ISU Petasys – A Pioneer in High-Density Interconnect (HDI) PCB Solutions

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This report provides an in-depth analysis of ISU Petasys, a South Korean printed circuit board (PCB) manufacturer, to assist with your investment decision-making. The analysis covers the company’s overview, products and services, growth strategy, industry trends, competitor analysis, financial performance, CEO leadership, and recent news.

Company Overview

ISU Petasys, a subsidiary of the ISU Group, was founded in 1972 and specializes in the production of high-density interconnect (HDI) PCBs. These PCBs are essential components in various electronic devices, including network equipment, servers, and supercomputers. The company was listed on KOSDAQ in August 1972. ISU Petasys has a global presence with manufacturing facilities in South Korea, the United States, and China. The company is committed to innovation and sustainability, as evidenced by its R&D investments and its status as a member of the Responsible Business Alliance (RBA). Furthermore, ISU Petasys demonstrates its commitment to employee welfare by operating a cyber reporting system that allows employees to submit grievances regarding labor conditions, human resource management, and other personal affairs.

ISU Petasys is dedicated to upholding its corporate social responsibility (CSR) by creating economic, social, and environmental value. The company strives to minimize the negative impacts of its business activities and create positive value for the environment and society.

Throughout its history, ISU Petasys has achieved several milestones, including the founding of ISU EXAFLEX in 2011 and receiving the “Supplier of the year” award from CISCO in 2008. The company maintains a global network and presence in different regions, enabling it to serve a diverse customer base.

In addition to its strong technological capabilities, ISU Petasys has secured orders from major tech giants like Intel, Microsoft, and Nvidia, demonstrating its strong position in the server PCB market.

Main Products & Services

ISU Petasys specializes in manufacturing ultra-multilayer PCBs, which are critical components in advanced electronics. Their key products and services include:

  1. Network Equipment PCBs
    • Used in routers, switches, and other networking devices.
    • This category includes PCBs for routers/switches and backplanes.
  2. Aerospace PCBs
    • Designed for use in aircraft and spacecraft applications.
  3. ADAS RF Radar PCBs
    • Employed in advanced driver-assistance systems (ADAS) for radar technology.
  4. Server/Storage PCBs
    • Used in servers and data storage systems.
  5. Supercomputer (HPC) PCBs
    • Designed for high-performance computing applications.
  6. Probe Cards
    • Used for testing semiconductor devices.
  7. Load Boards
    • Used to test integrated circuits.
  8. Burn-In Boards
    • Used to test the reliability of electronic components.

Growth Strategy

ISU Petasys aims to expand its presence in the high-value-added PCB market by focusing on technological advancements, expanding its business portfolio, and creating new opportunities in the market by expanding its manufacturing base. The company plans to:

  1. Secure Core Technological Competencies
    Invest in research and development to stay ahead of market trends and meet the evolving needs of its customers.
  2. Enhance Product Competitiveness
    Implement innovative manufacturing processes and invest in automation to improve production efficiency and quality.
  3. Expand Business Portfolio
    Focus on creating new opportunities in the high value-added market by expanding its business portfolio and manufacturing base.

Industry Trends

The PCB industry is experiencing significant growth, driven by the increasing demand for advanced electronics in various sectors, including automotive, consumer electronics, and telecommunications. Key industry trends include:

  1. Market Growth
    • The global PCB market is expected to reach USD 151.6 billion by 2037, growing at a CAGR of 5.4% from 2025 to 2037.
  2. Technological Advancements
    • The development of HDI and rigid-flex PCBs is driving innovation, enabling the production of smaller, more powerful, and more reliable electronic devices.
  3. Escalating Automotive Industry
    • The automotive PCB market is booming due to growing safety requirements, electric/hybrid vehicle adoption, and the global increase in road accidents.
  4. Rise in Connected Cars
    • Demand for secured cars and electric vehicles equipped with advanced features (in-car Wi-Fi, GPS navigation, vehicle-to-vehicle communication) is rising, fueling the need for advanced PCB designs.
  5. Improvement in Vehicle’s Overall Performance
    • Automotive consumers and manufacturers prioritize vehicle security, accelerating the demand for high-performance automotive PCBs.
  6. Increased Demand for PCBs in Automotive
    • The rise of electric vehicles (EVs) and ADAS is driving the need for sophisticated PCB designs in the automotive sector.
  7. HDI/Build-up/Microvia Segment Dominance
    • This segment holds about 33.4% market share in 2024 due to the demand for compact electronic devices with high performance.
  8. Rigid Segment Dominance
    • Expected to hold over 80% of the PCB market share in 2024, widely used in automotive, industrial equipment, and telecommunications.
  9. China’s PCB Trade Surplus
    • In May 2024, China’s PCB exports reached USD 1,670 million, with imports at USD 574 million, resulting in a trade surplus of USD 1.1 billion.
  10. Standard Multilayer & Rigid-Flex PCBs
    • Standard multilayer PCBs hold around 35% of the market share (as of 2022), and rigid-flex PCBs are the fastest-growing segment.
  11. Consumer Electronics and Automotive Segment Dominance
    • Consumer electronics holds about 34% of the global PCB market share (as of 2022), while automotive is the fastest-growing segment.
  12. Regional Growth
    • The Asia Pacific region is set to dominate the PCB market, driven by strong manufacturing bases in China, Japan, and Taiwan.

