[Edaily Reporter Shin Ha-yeon ] On the 22nd, NH INVESTMENT & SECURITIES assessed that TFE Co., Ltd.(425420)has secured a mass production order for its SOCAMM2 total test solution and continues to expand its base of major overseas clients. The firm projected that earnings for this year and next will grow significantly, driven by the start of operations at the new Hwaseong plant, revenue recognition from the order backlog, and the effect of price increases. It did not provide an investment opinion or a target price.

Baek Jun-ki, an analyst at NH INVESTMENT & SECURITIES, stated, “The company has secured its first mass production order for SOCAMM2 test boards, sockets, and COKs from a major domestic Client A,” adding, “The company’s strength in providing a total solution led to this order.” He further explained, “We also expect follow-up orders within the year.” The current order involves products for SOCAMM2 module testing, with the end customer being an overseas Client A.

TFE Co., Ltd. is a semiconductor test solutions company capable of supplying all components required for the semiconductor testing process, including burn-in test sockets, test boards, and COKs (Change Over Kits). Based on its technology for large-area and high-frequency sockets, the company is adapting to the next-generation artificial intelligence (AI) semiconductor environment and expanding its testing scope to include CPO (Co-Packaged Optics) and next-generation memory modules.

In particular, as orders for SoCam 2 begin in earnest, the company is expected to benefit from the growth of the AI semiconductor market. As of the first half of this year, TFE Co., Ltd.’s revenue breakdown was 41.1% from test boards, 35.1% from test sockets, and 23.8% from COKs. The revenue share between memory and non-memory products was 64% and 36%, respectively.

Direct transactions with global customers are also expanding. The company has been supplying test sockets to Overseas Company B since registering as a direct supplier in April. Previously, supplies were made indirectly through a global outsourced semiconductor assembly and test (OSAT) provider, but the company has now switched to direct transactions.

Researcher Baek stated, “We have been supplying test sockets to Overseas Company B since registering as a direct supplier in April,” adding, “Previously, we supplied products for Company B’s orders indirectly through a global OSAT, but we have now switched to direct transactions.”

The company has also secured a mass production order for general-purpose COKs from overseas Company C. The explanation provided is that the order resulted from the customer’s demand for cost savings, as the product is not dependent on any specific equipment manufacturer. The company is also pursuing plans to expand its product lineup to include test sockets in the future.

The number of projects underway with overseas Company D has increased to a total of 31. The scope is expanding to include data center network switches, CPOs, and application-specific integrated circuits (ASICs). For CPOs, the company is also developing improved test sockets designed to handle high heat generation.

In the second half of the year, earnings growth is expected to be driven by expanded production capacity and the recognition of revenue from the order backlog. The second new factory in Hwaseong is currently operating one socket production line, and an SMT line is under construction. Revenue is expected to begin in mid-October, with the goal of having all lines operational by next year.

The current order backlog stands at 65 billion won, and a significant portion of this is expected to be recognized as revenue in the fourth quarter. Revenue for July and August is also understood to have shown a positive trend. Additionally, with the recent unit price increases negotiated with clients now factored in, operating leverage is expected to expand.

Analyst Baek stated, “The current order backlog stands at 65 billion won, and a significant portion of this is expected to be recognized as revenue in the fourth quarter,” adding, “Revenue for July and August is understood to have been solid, and the trend of improved performance compared to the previous quarter is expected to continue.” He further predicted, “Operating leverage is expected to expand as the recent unit price increases negotiated with clients are reflected.”

NH INVESTMENT & SECURITIES projected that TFE Co., Ltd.’s revenue this year would reach 171.1 billion won, a 53.2% increase year-over-year, while operating profit would rise 85.3% to 35.3 billion won. The firm forecast that the operating profit margin would rise from 17.1% last year to 20.6% this year. For next year, the firm estimates revenue of 218.5 billion won and operating profit of 52.5 billion won—representing growth of 27.7% and 48.5%, respectively—with the operating profit margin rising to 24.0%.

Analyst Baek emphasized, “We expect earnings to grow significantly in 2026 and 2027, driven by the start of operations at the new Hwaseong plant, the recognition of revenue from the order backlog, and the effects of price increases.”