[Edaily Reporter Shin Ha-yeon ] On the 9th, DaishinSecurities projected that SIMMTECH Co., Ltd.(222800)’s third-quarter operating profit would exceed market expectations, driven by expanded SOCAMM2 sales and an increased share of high-value-added semiconductor substrates. The firm noted that the company has entered a phase of substantial profit growth, with second-half operating profit expected to rise 122% compared to the first half, and maintained its status as the top pick in the semiconductor substrate sector. It also maintained its “Buy” investment rating and a target price of 170,000 won.

Park Kang-ho, an analyst at DaishinSecurities, stated, “We expect third-quarter operating profit to reach 83.7 billion won, representing a 33.1% increase from the previous quarter and a 575.8% increase year-over-year, exceeding both our previous estimate of 76.7 billion won and the consensus estimate of 83.0 billion won.” He added, “Based on third-quarter earnings, we believe the company is the largest among semiconductor substrate manufacturers and is highly likely to exceed the consensus.”

Third-quarter revenue is estimated at 553.5 billion won, representing a 48.5% year-over-year increase and a 7.6% quarter-over-quarter rise. The operating profit margin is projected to improve by 2.9 percentage points from the previous quarter to 15.1%.

Analyst Park explained, “The strong third-quarter performance is driven by an improvement in the operating profit margin, resulting from higher revenue from SoC-2 products compared to competitors starting in the second quarter, as well as an expanding share of MSAP revenue in the high-value-added segment due to product mix effects.”

In particular, he predicted that the pace of profitability improvement would accelerate in the second half of the year. DaishinSecurities estimated SIMMTECH Co., Ltd.’s operating profit for the second half at 170 billion won—a 122% increase compared to the first half. For the fourth quarter, it forecast revenue of 569.4 billion won and operating profit of 86.2 billion won, maintaining an operating profit margin of 15.1%.

It identified SoCam 2 as the key growth driver. SIMMTECH Co., Ltd.’s SoCam 2 module sales are expected to rise by 111.5%, from 151.8 billion won this year to 321.0 billion won next year. This represents steep growth, considering that SoCam sales totaled only 4.5 billion won last year.

Analyst Park stated, “As NVIDIA begins full-scale shipments of SoCam 2, SIMMTECH Co., Ltd.’s unique position—as a supplier to the three major memory manufacturers while simultaneously providing memory modules and semiconductor substrates—is becoming more prominent, necessitating a revaluation of the company.”

He continued, “SoCam 2 offers superior profitability compared to other memory modules and MCPs, providing a foundation for improvement,” adding, “SIMMTECH Co., Ltd. holds the largest market share among SoCam 2-related module manufacturers and is simultaneously supplying the associated semiconductor substrates, LPDDR5.”

The transition to NVIDIA’s next-generation platform was also cited as an additional growth driver. Analyst Park noted, “As NVIDIA begins expanding the adoption of SoCam 2—a server-grade memory module—starting with Vera Rubin, its market share in the server segment is expected to increase,” and added, “We anticipate that SIMMTECH Co., Ltd. will benefit even more as NVIDIA’s standing rises in next-generation semiconductor substrates following Vera Rubin.”

Improvements in the product mix resulting from the increased share of MSAP are also a factor driving profitability. The MSAP share in the third quarter is estimated at 82%, a 2 percentage point increase from the first quarter.

Analyst Park explained, “The increase in the proportion and utilization rate of products using MSAP, compared to semiconductor substrates made with the tenting method, will lead to improved operating profit margins and positive mix effects.”

To meet rising demand, SIMMTECH Co., Ltd. recently announced a capital expenditure plan totaling 274.2 billion won. The new facilities are expected to begin operations in the first quarter of 2028. This investment aims to secure a foundation for further growth by expanding production capacity for SoCam 2 modules, semiconductor substrates, and MSAP.

Earnings expectations have also been raised. DaishinSecurities raised its revenue forecast for SIMMTECH Co., Ltd. this year by 0.9%, from 2.0412 trillion won to 2.06 trillion won, and increased its operating profit forecast by 4.6%, from 235.8 billion won to 246.6 billion won. The operating profit forecast for next year was also raised by 2.8%, from 322 billion won to 330.9 billion won.