Global top inspection player seeking share buybacks, M&As, CEO says


Chips connected with tiny electronic components and circuits are made through long manufacturing lines.

They must be assembled and produced with maximum precision and perfection. Otherwise consumers are left with malfunctioning mobile devices and computers.

In between those lines, there is inspection equipment such as solder paste and automatic optical inspection that makes sure such electronic components are put together and made with absolutely zero flaws.

This is where Koh Young Technology, the world’s biggest 3-D SPI equipment developer, comes in to inspect and assist its 700 global clients including Cisco and Hitachi produce the best, reliable products.

As it has been leading with a global market share of more than 50 percent in SPI, the KOSDAQ-listed Koh Young is now headed for the uncharted territory of 3-D AOI in non-memory chips, which are higher value-added than DRAM memory. And AOI is lot more sophisticated than SPI in terms of technology.

“After four years of research and development, our new growth engine -― 3-D AOI -― will bear fruit as we will pioneer into the non-memory chip space in the second half of this year,” Koh Kwang-ill, CEO of Koh Young, recently told The Korea Herald.

This is the first time for any company to develop AOI equipment and systems in 3-D since manufacturing lines currently only have 2-D AOI, he noted.

Koh said he expects the industry to fully replace 2-D AOI with 3-D in three to five years.

As it prepares to make the leap into AOI, the company will also pursue acquisitions, while seeking further share buybacks as it is cash-rich and sees that its current share price is not fairly valued.

“We will seek M&As of potential targets that can boost the capability of our existing portfolio as a means to maintain the company’s top position globally,” Koh said.

It has net cash of 45 billion won ($40 million), he noted, adding that venture firms with innovative sensing technologies would be an ideal target.

Also, the company has recently bought back shares worth 2 billion won. Its shares ended up 350 won, or 1.26 percent, at 28,100 won Friday, with a market cap of some 243 billion won.

Koh, the founder of the company, is no stranger to making headways in new technology markets.

Established as a venture start-up in 2002 in the aftermath of the tech bubble, it took four years for Koh Young to come up with something new, which is SPI in 3-D, the first of its kind, and become the No. 1 player in the space.

With such achievement backed by former financial investors such as Korea Development Bank and Hyundai Venture Investment, it launched an initial public offering on the KOSDAQ in 2008. Koh Young today is labeled as “the Hidden Champion” among KOSDAQ-listed tech companies.

The company is aiming to achieve sales of around 100 to 120 billion won in 2012, up from 86 billion won a year ago, Koh said.

By Park Hyong-ki (hkp@heraldcorp.com)