Samsung, ARM chip design partner Gaonchips eyes IPO in 2022

Rising demand for non-memory chips to provide a positive outlook for its IPO prospects

Jong-woo Kim 1

2021-09-29 18:18:27 jongwoo@hankyung.com

Semiconductors

South Korea’s leading semiconductor design house Gaonchips Co. has officially kicked off preparations to go public in the first half of 2022.

According to the banking industry on Sept. 29, Gaonchips has selected Daishin Securities as the IPO underwriter. The semiconductor firm will file for a preliminary review of its IPO registration to the Korea Exchange within 2021.

Gaonchips, established in 2012, is a chip design house headed by an ex-Samsung employee Jung Kyu-dong. The company specializes in designing chips for autonomous driving and artificial intelligence sectors.

A semiconductor chip design house acts as a bridge between foundry firms like Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Company (TSMC) and fabless companies like Qualcomm Inc. After fabless companies design integrated circuits, the chip design houses like Gaonchips upgrades the design into marketable products to be manufactured by the foundry firms.

Gaonchips is an official design partner of Samsung’s foundry division and the British semiconductor company ARM Ltd. Gaonchips was selected as Samsung’s best design partner in 2019 and ARM’s best design partner in June this year.

Gaonchips in June was selected as the \ — Gaonchips in June was selected as the "ARM Design Partner of the year 2020."

The company specializes in providing tailored solutions to Samsung in making chips ranging from 5 to 28 nanometers. Gaonchips’ fabless partners in South Korea include Telechips Inc., Anapass Inc. and Nextchip Co. Gaonchips raised 5 billion won ($4.2 million) last year from WE Ventures, Stonebridge Ventures and DA Value Investment.

Gaonchips generated an operating profit of 2 billion won ($1.7 million) on revenue of 23.5 billion won ($19.8 million). Analysts forecast the company’s 2021 revenue to reach 40 billion won ($33.8 million). The company’s long-term annual revenue target by 2025 is 100 billion won ($84.5 million).

“Most of the employees in the company’s R&D department are highly skilled engineers. The company has a high potential with the non-memory semiconductor market growing rapidly,” said an investment banking industry official.

Write to Jong-woo Kim at jongwoo@hankyung.com
Daniel Cho edited this article.