[Ansan (Gyeonggi) = E-Daily Reporter Yun Junghoon ] “In the past, the cost of memory chips accounted for less than 10% of the supply price, but now it makes up as much as 60–70%. We’ve reached a point where we can’t buy them even if we want to because we don’t have the money.”

Kwon Oh-gil, production manager at Marsis—a set-top box manufacturer—made this remark during a visit on the afternoon of the 20th to the company’s subcontracted production facility located in the Sihwa Industrial Complex in Gyeonggi Province. Upon entering the assembly line on the fifth floor of the SM ENTERTAINMENT CO., Ltd. factory—the subcontractor—a cool, pleasant breeze greeted us, in stark contrast to the muggy air outside. The conveyor belt moved at a steady pace, and on it, KTCorporation’s artificial intelligence (AI) set-top box, the “Genie TV Set-Top Box A2,” was being assembled and tested, one after another, until completion. This factory produces 200 to 250 set-top boxes per hour, averaging about 2,500 units per day.

One memory module pack costs 90 million won… Securing inventory is also a battle of financial strength

The reason this production line has been able to operate stably despite the sharp rise in memory prices is that KTCorporation(030200)provided advance payments to its partner companies for memory purchases. As the price of memory used in set-top boxes has skyrocketed, securing inventory—which used to be manageable without significant burden—now requires funds ranging from several billion won to nearly 10 billion won.

In the second-floor materials warehouse, temperature and humidity were being carefully controlled to store key components such as memory chips. The on-site temperature was 23.6 degrees Celsius, and the humidity was 8.3%. Main integrated circuits (ICs) and memory chips require meticulous management, as defects can occur during the production process depending on storage conditions.

Kim Ki-hoon, Team Leader of Business Team 1 at Marcis, explained, “Key materials such as main ICs and memory ICs require special care because defects can occur during the production process if humidity is not properly controlled.”

One vacuum-sealed pack of memory contained 1,050 LPDDR5 32GB RAM modules. The price was approximately $60,000, which is over 80 million won. Based on the same product and quantity, the price—which used to be around $6,000—has risen nearly tenfold over the past two to three years.

The sharp rise in memory prices has even altered the manufacturing cost structure. The proportion of memory costs in the total set-top box supply price—which previously accounted for less than 10%—has recently risen to 60–70%. Under this structure, any increase in memory prices inevitably causes significant fluctuations in the overall product cost.

The funds required to secure inventory have also skyrocketed. In the past, securing a month’s worth of memory inventory cost less than 1 billion won, but now, preparing a month’s supply requires funds ranging from several billion won to nearly 10 billion won. For small and medium-sized enterprises, securing inventory has effectively become a financial burden in itself.

Marsis supplies set-top boxes to KTCorporation, SK Broadband, LG Uplus(032640), KT Skylife Co., Ltd., and cable TV operators. It also exports products to overseas markets such as Japan and Europe. Although the company has been in business for about 30 years, the sharp rise in memory prices remains an unavoidable burden.

KTCorporation Provides 36.5 Billion Won in Advance Payments to Partners… Marシス Receives Over 21 Billion Won

KTCorporation is providing advance payment support to its partners to address uncertainties in memory supply and rising prices. The total advance payments KTCorporation has provided to all its partners exceed 36.5 billion won. Of this amount, Marsis received approximately 21.2 billion won in two installments.

The key objective of the advance payment support is to share the financial burden so that partners can secure the necessary inventory before memory prices rise further. Through this support, Marsis secured inventory equivalent to approximately 400,000 units of memory. In the first half of the year, the company also secured memory equivalent to approximately 200,000 to 230,000 units to prepare for delivery.

KTCorporation explained that through these two rounds of support, partner companies saved a total of 10.4 billion won in memory purchase costs. Specifically, the first round of support—which enabled the preemptive procurement of key memory types such as DDR4—resulted in savings of 2.2 billion won, while the second round—which secured memory such as LPDDR5 and eMMC—led to savings of 8.2 billion won.

Kwon Bong-kyu, Head of Sales and Marketing at Marシス, said, “Unlike in the past when inventory was plentiful, a company’s survival now hinges on whether it has sufficient funds.” He added, “Thanks to KTCorporation’s proactive advance payment support—which involved persuading internal stakeholders—we were able to purchase memory at the desired time and overcome the crisis.”

Marsis has been doing business with KTCorporation for about six years. KTCorporation is a major client, accounting for around 70% of Marsis’s revenue. This year, Marcis’s shipments to KTCorporation total approximately 800,000 units, amounting to about 100 billion won. Marcis’s total domestic set-top box shipments this year are approximately 1.3 million units, with sales reaching about 130 billion won.

The growing demand for memory in set-top boxes is also linked to the advancement of AI capabilities. The Genie TV Set-Top Box A2, unveiled by KTCorporation on September 1, features LPDDR5 memory, which offers higher performance than the previous DDR4 standard.

In addition to memory, manufacturing costs are rising due to price increases for other components, such as exchange rates, multilayer ceramic capacitors (MLCCs), and printed circuit boards (PCBs). KTCorporation and Marsis are sharing the cost burden through a supply price indexation system that reflects fluctuations in raw material prices and exchange rates in the supply price. Marsis expects that advance payment support for memory will continue in the future.

Marsis utilizes overseas production bases in Vietnam and China while also manufacturing key products at its domestic factories. Although domestic production entails higher costs than overseas production, the company explains that it is maintaining its domestic production lines through its partnership with KTCorporation.

Kwon Bong-kyu, Head of Sales and Marketing at Marsis, said, “Through our six-year partnership with KTCorporation, we’ve been able to expand our business—including participating in overseas trade shows together—through mutual growth programs.” He added, “With memory prices skyrocketing, making it difficult for small and medium-sized enterprises to secure inventory with their own funds, advance payment support is a great help in ensuring stable production and delivery of products.”