The National Pension Service (NPS) is expanding its investment in TESNA which is expected to benefit from increased investment in the system semiconductor sector by its main customer, Samsung Electronics.
According to the NPS’s regulatory filing, the pension fund has increased TESNA’s stake to 10.14%, or 811,977 shares up from about 5%, or 347,393 shares in May, 2019. This is the first time that NPS has increased its stake in TESNA above 10%.
NPS has been increasing its investment in TESNA – a developer and provider of test programs for various system semiconductors – as it has been growing rapidly, making large-scale facility investments to expand its market.
It saw an operating loss in 2016, but has been showing steady growth since then. It recorded 47.2 billion won ($39.4 million) in sales in 2017, 65.3 billion won in 2018, and 96.8 billion won in 2019, and its operating income increased from 9.9 billion won to 24.2 billion won during the same period. Its operating margin rose from 20.9% to 25% and it recorded 32 billion won in sales and 7.9 billion won in operating income in the first quarter of this year, up 81% and 67% from a year earlier respectively.
The fact that Samsung Electronics, which is TESNA’s main customer, is stepping up investment in system semiconductors in addition to memory semiconductors, is also making TESNA’s growth outlook brighter. Last year, Samsung Electronics announced that it would invest 133 trillion won in system semiconductors by 2030 after setting a goal to achieve the top spot in the global market.
TESNA relies heavily on Samsung Electronics. Its Pyeongtaek-based head office is mainly conducting research on products oriented towards Samsung Electronics. Meanwhile, its Anseong office is currently developing products that are related to SK Hynix and other fabless businesses.
TESNA is the only system semiconductor company that NPS has increased its stake in. “It is noteworthy that NPS is increasing its investments in TESNA while it is not doing so in other system semiconductor companies,” an investment industry source said.
“Many market observers think that TESNA will benefit if Samsung Electronics is able to narrow the gap with Sony, the industry’s No. 1 player in the CMOS (Complementary metal oxide semiconductor) image sensor (CIS) sector.” (Reporting by Seulgi Kim)