Hanwha Semitech, a subsidiary of Hanwha Vision (489790.KS), has received 100 billion won in support through two rights offerings over two years but has yet to secure stable profitability. The company changed its name to accelerate its shift into semiconductor equipment, yet about 80% of total revenue still comes from non-chip businesses such as surface-mount technology (SMT) equipment and machine tools. If new chip equipment lines, including hybrid bonders and front-end deposition tools, fail to produce revenue soon, additional funding from the parent company is expected to become unavoidable.
Hanwha Semitech posted revenue of 246.3 billion won and operating profit of 2.5 billion won in the first half of this year, according to the Financial Supervisory Service on the 13th. Operating profit came in below interest expenses of 4.2 billion won for the same period. The first-half operating margin of 1.02% marked a return to the black from minus 8.42% a year earlier but remains extremely thin.
Quarterly profitability has been even more erratic. The operating margin was minus 13.26% in the first quarter before rebounding sharply to 9.51% in the second. The swings reflect a business structure in which earnings fluctuate with order timing and equipment delivery schedules. The volatility is expected to continue into the third quarter, with Kiwoom Securities projecting an operating margin of 1.35%, down about 8 percentage points from the previous quarter.
Hanwha Semitech's roots lie in SMT equipment used to assemble electronic components. The business traces back to the chip mounter operations started in 1989 by predecessor Samsung Techwin. A chip mounter is a type of SMT equipment that places small electronic components onto printed circuit boards used in smartphones and home appliances. SMT equipment remains the main business, generating 158.8 billion won in the first half, or 69% of total revenue. Including the machine tool business acquired in 2019, non-semiconductor operations account for 82% of sales.
Industry officials say that portfolio has contributed little to the company's effort to transform itself into a chip equipment maker after renaming itself from Hanwha Precision Machinery to Hanwha Semitech last year. Hanwha Semitech began developing TC bonders, back-end semiconductor equipment, in 2020 and passed quality verification by SK hynix (000660.KS) in the first quarter of last year, signing an initial supply contract worth 21 billion won.
Results remain modest, however, with semiconductor equipment revenue reaching just 42.1 billion won in the first half. That was up 42% from 29.7 billion won a year earlier but accounted for only 18% of company revenue.
The chip equipment business is small relative to the company's name because of limited supply volumes. Hanwha Semitech won an order for six TC bonders early this year and is understood to have delivered all of them by the first half. That marks a wide gap with overseas rival ASMPT, which has the capacity to ship more than 25 comparable units in a single quarter.
The company has drawn funding from its parent for two consecutive years to build up that delivery capacity. Semiconductor equipment requires substantial upfront cash for parts procurement, assembly, performance verification and shipment even after customer orders are secured. Hanwha Semitech raised 50 billion won each in March last year and April this year through rights offerings, securing 100 billion won in total.
Even with that cash in hand, commercializing next-generation chip equipment beyond TC bonders remains a challenge. For hybrid bonders used in HBM packaging, the company delivered a first-generation tool four years ago and unveiled a second-generation version early this year, but customer quality verification is still pending and no formal orders have followed.
Commercializing front-end deposition equipment is also key. Hanwha Semitech acquired the deposition equipment business from Hanwha Momentum in late 2023 and has been developing DRAM deposition tools with a customer, but has yet to show clear results.
"If the company cannot turn next-generation equipment development into revenue and profit after spending the proceeds from the rights offerings, additional fundraising will be unavoidable," an industry official said. "I understand various options are under review, including another rights offering and a sale of the machine tool business."
