Dae Duck Electronics and ISU PETASYS are expected to benefit from the MLB (Multi Layer Board) for 5G communication equipment. 5G, which is about to be commercialized, has a transmission speed of 20 times more than that of 4G and transmits data at amount of 100 times the rate of 4G. It is expected that various services such as the Internet of things (IoT) and Artificial Intelligence (AI) will be possible. MLB, which upgraded and multi-layered the existing printed circuit board (PCB), has become an essential part of 5G.
Dae Duck Electronics, a leading PCB company, expects its sales of MLB for communications equipment to increase. This is because the demand for MLB from domestic and overseas telecom equipment makers is expected to rise as facility investment by data centers and telcos increases.
Another good piece of news for the company came from the increased market share of Samsung Electronics, its major customer, in the 5G telecom equipment market. At the Mobile World Congress (MWC) of 2019 held in February, an official of Samsung Electronics said, “The initial market share of 5G equipment seems to have exceeded 20%.” Before, Samsung Electronics’ market share of existing 4G equipment was around 10%.
“Dae Duck Electronics is the number one player in the domestic MLB market,” said Park Kang-Ho, a researcher at Daeshin Securities. “The increase in the sales and market share of Samsung Electronics would lead to the sales growth of Dae Duck Electronics MLB.” Samsung Electronics supplies 5G equipment to several domestic and overseas communication companies. Last year, it was selected as a supplier of 4G and 5G communication equipment for companies like Verizon, AT&T, and Sprint in the US.
In the industry, it is expected that 5G service will be partially launched in Korea and the US in the second quarter and to start in full next year. The launch of IoT and AI services can also be expected. Dae Duck Electronics’ MLB for communication equipment is expected to continue its high growth in 2019-2020 with the increase in investment in 5G and AI. Researcher Park Kang-Ho predicted that Dae Duck Electronics’ MLB sales of communication equipment would reach 123.3 billion won (11.1% of total sales) this year and 138 billion won (11.3% of total sales) next year from 99.7 billion won last year.
ISU PETASYS is a company whose main product is MLB. As of 2017, it is the second largest player in the global MLB market (17%). In the first place is US TTM (41%).
The major customers of ISU PETASYS are network equipment companies such as Nokia, Cisco, and Juniper. Choi Jun-Young, a researcher at Hanwha Investment & Securities, said, “ISU PETASYS is expected to increase its MLB orders due to the rising sales of new routers and wired equipment for major customers (Nokia) and the full-fledged demand for 5G base station equipment.” According to Lee Dong-Joo, a researcher at KTB Investment & Securities, said, “ISU PETASYS is expected to have 100% capacity utilization rate in the second half as their major clients’ new equipment release is expected.”
ISU PETASYS posted an operating margin of over 10% between 2012 and 2013 when the 4G investment was in full swing. This figure, which dropped to 4% in 2017, has rebounded to 10% last year when 5G investment increased. In this year and next year, the figures are expected to continue to rise. Kim Ji-San, a researcher at Kiwoom Securities, predicted that this year’s MLB sales of ISU PETASYS will reach 360.6 billion won (57.8% of total sales), up by 14.3% from 315.4 billion won (56.3% of total sales) last year. Also, its operating margin this year is predicted to exceed 12%.