SoluM is aiming to surpass BOE in electronic shelf labels (ESL) within the next three years to become the world’s largest vendor, CEO Jun Sung Ho said on Wednesday.
In 2019, BOE acquired France’s SES Imagotag, which is the world’s largest ESL maker. Ranked second is Sweden’s Pricer. SoluM is third.
SoluM was formed in 2015 when it split off from Samsung Electro-Mechanics.
CEO Jun recruited engineers from Samsung Electronics four years ago for the ESL business, when Samsung Electro-Mechanics had put aside the business.
SoluM aimed to make ESL a solution business rather than a device business by securing software competence.
The company can design, produce and distribute ESL in turn-key for customers.
The CEO said use of ESL at offline stores allowed them to react to peak sales during the weekends flexibly.
Importance of ESL for retailers has risen due to increased competition between online and offline stores as well as between offline stores, Jun said.
SoluM is supplying its ESL to Lowe’s and Loblow in the US and Rewe and Edeka in Europe. It is also supplying them to Lotte Mart and Home Plus in South Korea.
SoluM will need to expand in Europe for growth. The company has been reacting quickly and offering longer lasting and higher performance ESL in Europe to compete with SES Imagotag.
The company’s ESL business is expected to post 2.5 times higher sales in 2021 compared to last year from winning big orders, Jun said. SoluM posted 120 billion won in sales last year. It is in talks with clothing companies to supply ESL.
SoluM is also expecting growth in its 3 in 1 module for TVs. The module combines the power module, tuner and video board into one. The company supplies to Samsung Electronics for the latter’s mid-tier TVs.
SoluM pitched the 3 in 1 module to Samsung Electronics first. The company sold 13 million units last year. The company accounts for 90% of the modules supplied to Samsung, the remaining 10% is supplied by Hansol Technics.
Samsung applies the 3 in 1 module to around 25% of its TVs but this will increase to 75% in the next three years, the CEO said.
3 in 1 module and ESL accounted for only 10% of SoluM’s sales in 2017 but this has increased to 56% as of the third quarter of 2020, Jun said.
SoluM has previously relied on power modules for TVs and handsets.
The company also has patents that make the transformer thinner in power modules for TVs. The module is used by Samsung Electronics for its QLED brand of liquid crystal display (LCD) TVs. SoluM is planning to diversify its power module business to servers, networks and solar cells.
In 2020, SoluM posted accumulated sales of 812 billion won and operating income of 45.7 billion won as of the third quarter.
From 2017 to 2019, the company grew at a rate of 29% per year. CEO Jun is the largest shareholder with 16% equity. Samsung Electro-Mechanics owns 10.94% and KB Stonebridge Secondary PEF owns 9.58%. Jun previously was the regional director for CMOS image sensor at Samsung Electronics. He was also the director at the digital module business of Samsung Electro-Mechanics.
SoluM is aiming to list on KOSPI in February. It is offering 6.4 million shares and is asking for 13,700 won to 15,500 won per share. Its demand forecast will run from January 14 to 15. Retailer order will run from January 21 to 22. Mirae Asset Daewoo and KB Securities are underwriting the deal. Hana Financial Investment and Shinhan Financial Investment are co-underwriters. Samsung Securities is part of the group.