP) is 2 to 3 times higher than that of VIPPO, profitability is expected to improve as the share of multi-layer products increases.

Price hikes are also underway. Analyst Ko explained, “Price negotiations are scheduled to begin in August and conclude in October,” adding, “Although there are differences depending on the client, an average increase of around 15% is currently under discussion.” The price hikes are expected to be fully implemented starting in the fourth quarter, and it is understood that there is room for renegotiation should raw material prices rise further.

Yuanta Securities Korea has raised its operating profit estimates for 2026 and 2027 by 4.2% and 11.3%, respectively, compared to previous projections. Analyst Ko assessed, “Based on robust demand from Big Tech, three growth drivers are operating simultaneously: production capacity expansion set to continue for at least three years on a semi-annual basis; product mix improvement driven by an increased share of high-value-added multi-layer products; and price increases.”