Chip fabless firm Fadu made repeated apologies during its annual shareholder’s meeting amid lackluster earnings and the drop in share prices.
The company’s share prices opened at 31,000 won per share when it went public last year but as of Thursday, its shares were trading at 16,280 won per share, a drop of close to half.
Following its IPO, for two straight quarters afterward the company reported almost non-existent revenue which caused outrage among shareholders that it was overvalued from the start.
On Thursday, Fadu CEO Jihyo made repeated apologies to gathered shareholders, while saying that it was “overconfident” in 2022 before its IPO because it gained a huge global customer __ US firm Meta.
Lee also claimed that the company failed to predict the macroeconomic cycle in 2023, referring to the downcycle of the global chip market.
Fadu was founded in 2015 and specializes in controllers for solid-state drives (SSD). Its customers include SK Hynix and Meta.
It recorded 56.4 billion won in revenue in 2022 and prior to its IPO said it expected revenue of 120 billion won in 2023 but ended up only making 22.5 billion won, a sixth of what it promised.
Fadu also promised a revenue of 619.5 billion won in 2025 but the CEO said the company was no longer confident in those numbers. However, earnings are expected to improve starting in the second quarter this year, he said.
It had an adjusted internal revenue goal and also a new NAND-making customer that will help with its long-term growth, Lee added. Fadu will also start the production of Gen 5 SSD controller this year, he said.
