1. LB Semicon’s H1 2025 Results: Key Events
Following the merger with LB Lusem in February 2025, LB Semicon entered the secondary battery materials market. However, the company reported an operating loss of ₩7.3 billion for the first half of 2025. Q2 2025 results were also below expectations, with revenue at ₩115.6 billion (-5% vs. guidance) and operating loss at ₩3.3 billion (-227% vs. guidance).
2. Reasons for Underperformance: What Went Wrong?
LB Semicon’s underperformance stems from a combination of factors, including a sluggish semiconductor market, low utilization rates in the secondary battery recycling segment, and increased merger-related expenses. High customer concentration (A: 32.13%, B: 42.70%) adds to earnings volatility.
3. LB Semicon’s Future: Opportunities and Threats
- Opportunities: Business diversification through the LB Lusem merger, growing demand for advanced packaging driven by AI and HBM markets.
- Threats: Intense competition from global OSAT companies, high debt ratio, customer concentration, macroeconomic uncertainty.
4. Investor Action Plan: What Should You Do?
- Short-term: Closely monitor earnings recovery and progress in stabilizing financial structure.
- Long-term: Focus on the growth potential of the secondary battery business and the company’s competitiveness in advanced packaging technology. Pay attention to new customer acquisition and overseas expansion strategies.
Frequently Asked Questions
How has the LB Lusem merger impacted LB Semicon?
The LB Lusem merger diversified LB Semicon’s business by adding secondary battery materials. While positive for long-term growth and revenue stability, the merger led to increased expenses and weak performance in the secondary battery segment, negatively impacting short-term profitability.
Who are LB Semicon’s main customers?
LB Semicon’s main customers are Company A (32.13%) and Company B (42.70%). This high customer concentration makes LB Semicon’s performance vulnerable to fluctuations in demand from these specific customers.
What is LB Semicon’s investment strategy?
LB Semicon’s investment strategy focuses on improving profitability in its semiconductor post-processing business, growing its secondary battery business, acquiring new customers, strengthening its financial position, and maintaining leadership in advanced packaging technology.
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