November 22, 2024

• 

[THE INVESTOR] Growth prospects look bright for Koh Young Technology, the global No. 1 investor and provider of 3-D electronics inspection equipment, with electronic gadgets growing in sophistication and dominating daily lives.

Established in 2002, Koh Young is a leading provider of 3-D solder paste inspection, called SPI, and 3-D automated optical inspection equipment, known as AOI, for about 1,800 smartphone makers, auto part makers and defense-related businesses around the world. 

 

Koh Young's 3-D inspection system products. Koh Young Technology.

The firm produces inspection equipment that examines how well intricate parts in electronic products are embedded. Koh Young’s 3-D equipment filter out faulty combinations of parts by gauging the heights and volumes of each part in electronic devices.

In more technical terms, Koh Young builds equipment that inspects planted circuit boards, known as PCB, in electronics parts during the assembly process using surface mounting technology, or SMT.   

“KY finds out defects of various manufacturing processes on a real-time basis and diagnoses the cause of defects,” said Park Hyun-soo, a manager at Koh Young’s management planning team. “KY’s 3-D inspection system delivers accurate and precise inspection results. With the technology we developed so far, we provide an inspection system which has low false calls, zero escapes and less fine tuning.”

Before 2010, there were only 2-D AOI equipment, but this changed when Koh Young invented the first 3-D version in the world.  

Driven by the 3-D AOI growth, the company achieved its biggest-ever earnings in the second quarter. It recorded 46.8 billion won ($42.1 million) in sales and 9.7 billion won in operating profit in the second quarter, logging 20.7 percent in terms of the proportion of operating profit to revenue.

According to an analyst report by IBK Investment & Securities, Koh Young tops the global 3-D SPI equipment market that is worth $173 million with a 49 percent share as of the second quarter of this year. The company accounts for 13 percent of the global AOI equipment market that was estimated to be worth $342 million as of 2015. 

“Since Koh Young gets new clients every year and is seeing new demand for replacement, growth prospects for these two products are very positive in the future,” said Woo Chang-hee, an analyst at IBK.

As automobiles become more electronic and use more electronic parts and devices, automakers’ demand for inspection equipment is growing. 

“Because electronic parts going into vehicles directly lead to the matter of safety, the demand for Koh Young’s 3-D equipment is rising more than ever,” Woo said.

About 30 percent of the company’s clients are carmakers, and the percentage is forecast to continue growing in the future, he added.

“Considering a continuous growth of the 3-D AOI market and rising demand from automakers, the firm is expected to show favorable performances,” the analyst said. “The company’s value is currently being undervalued, so we expect further appreciation.”

He projected the firm to obtain a nearly 46 percent increase in its annual operating profit by the end of this year to reach 34.2 billion won. The company is the 47th largest on the Kosdaq and its shares were traded at 42,450 won on Monday. The 52-week-highest was 47,150 won.

Koh Young is planning to expand its business into the medical industry and is now preparing to commercialize a 3-D surgical robot for brains with the goal of winning approval from the Korea Food and Drug Administration by this year and from the US next year.

“We are in the last stage of the development, and things are expected to go smoothly as planned,” the company manager said.

The company has been working with a couple of university hospitals in Korea and Harvard Medical School in the US.

By Song Su-hyun/The Korea Herald (song@heraldcorp.com)