Simmtech Graphics has turned a profit in the first quarter thanks to its focus on GDDR6.
The Japan-based subsidiary of Korean printed circuit board (PCB) maker Simmtech posted 200 million won operating profits and 38.3 billion won in revenue in the first quarter, according to its filings to the Financial Supervisory Service.
Revenue rose 69% from a year ago while profits turned to the black. The company, formerly named Eastern, was acquired by Simmtech in 2016. It accumulated loss of 86 billion from 2017 to 2019.
Simmtech Graphics said its focus on GDDR6 PCB for graphic cards contributed to the turnaround.
The company and parent company Simmtech signed supply deals worth 110 billion won and 40 billion won, respectively, with US chip giant Micron in March. The deal will likely help Simmtech Graphics’ performance this year.
In 2019, the company said it will increase profitability from its supply of PCB for cameras that were headed for Apple’s iPhones.
That year, Simmtech Graphics begin producing flip chip chip-scale package (FC-CSP) in the third quarter. The packages were bought by Sony that used it in making its own rear camera’s sensor that was supplied to Apple.
Simmtech Graphics said the deal would help it lessen its losses but the company posted 57.3 billion won in annual operating loss in 2019, triple its own estimate made prior.
Parent firm Simmtech last year turned to the red from Simmtech Graphics’ lackluster performance. It posted 17.9 billion won in annual operating loss, much higher than its initial estimate of 5 billion won.
Debt remains an issue for the company __ it had a debt ratio of 420% last year. Simmtech secured 92.4 billion won in capital in March to offset this and the debt ratio is expected to fall to 300%, which is still high, however.
Meanwhile, Simmtech posted 13.6 billion won in operating profits and 290.2 billion won in sales in the first quarter this year. It is a return to black in terms of profit and a 41.3% increase in revenue from a year ago. High demand for semiconductors from data centers helped the turnaround.
