EO Technics Co., Kosdaq-listed semiconductor and display panel equipment maker in South Korea, is expected to benefit from rapidly growing flexible organic light emitting diode (OLED) market.

EO Technics disappointed the market earlier this year after its operating profit fell 27 percent on year to 5.2 billion won for the first quarter, far below the market consensus of 7.9 billion won. Its first-quarter sales of 64.2 billion won also missed the market consensus of 69.1 billion won, albeit a 6.1 percent on-year gain, as scale-down by Taiwanese chipmakers amid the slowdown in global smartphone market ate into semiconductor equipment business that accounts for 30 percent of the company’s sales.

Sales in its display equipment business that represents 41 percent of its entire sales are projected to have improved on rising demand for flexible OLED displays fabrication equipment, such as a polyimide substrate processor and an OLED film separator, amid a shift to flexible OLED as the next-generation mainstream display for smartphone and TV screens.

Samsung Display Co. recently decided to invest 929.4 billion won in building a flexible OLED display factory for smartphones in Vietnam. In April, another global display giant LG Display Co. also decided to spend additional 310 billion won to expand its flexible OLED display production on top of its last year’s investment worth 1.5 trillion won. According to global market research firm IHS Inc., the worldwide flexible OLED display market is expected to grow by more than 300 percent to $15.5 billion by 2020 from $3.7 billion this year.

Driven by the fast-growing flexible OLED market, EO Technics that supplies its equipment to major OLED display makers across the world will likely start to see its sales jump by over 20 billion won each quarter in the second half of this year, said Kim Min-ji, an analyst at Shinhan Investment. This year’s sales from display equipment business are forecast to reach 150.7 billion won, up 253 percent year over year.

Established in 1993, EO Technics owns technical expertise in manufacturing laser-based semiconductor processing equipment, and it is expected to benefit from the laser-based micro processing that is becoming a core fabrication process in semiconductor and display production on the growing demand for smaller and lighter components used in small electronic devices such as smartphones.

Global system-on-chip suppliers such as Intel Corp. and Taiwan Semiconductor Manufacturing Company Ltd. also have adopted the 14-namometer class production, half the size of the conventional semiconductor chip, since last year.

EO Technics shares closed Tuesday at 102,100 won, up 600 won or 0.59 percent, from the previous session.

By Yoo Tae-yang

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]