Kwak Dong-shin, CEO of Hanmi Semiconductor.
COURTESY OF HANMI SEMICONDUCTOR
As investors look for the next beneficiary of the artificial intelligence frenzy, shares of a little-known semiconductor equipment manufacturer in South Korea soared roughly 56% since Thursday, following a bullish report from Samsung Securities. The stock surge has made Kwak Dong-shin, the company’s CEO, South Korea’s newest billionaire.
Kwak, who turns 49 in December, is the largest shareholder of Hanmi Semiconductor, with a 35.5% stake in his own name. Forbes estimates Kwak’s net worth at $1.3 billion as of Monday’s close.
Based in Incheon, west of Seoul, Hanmi Semiconductor manufactures equipment used in semiconductor packaging—one of the final stages of chip production. Chip assemblers add packaging that includes a plastic frame to connect individual chips to circuit boards. Hanmi Semiconductor says it has more than 320 customers globally, including Jay Y. Lee’s Samsung Electronics, Chey Tae-won’s SK Hynix and ASE, run by Taiwanese billionaire brothers Jason and Richard Chang. Hanmi Semiconductor was named to the Forbes Asia Best Under A Billion list last year.
Samsung Securities analysts Hwang Min-sung and Ryu Hyung-keun wrote in a report published Thursday that “advanced packaging is becoming the key to improving semiconductor performance” and expects strong demand for HBM (high bandwidth memory) to bolster Hanmi Semiconductor’s revenue. The company’s shares jumped 30% that day.
HBM is a next-generation type of DRAM, a memory chip that enables devices to multitask, and is targeted for use in AI systems. Hanmi Semiconductor said in its first-quarter report that one of its products, the TSV TC Bonder, is “a key equipment for HBM chip production to implement ChatGPT, which has recently become a hot topic in the semiconductor industry, and is expected to benefit from the increased demand for HBM.”
The potential rise in demand for TSV TC Bonder is a welcome boost for Hanmi Semiconductor, which, like some other semiconductor companies, was hard hit by the tech slump caused by inflation and macroeconomic uncertainties. For the first quarter this year, Hanmi Semiconductor reported that revenue dropped 58% year-over-year to 26.5 billion won ($21 million), while operating profit plunged 90% to 2 billion won.
The decline is broadly in line with the performance of Hanmi Semiconductor’s customers as consumers and corporations cut back on new smartphones, electronics gadgets and data servers. Samsung Electronics’ revenue fell 18% and operating profit plunged 95%, and SK Hynix’s revenue dropped 58% and made an operating loss of 3.4 trillion won, down from a profit of 2.9 trillion won in the first quarter last year.
Hanmi Semiconductor was founded in 1980 by Kwak’s father, No-kwon, a former Motorola engineer, and listed on the Korea Stock Exchange in 2005. No-kwon, who turns 85 in November, serves as chairman of Hanmi Semiconductor. In 2007 and 2008, No-kwon transferred most of his shares to Dong-shin, his only son of four children. No-kwon still holds a 9% stake in his company. Dong-shin joined Hanmi Semiconductor in 1998 and became its CEO in 2007.
Dong-shin is the latest billionaire in Asia to make a fortune from the semiconductor sector. Other chip billionaires in the region include Morris Chang of Taiwan Semiconductor Manufacturing, the world’s largest maker of advanced chips, and Tsai Ming-kai of Taiwan chip designer MediaTek. In South Korea, Lee’s Samsung Electronics is the world’s largest memory chip maker and the only other contract chip manufacturer besides TSMC capable of making today’s most advanced chips, and Chey’s SK Hynix is the world’s No. 2 memory chip maker. And the billionaire Uchiyama family of Tokyo-based Lasertec, a semiconductor-testing equipment maker, made their debut on Japan’s 50 Richest list in 2021.