Semiconductor boom lifts equipment and materials firms, with some doubling operating profit

South Korean semiconductor equipment and materials companies posted sharp earnings gains in the third quarter, driven by surging demand for AI chips. As investment in HBM production and advanced packaging expanded, sales and operating profit rose in tandem — particularly among back-end process equipment makers. Some companies more than doubled their operating profit from a year earlier, and the improvement extended to semiconductor materials suppliers and inspection equipment component makers as well.

According to DART filings and industry sources, Hanmi Semiconductor recorded consolidated sales of 181 billion won ($135 million) and operating profit of 90.8 billion won in the third quarter of this year, up 8.9 percent and 33.9 percent, respectively, from the same period last year. Its operating profit margin widened 9.4 percentage points to 50.2 percent from 40.8 percent. The earnings drivers were its thermocompression (TC) bonders used in HBM manufacturing and its advanced packaging equipment for AI semiconductors — both high-value-added products.

Securities analysts cite the expansion of HBM4 production and the supply of next-generation packaging equipment as key growth factors for Hanmi Semiconductor. Leading Investment & Securities said the company is broadening its product lineup from conventional TC bonders to wide TC bonders and hybrid bonders. Growing equipment orders from customers tied to the HBM4 mass production ramp-up, along with new equipment addressing changes in stacking architecture, could serve as additional growth engines, the brokerage added.

Hanmi Semiconductor expects to post its highest-ever fourth-quarter sales, supported by deferred equipment revenue and expanded supply to overseas customers. The company projects it will set a new annual sales record for the third consecutive year, following records in 2024 and 2025.

Techwing, a maker of back-end semiconductor inspection equipment, also improved its earnings. The company's third-quarter consolidated sales reached 87.8 billion won, up 110.2 percent year-on-year, while operating profit rose 153.0 percent to 18 billion won. Quarter-on-quarter, sales and operating profit climbed 54.6 percent and 43.9 percent, respectively. Techwing produces memory chip inspection equipment, and the primary growth driver was increased investment in inspection processes tied to the expansion of high-performance memory production, including HBM. Cumulative sales through the third quarter of this year reached 197 billion won, up 57.3 percent from the same period last year.

Hanwha Semitech, a subsidiary of Hanwha Vision, swung to a profit on higher semiconductor equipment sales. Its third-quarter consolidated sales came in at 169.8 billion won, up 56.2 percent year-on-year, while operating profit reached 37.3 billion won, reversing a loss from the same period last year. Compared with operating profit of 14 billion won in the previous quarter, that represents a 166.4 percent increase. Semiconductor equipment sales were particularly strong, surging 115.2 percent to 84.8 billion won from 39.4 billion won a year earlier.

Nam Chae-min, a researcher at Korea Investment & Securities, said revenue from about 60 billion won worth of panel-level packaging equipment orders secured this year is being recognized faster than initially expected, and that flip-chip bonders for DDR5 packaging will serve as an additional growth driver next year.

Semiconductor materials supplier Dongjin Semichem also improved its results. The company's third-quarter consolidated sales, disclosed Tuesday, totaled 370.8 billion won, up 23.6 percent year-on-year, while operating profit rose 51.2 percent to 61.1 billion won. The operating profit margin improved roughly 3 percentage points to about 16.5 percent from about 13.5 percent a year earlier.

Dongjin Semichem supplies materials used in semiconductor manufacturing processes, including photoresists, thinners and anti-reflective coatings. Unlike equipment makers, whose results are influenced by the timing of customers' capital expenditure cycles, materials suppliers are more directly affected by changes in semiconductor output volumes and process complexity.

Vieworks, a specialist in industrial imaging equipment, also improved its profitability on the back of growth in its semiconductor inspection-related business. Third-quarter consolidated sales reached 61.6 billion won and operating profit came in at 11 billion won, up 14.7 percent and 154.8 percent, respectively, from a year earlier. Sales of industrial machine vision cameras — used in semiconductor inspection equipment and other applications — were a particular bright spot, rising 89.7 percent to 18.7 billion won from 9.9 billion won in the same period last year.

Order backlogs at front-end process equipment makers are also growing. As of the end of the first half of this year, Tes had an order backlog of about 206.9 billion won, Eugene Technology about 153.3 billion won, and Jusung Engineering's semiconductor equipment backlog stood at about 214.4 billion won.