While forecasts predict that the semiconductor industry will receive significant attention this year, 2차전지 related stocks are still struggling. Tesla's performance has been strong, but its stock price has declined, impacting 2차전지 related stocks as well.

This article will discuss 'LX Semicon,' one of South Korea's leading semiconductor companies.

Let's first examine the global semiconductor market. Broadly speaking, the semiconductor market is divided into memory semiconductors and non-memory semiconductors. Samsung Electronics and SK hynix, companies we frequently encounter, are active players in the memory semiconductor market. CXL and HBM, which are frequently mentioned in the media nowadays, are also essentially technologies limited to memory semiconductors. Currently, South Korea's semiconductor industry is globally recognized but still mainly active in the memory semiconductor market. Companies are well aware of this situation, and the government also recognizes it. To diversify this business structure, there is a need to venture into the non-memory semiconductor market, and it is crucial to cultivate system semiconductor companies in the non-memory sector. LX Semicon is currently the most technologically advanced system semiconductor company in South Korea. LX Semicon is a leading domestic company that participated in the semiconductor exhibition held in October 2023 at COEX in Seoul, showcasing system semiconductors for vehicles and home appliances.

However, it is important to note that while LX Semicon currently plays a significant role in display-related panel technology, it has a minimal presence in the automotive semiconductor market. On the other hand, thanks to the strong support of LG Display, their display-related panel technology has already achieved global standards. So, why should we pay more attention to LX Semicon? This is because the government's system semiconductor strategy is scheduled to be announced in February of this year. The Ministry of Trade, Industry, and Energy has stated that the proportion occupied by system semiconductors is very small and that they will announce a system semiconductor development strategy by February 2024. A crucial point here is that LX Semicon, being the leading company, will receive the most attention when this development strategy is implemented. There is currently no company in South Korea that can match LX Semicon's performance. The domestic quality gap has been stagnant for a long time, but LX Semicon has already established a strong technological foundation by securing contracts with numerous display companies, including LG Display. The Minister of Trade, Industry, and Energy specifically mentioned the promotion of development in system semiconductor design houses and packaging sectors. In light of these statements, it is necessary to pay more attention to LX Semicon, the leading system semiconductor design company, AD Technology, a specialist design house company, and Hynix Micron, a packaging specialist company.

Looking at the current state of LX Semicon, it is ironic that its stock price has been very sluggish recently. This semiconductor company is not involved in themes like CXL or HBM and has no particular connection to Apple's Vision Pro. As a result, the stock price has declined significantly, but this is precisely why it is time to pay attention to LX Semicon.

According to a report from Hi Investment Securities, LX Semicon recorded a significant improvement in performance in the fourth quarter of 2023 due to the effects of the new iPhone and reduced research and development costs. DDI sales, the core of the fanless company, also rose significantly. Therefore, long-term growth remains robust, and its undervaluation due to excessive stock price decline is also attractive. Although continuous weakness in forward demand exists, this issue is largely reflected in the stock price. As a fanless company, it is not related to LCD or OLED processes and can continuously supply related technologies. Therefore, while some decline in volume may occur due to the entry of new fanless companies, trade with China-related companies will continue to be discussed. This enhances the likelihood of a positive future for the company, and its current operating profit recovery is also sharp.