1. What Happened? : Analyzing DNF’s Declining Performance
DNF recorded sales of KRW 35.664 billion (a 10.1% decrease year-on-year) and an operating loss of KRW 17.15 billion (shift to a deficit) in the first half of 2025. This is a result of a combination of factors, including the semiconductor market downturn, customer production adjustments, increased SG&A expenses, and inventory valuation losses. Q2 results continued this negative trend, adding to investor concerns.
2. Why Did This Happen? : Underlying Causes of the Performance Decline
DNF’s declining performance is not solely attributed to internal factors but is also significantly influenced by external factors such as the global semiconductor market slowdown. Decreased investment and inventory adjustments by major customers have also played a significant role in the company’s worsened performance. Moreover, volatility in raw material prices and exchange rate fluctuations have added to the burden on profitability.
3. What’s Next? : DNF’s Future and Investment Strategies
Despite short-term challenges, DNF still holds growth potential. Positive factors include the long-term growth outlook for the semiconductor market, the change in majority shareholder to Solbrain, and the development of new materials for the growing AI and high-performance computing market. Investors should keep an eye on the semiconductor market recovery, customer investment expansion, and new technology development and commercialization.
4. Investor Action Plan: What to Watch For
- Short-term perspective: Whether performance improves, cost management strategies, synergy effects with Solbrain
- Mid- to long-term perspective: Timing of the semiconductor market recovery, success of new material development and commercialization, changes in the competitive landscape
While the short-term performance decline is a cause for concern, investors should develop prudent investment strategies considering the long-term growth potential.