Wipam touts expansion to China ahead of IPO

South Korean power amplifier (PA) company Wipam will began supplying its goods to a Chinese smartphone company in the second half of the year, CEO Yu Dae-kyu said on Wednesday.

It will open a branch office in China as this is required for a 1st tier supplier to the company, Yu said at the company’s press conference at Yeouido, Seoul for its upcoming initial public offering (IPO). The process won’t take long and sales from the supply will occur in the second half of the year, the CEO said.

Wipam is a fabless company __ meaning it doesn’t have a fabrication plant __ in PA modules. PA modules for smartphones is dominated by Broadcom, Skyworks, Qorvo, Qualcomm and Murata. Due to the US-China trade war, Chinese smartphone companies are changing their former US supply to those from other countries.

Wipam has grown thanks to its PA module supply to Samsung Electronics. According to Wipam, its supply accounted for 19% of the PA module supply to Samsung in 2018. This has increased to 37% in 2019. The company’s sales in 2018 was 64.6 billion won and this nearly doubled to 125.4 billion won in 2019, it said.

Last year, its operating profit stood at 12 billion won, more than double that of its operating profit in the previous year which was 4.9 billion won.

However, in the first quarter of 2020, it posted sales of 11.1 billion won and an operating loss of 600 million won. Yu said this was due to the halt in smartphone factories run by clients due to the COVID-19 pandemic. WiPam won’t fare any better in the second quarter, the CEO said, but its total annual sales will still exceed that of 2019, he added.

Samsung Electronics is planning to launch multiple 5G smartphones later this year to offset its performances in the first half of the year. 99% of Wipam’s sales last year came from Samsung, and this plan by the South Korean tech giant will likely boost the PA module company’s fortune later this year.

Wipam is planning to supply its goods to Huawei, Transsion and Xiaomi in China. Transsion, despite being relatively unknown abroad, sold 137 million units of mobile phones last year. 

Wipam is hoping for a 9,700 won to 11,000 price per share and is aiming to secure between 72.1 billion won to 91.7 billion in public funding. Its public offering price will be finalized after its demand forecasts to be held from July 16 to 17. It will list on KOSDAQ on July 31. 

Chinese investors own a 7.03% stake in the company. The company is thought to have secured around 20 billion won in funding from the stakes. In 2018, Wipam issued redeemable convertible preferred stock priced at 9,050 won per share.

PA modules are the radio frequency front ends of smartphones. PA modules are grouped together with a switch, filter and low noise amplifier among other components to become a front end module. Smartphones have multiple front end modules.

Yu said it had its proprietary structure to design power amplifying semiconductors. Wipam receives silicon wafers from Japan’s Sumitomo and Taiwan’s VPEC and uses Taiwan’s WinSemiconductor’s contract line to make gallium arsenide (GaAs) transistors. These transistors are used to make the PA modules.