SIMMTECH Profit Surges After Capacity Utilization Clears Break-Even

Дата публикации: 14-08-2026 21:59:34

SIMMTECH’s factory utilization rate moved above its break-even point, driving a sharp increase in profitability. SIMMTECH is the company’s official English name.According to filings with the Financial Supervisory Service’s electronic disclosure system on August 14, SIMMTECH posted an average utiliza

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SIMMTECH’s factory utilization rate moved above its break-even point, driving a sharp increase in profitability. SIMMTECH is the company’s official English name.

According to filings with the Financial Supervisory Service’s electronic disclosure system on August 14, SIMMTECH posted an average utilization rate of 80.4% in the first half. Given a utilization rate of 78.9% in the first quarter, second-quarter utilization is estimated at 81.9%. SIMMTECH’s break-even utilization rate is in the upper 70% range.

Profitability rose sharply as utilization exceeded the break-even point. Second-quarter operating profit jumped 11-fold from a year earlier to 62.9 billion won and increased 358.7% from the previous quarter. Revenue rose 51.0% from a year earlier and 21.8% from the previous quarter. The increase in operating profit significantly outpaced revenue growth. The operating margin reached 12.2%, up 8.9 percentage points from the previous quarter and moving into double digits.

The result reflects the characteristics of a capital-intensive industry with a high proportion of fixed costs. Semiconductor substrates carry a heavier burden from fixed costs such as depreciation and labor than from raw materials. Those costs change little even as production increases. Once utilization moves above the break-even point, the incremental cost of additional production is relatively small, allowing a large portion of additional revenue to flow through to operating profit.

“Semiconductor substrates are a capital-intensive business with a high contribution margin,” an industry official said. “Once the break-even point is exceeded, most additional revenue translates into profit, so profitability can change significantly even with an increase of only a few percentage points in utilization.” Contribution margin refers to the portion of sales remaining after variable costs that contributes to fixed costs and profit.

Utilization is also expected to continue rising in the second half. SIMMTECH forecasts consolidated second-half revenue of 1.0719 trillion won and operating profit of 163.1 billion won. Revenue would rise about 14% from the first half, while operating profit would increase 113%.

A higher share of high-value products also contributed to the improvement in profitability. Demand for server substrates has increased as investment in artificial intelligence (AI) data centers expands. As memory products transition from DDR5 to DDR6, low-power double data rate (LPDDR) 6 and GDDR7, the number of substrate layers and processing steps is increasing, pushing up average selling prices (ASPs).

Revenue from modified semi-additive process (mSAP) products, which use a fine-circuit manufacturing process, reached 307.2 billion won, up 56% from a year earlier. Flip-chip chip-scale package (FC-CSP) products grew, led by system integrated circuit (IC) and automotive products. System-in-package (SiP) modules used in wearable products such as watches also entered a period of meaningful growth. In the second half, demand for module substrates including Small Outline Compression Attached Memory Module (SOCAMM), Low Power Compression Attached Memory Module (LPCAMM) and Compute Express Link (CXL) is expected to expand sharply. SIMMTECH lists SOCAMM, LPCAMM and CXL module PCBs among its next-generation memory-module products.

The substrate industry is seen as entering the early stages of a new growth cycle following the boom triggered by the COVID-19 pandemic. During the pandemic, demand for finished products such as PCs and smartphones surged, driving rapid short-term growth. In the current cycle, however, demand is expected to grow steadily and more gradually, led by servers and supported by AI data-center investment.

After new production lines at memory-chip makers SK hynix and Samsung Electronics begin full-scale operations next year, higher shipments are expected to provide an additional boost. For now, a larger share of high-value products is driving results, but increased memory production capacity will also support earnings by boosting substrate volumes.

SIMMTECH remains cautious about new capacity expansions, however. The company believes its existing production capacity can meet demand through next year, with maximum utilization currently at 97%. Any decision on further expansion will take into account AI demand growth and overall market conditions.

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