02 024110 Korea Circuit Co., Ltd. Loading... : Bullish and Bearish Analyst Opinions

The CEO highlights that Korean semiconductor equipment, materials, and substrate stocks (소부장, 기판) are showing strong recovery and hitting new highs despite recent volatility. He notes that many stocks, such as PSK, Eugene Technology, TES, and Jusung Engineering, have overcome the correction caused by forced selling of semiconductor equipment ETFs. The sector is being driven by a persistent global shortage in semiconductor equipment, as mentioned in a recent US report. He points to the broad strength across small-cap equipment names and argues they are leading the KOSDAQ rebound.

Semiconductor equipment and materials (소부장) stocks such as Simtech, Korea Circuit, Daeduck Electronics, TLB, and others have weakened recently due to a temporary supply-demand imbalance caused by the listing of single-stock leveraged ETFs. This is a technical, not fundamental, issue. Once the rebalancing is complete (about a week), these stocks should rebound as fundamentals remain strong. Key sub-sectors include substrates, packaging, glass substrates, EMIB, CPO, and GaN/SiC power semiconductors. Among them, Korea Circuit and Haesung DS are relatively undervalued, while Daeduck Electronics and Simtech have high earnings expectations.

The AI substrate sector is in a golden age. Large-cap substrate stocks (Samsung Electro-Mechanics, LG Innotek) had a volume spike today, indicating some holders are taking profits and the near-term outlook is uncertain. In contrast, Kosdaq-listed substrate stocks (Korea Circuit, Daeduck Electronics, Isu Petasys) are rising on lower volume, suggesting holders are not selling and there is room for further upside. Therefore, Kosdaq substrate stocks are more attractive for continued investment.

As the AI agent era drives increasing demand for CPUs, the substrates and foundry technology for CPUs must become more advanced. Korean companies such as Simmtech (substrate) and Korea Circuit (substrate) are direct beneficiaries of this trend, often showing stronger upward momentum than Samsung Electronics and SK Hynix during CPU-focused market phases.

Substrate (기판) suppliers are in a powerful upcycle: capacity is constrained, demand is surging due to larger and multi-layer substrates for AI chips, and raw material costs are rising, pushing average selling prices up more than 20% in Q1. The trend is expected to continue into the second half. Leading companies include Simmtech, TLB, Korea Circuit, Daeduck Electronics, and ISU Petasys.

The AI investment theme is shifting from memory (DRAM, HBM) to CPU-side components. Broadcom's Vela chip is driving huge revenue, and the CPU ecosystem (LPDDR, substrates, OSAT, MLCC) is the next area of growth. Investors should focus on CPU-related stocks as the new leaders in the semiconductor supply chain.

NVIDIA’s Vera CPU volume is increasing threefold, which will boost demand for AI substrate stocks such as Simtek and TLB.

Nvidia's Vera and Grace GPU architectures require significantly more CPU substrates, with volume expected to triple. This directly benefits substrate and PCB companies such as Simtech, TLB, and Korea Circuit, whose products are in short supply. These stocks should see sustained demand growth from the AI infrastructure buildout.

Substrate stocks benefit directly from the Vera Rubin CPU upgrade which triples LPDDR memory demand and increases socket demand. Buy substrate stocks including Simtech, Korea Circuit, and LG Innotek.