IInvestor enthusiasm for artificial intelligence has seen shares in Reno Industrial, an under-the-radar South Korean semiconductor company, rise more than 70% since November. The soaring stock price has made Lee Chae-yoon, the company's founder and CEO, South Korea's newest billionaire and home to some of the biggest players in the chip industry that powers AI. He is the 2nd richest man, but will be minted by AI. boom.
With a 35% stake, Mr. Lee, 73, is the largest shareholder in Reno Industrial, which is listed on South Korea's technology-rich Kosdaq stock exchange. forbes As of Thursday's stock market close, Mr. Lee's net worth was estimated at $1 billion.
Leeno, based in the southern port city of Busan, manufactures parts for semiconductor inspection equipment that inspects chips for defects. The company's main products are IC test sockets, which help test if a chip is working, and Leeno Pins, which are pins that help check chips and printed circuit boards for defects. According to Leeno, it has 1,020 customers worldwide, including J.Y. Lee's Samsung Electronics (no relation to Lee Chae-yun), Choi Tae-won's SK Hynix, Jensen Hwang, etc. His company, Nvidia, is said to be included.
Like many companies in the notoriously cyclical semiconductor industry, Reno reported declining sales and profits in 2023 due to weak demand for smartphones and personal computers. The chip test maker reported a 27% year-on-year decline in sales to 197.6 billion won ($151 million) and a 21.4% year-on-year decline in net profit to 83.5 billion won for the first nine months of 2023. did.
But investors believe the AI ​​boom driven by Nvidia's graphics processor chips will boost Reno's earnings. A similar scenario is playing out at Hanmi Semiconductor, whose stock price has risen 600% in the past 12 months despite declining profits and sales in 2023. The stock price surge was driven by investor optimism that the company's semiconductor manufacturing equipment would be put to good use in the future. Kwak Dong-shin, CEO and largest shareholder of the company, which makes chips for AI, became a billionaire in July last year.
“Increasing demand for R&D due to the introduction of new devices such as OnDevice and the fact that Meta, Google, Amazon and others are developing their own NPUs bodes well for the company's future performance. ''' Jessica Kwagu, a senior analyst at Hyundai Motor Securities, who rates Reno as a buy, commented on the company's stock price rise in an email. An NPU (neural processing unit) is a chip designed for deep learning and machine learning applications.
“I also think the stock did well because this very conservative company has a lot of room for improvement given its plans to double its production capacity,” Kwagu added. Leeno announced in December 2022 that it had acquired a 72,519 square meter industrial facility in Busan for 75.5 billion won (approximately $60 million) to expand its production capacity.
Leeno said in its third quarter report that technology trends such as AI, Internet of Things, AR, VR and autonomous driving are driving demand for semiconductor inspection equipment.
Mr. Lee founded Leeno (the name is a combination of Mr. Lee's and his wife's last names) in 1978, nine years after graduating from Gwangseong Technical High School in Busan. The company was listed on South Korea's technology-rich Kosdaq stock exchange in 2001. In 2018, Mr. Lee was appointed chairman of the Regional Innovation Council in Busan, South Korea's second largest city.
Mr Lee is the latest Asian billionaire to make his fortune in the semiconductor sector. Other chip billionaires in the region include Morris Chan of Taiwan Semiconductor Manufacturing Co., the world's largest maker of advanced chips, and Tsai Ming-kai of MediaTek, a Taiwanese chip design company. In South Korea, Jay Y. Lee's Samsung Electronics is the world's largest memory chip maker and the only contract chip maker outside of TSMC capable of producing today's cutting-edge chips. SK Hynix, led by South Korean Choi Tae-won, is the world's second largest memory chip manufacturer. The Uchiyama family of Lasertec, a Tokyo-based semiconductor testing equipment manufacturer, is among Japan's top 50 richest people.
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