[Edaily Reporter Kim Hyung-il ] KYOBOSECURITIESCO.,LTD. forecasts that SIMMTECH Co., Ltd.(222800)will continue to post solid earnings, driven by growing demand for AI server circuit boards and an increasing share of high-value-added products. The firm notes that concerns over potential supply shortages of memory (BT) circuit boards—particularly those for memory and server controllers—could strengthen the company’s pricing power. It maintained its “Buy” rating and target price of 180,000 won.

On the 22nd, Park Hee-cheol, an analyst at KYOBOSECURITIESCO.,LTD., estimated SIMMTECH Co., Ltd.’s third-quarter revenue at 560.6 billion won—a 50.4% increase year-over-year. Operating profit is expected to rise 353.5% year-over-year to 84.3 billion won, with an operating margin projected at 15.0%.

The main reason for slightly lowering the earnings forecast from previous estimates is a change in exchange rate assumptions. However, from a business perspective, the firm assessed that the positive effects of improved product mix—centered on SOCAMM modules, high-value-added multi-chip packages (MCPs), and flip-chip chip-scale packages (FC-CSPs)—are continuing. The company explained that the growing revenue share of high-value-added products is offsetting the impact of external variables such as exchange rates and raw material prices.

The company identified the expansion of SOCAMM volume and the strengthening of pricing leverage for BT substrates as key growth drivers going forward. SOCAMM is a server memory module based on LPDDR, a type of low-power DRAM. As the value of Vera—the central processing unit (CPU) relevant to the Agent AI era—increases and the LPDDR-based SOCAMM ecosystem expands, SIMMTECH Co., Ltd.’s related revenue is expected to continue its growth trend.

The possibility of a supply shortage for BT substrates is another positive factor. Recently, major substrate manufacturers have focused on expanding ABF substrate production, leaving BT substrates relatively sidelined in these expansion efforts. Conversely, as demand for BT substrates continues to grow—particularly for memory and server controllers—concerns about a potential supply shortage are emerging.

Analyst Park noted that if a supply shortage materializes, SIMMTECH Co., Ltd.’s pricing power would increase, and the upward trend in average selling prices (ASP) could accelerate. The analysis suggests that if rising product prices are combined with an expanding share of high-value-added products, further improvements in profitability can be expected.

KYOBOSECURITIESCO.,LTD. estimated SIMMTECH Co., Ltd.’s annual consolidated revenue for this year at 2.0982 trillion won, a 48.7% increase from the previous year. Operating profit is expected to reach 254.4 billion won, a 2,042.7% year-over-year increase, with an operating margin projected at 12.1%.

Analyst Park explained, “Although we have slightly adjusted our earnings estimates due to changes in macroeconomic variables, the business trend remains robust,” adding, “Since the company has secured clients not only among key domestic customers but also across various regions, it is highly likely to keep pace with the overall growth trend of the PCB market.” He further noted, “Considering the growth potential of its core product lines, its position within the industry, and the favorable pricing environment, a ‘buy’ stance remains valid.”