[Edaily Reporter KIM YOON-JEONG ] Hana Securities assessed that SIMMTECH Co., Ltd.(222800)will proactively respond to growing demand for SOCAMM and high-layer MSAP substrates for artificial intelligence (AI) servers through a new capital expenditure of 274.2 billion won. The firm projected that, despite short-term funding pressures, the company’s medium- to long-term growth trajectory remains valid.

On the 26th, Kim Min-kyung, an analyst at Hana Securities, stated, “With demand for SOCAMM for AI servers expected to grow rapidly, we view this as a decision to proactively secure dedicated production capacity.”
SIMMTECH Co., Ltd. announced new capital expenditures totaling 274.2 billion won. The investment is intended to establish a new factory dedicated to SOCAM modules and to address the growing demand for high-layer MSAP substrates, with operations scheduled to begin sequentially starting in the first quarter of 2028.
The company will invest 145.9 billion won in module printed circuit boards (PCB/HDI) to expand production capacity by more than 50%. It also plans to invest 105.1 billion won and 23.2 billion won in MSAP and system ICs, respectively, to increase production capacity by 10% and 25%.
Analyst Kim explained, “The decision to expand production capacity stems from the fact that rising demand for small-sized chips is driving increased demand for memory package substrates, including MCPs.” He noted that although the utilization rate for package substrates remained in the high 70s this past second quarter, the company is proactively expanding capacity in anticipation of future demand growth.
The possibility of dilution due to fundraising was cited as a short-term variable. SIMMTECH Co., Ltd. plans to cover the investment costs using internal retained earnings or external financing. Hana Securities estimated that, under a conservative assumption that the full 270 billion won in capital expenditures would be raised through convertible bonds (CBs), approximately 2.25 million potential shares would be added.
On a fully diluted basis—which reflects the approximately 2.32 million shares convertible from the existing 7th series CB worth 50 billion won—the market capitalization was estimated at approximately 4.9 trillion won, and the price-to-earnings ratio (PER), based on 2027 controlling shareholder net income of 394.5 billion won, was estimated at approximately 12.5 times.
However, Analyst Kim stated, “If demand for small-cell and high-density MSAPs expands as expected, profit estimates for 2028 and beyond are highly likely to be revised upward further due to increased utilization rates of new production capacity and improvements in the product mix.”
He further emphasized, “In the short term, dilution and overhang resulting from the terms of the convertible bond (CB) issuance and the volume of shares to be converted may increase stock price volatility; however, we believe the medium- to long-term direction of the stock price will be determined not by the extent of dilution, but by the scale of revenue growth and the improvement in profit margins following the capacity expansion.”