1. Seoul Semiconductor Q1 2025 Earnings Analysis: Revenue Growth, But Widening Losses
Seoul Semiconductor reported consolidated revenue of KRW 167.8 billion in Q1 2025, a 13.6% increase year-over-year. However, the company’s operating loss widened to KRW 13.1 billion, primarily attributed to a slump in the LED manufacturing segment.
2. Reasons for Underperformance: Intensifying LED Market Competition and Profitability Decline
The underperformance is mainly due to intensifying competition in the LED market and rising raw material costs, leading to decreased profitability. While the Visible LED division is striving to expand market share, the growth in the UV LED segment alone is insufficient to improve overall performance. Investments in future technologies like Micro LED and VCSEL continue, but tangible results are yet to be seen.
3. Stock Forecast and Investment Strategy: Short-term Decline Likely, Long-term Growth Potential
In the short term, downward pressure on the stock price is expected due to the widening operating loss and continued decline in sales. However, in the long term, the commercialization of future technologies such as Micro LED and VCSEL will be key to a stock rebound. Investors should closely monitor the company’s profitability improvement strategies and new technology development progress.
4. Investor Action Plan: Cautious Approach and Continuous Monitoring Required
- Short-term investors: A cautious approach is necessary until signs of improved earnings and a stock rebound are confirmed.
- Long-term investors: Continuously monitor the progress of future technology development and changes in market competitiveness.