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[Sector-Specific Stocks] Chips&Media Shares Surge on Projected Increased Order Flow from Chinese AI Chip Makers

Seoul, South Korea – Dec 19, 2024

Chips&Media (094360) shares are trading strongly, buoyed by securities firm analyses projecting increased order volumes from Chinese AI chip manufacturers. 

According to MP DOCTOR, on December 19th, Chips&Media shares were trading at KRW 16,680, up 5.17% (KRW 820) from the previous trading day as of 9:23 a.m.

Hyundai Motor Securities analyst Yoon Dong-wook attributed this positive performance to strong third-quarter results. "Third-quarter sales increased 16.2% to KRW 7 billion while operating profit surged 174.5% QoQ to KRW 1.7 billion," he explained. "This growth was primarily driven by the first NPU IP licensing agreement, renewed licensing agreements with existing clients, and increased royalty income from key customers."

Yoon highlighted the company's joint venture (JV) in China, established in September this year, as a key driver of future growth. "The JV can be the investment highlight, aiming to significantly increase sales to Chinese AI chip manufacturers," he stated. “Given the growing global industry interest in ASICs (Application-Specific Integrated Circuits), Chips&Media's NPU IP is well-positioned to gain traction in the ASIC market."

Yoon further emphasized the potential benefits of intensifying US-China AI competition. “Chips&Media has established a JV with its distributor in China and plans to deliver more vigorously to AI chip makers in China through the JV. China's efforts to develop its own AI chips, driven by geopolitical factors, could create favorable market conditions for Chips&Media,” he noted.

“The company has also secured video codec licensing agreements for the AI PC chipset for X-Elite with Qualcomm, a global fabless semiconductor company. While currently limited to licensing agreements for PCs, there is potential for future royalty contracts related to AI mobile chipsets," Yoon forecasted. "The expanding market for AI chips in servers and on-device AI applications will continue to fuel the company's growth."

(https://www.edaily.co.kr/News/Read?newsId=02141846639120160&mediaCodeNo=257&OutLnkChk=Y)