Haesung DS expected to record high profits in Q2

Haesung DS is expected to beat market expectations in its second quarter operating income, TheElec has learned.

The automobile chip board company is expected to record late-10 billion won in operating income in the quarter, people familiar with the matter said.

This will be around 20% higher than the current market consensus of 14 billion won, they said.

Last year in the second quarter, Haesung DS recorded 118.9 billion won in sales and 14.6 billion won in operating income.

The high profitability is thanks the slowdown in the price rise of coppers.

The price rise in the raw material was also reflected in the price of automobile chip boards it sells.

Haesung DS also had over six months worth of remaining orders as of June, the people said.

Automobile companies are increasing their investor under expectations that the current chip shortage will ease.

Lead frame accounts for 70% of Haesung DS’ sales, while semiconductor packages account for 30%. Lead frame offers electric signal transmission between the chip and the board. It is used in wire bonding.

Lead frame is divided into stamped IC lead frame and etched IC lead frame. The metal is punched in in the former while the circuit on the latter is etched. The former is used for less sophisticated processes. The latter is used for advanced ones. In 2019, Haesung ranked sixth in the global lead frame market with a share of 7.4%, according to the company. 

In terms of sector, automobile and mobile each accounts for half of Haesung’s sales. It is seeing demand increase from notebooks. Automobile chip boards require longer times for customer approval due to the higher reliability required. The company recorded 137.4 billion won in sales and operating income of 10.1 billion won in the first quarter.