Comparison with Competitors

ISU Petasys faces competition from several major PCB manufacturers globally. Some of its key competitors include:

  1. Zhen Ding Tech. Group
    • Leading PCB manufacturer with products like FPC, SLP, HDI PCB, and IC substrates.
    • Factories in Shenzhen, Huai’an, Qinhuangdao, Taoyuan, and Kaohsiung.
  2. Unimicron Technology Corporation
    • Specializes in PCBs, HDI PCBs, FPCs, and rigid-flex PCBs.
    • Factories located in Taoyuan, Shenzhen, and Suzhou.
  3. Viasion Technology Co., Ltd.
    • Offers rigid, flexible, rigid-flex, and HDI PCBs with a focus on high-mix low-volume manufacturing.
    • Factories in Shenzhen and Yiyang.
  4. Suzhou Dongshan Precision Manufacturing Co., Ltd.
    • Known for flexible PCB and rigid-flex PCB production, serving EV, telecommunications, and consumer electronics markets.
    • Factories in Yancheng and Zhuhai.
  5. Compeq Manufacturing Co., Ltd.
    • Manufactures multilayer PCBs, HDI, HLC, FPC, and rigid-flex PCBs.
    • Factories in Taoyuan, Huizhou, Suzhou, and Chongqing.
  6. Nippon Mektron, Ltd.
    • Specializes in FPCs for automotive, medical devices, and robotics.
    • Factories in Ibaraki, Kaohsiung, Zhuhai, and Suzhou.

Analysis of Financial Statements

Below are the financial statements for ISU Petasys for the past 3 years (2021-2023):

Item (in Million won)202320222021
Revenue675,333642,921469,621
Operating Income62,169116,61846,876
Profit Before Tax54,656107,83043,011
Net Profit47,723102,473-3,604
Earnings Per Share7551,620-81
Total Assets626,436546,014449,679
Total Liabilities359,658323,686324,187
Total Equity266,778222,328125,492
  • Revenue Growth: ISU Petasys has shown strong revenue growth over the past three years, indicating a healthy demand for its products.
  • Profit Fluctuations: Operating income and net profit have fluctuated, with a notable decline in 2023. Further investigation is needed to understand the factors contributing to this decline.
  • Financial Health: The company’s financial health appears stable, with a consistent increase in total assets and equity.
  • Cash Growth: The average annual cash growth rate for ISU Petasys has been 1,301% over the past three years.

Employee review

Production Engineer (7 Jan, 2025)

Pros

  • If you’re from Daegu, it’s pretty decent.
  • The salary in Daegu is quite good.
  • With a strong union, there’s almost no risk of being fired.

Cons

  • The upper management, who aren’t very competent, are busy looking out for their own interests.
  • Policies and projects are just empty formalities aimed at looking good, which ends up overburdening the workers. As a result, there’s a gap between the actual workload and the target workload—workers end up suffering from the “cheap crap” handed down from above.
  • They frequently add unnecessary tasks to work, claiming they help, but it’s all just for show.
  • Promotions and personnel decisions aren’t based on performance at all—it’s all about looking good.
  • If you’re good at schmoozing or entertaining, you’re more likely to get promoted.
IT Engineer (16 Dec, 2024)

Pros

  • You can gain a proper understanding of PCBs.
  • The salary is relatively high, even compared to other large companies.
  • The recently remodeled office is a plus.

Cons

  • There is meaningless overtime, and a culture where overtime is expected as a norm.
  • Even when measures are introduced to improve the company culture, the higher-ups dismiss them as unnecessary, rendering such efforts ineffective.
  • The company’s culture is lagging significantly behind its growth and development.
  • There are basically no substantial benefits.
R&D dept. (19 Oct, 2024)

Pros

  • Dormitory support, performance bonuses, company meals, etc.—all combined, they really fatten up your bank account.
  • The colleagues are pretty decent (perhaps because the work is so demanding?).
  • You can visibly see the company progressing and growing.

Cons

  • The relentless workload and overtime take a serious toll on your health.
  • The company culture is evolving rather slowly.
  • There are geographical challenges with Hyunpung and a shortage of parking spaces.

Recent News

  1. Joint Venture with Apex
    • In October 2024, ISU Petasys established a joint venture subsidiary with Apex International, a Taiwanese PCB manufacturer, to expand its production capacity and strengthen its presence in the server business in Southeast Asia.
    • This joint venture is expected to enhance the company’s competitiveness in the global market by providing access to Apex’s stable production capacity in Southeast Asia and allowing ISU Petasys to leverage its advanced technology in the server sector.
      (https://www.apex-intl.com.tw/en/news/info/252)
  2. Cancellation of JEIO Acquisition
    • ISU Petasys canceled its plan to acquire JEIO, a carbon nanotube maker, in January 2025, following criticism from shareholders and financial authorities.
    • The acquisition was questioned for its synergy potential and the large number of shares ISU Petasys planned to issue.
    • After canceling, the company plans to adjust its share sales plan from 550 billion won to 250 billion won.
      (https://www.thelec.net/news/articleView.html?idxno=5123)
  3. Financial Performance in 2024
    • Despite a challenging market environment due to reduced semiconductor production and a decline in sales prices, ISU Petasys achieved record production and revenue, leveraging its strong technical expertise and competitive quality.
      (https://www.petasys.com/eng/csr/report_2024_eng.pdf)

Synthesis and Conclusion

ISU Petasys operates in a growing PCB market with a strong focus on HDI technology. The company has demonstrated consistent revenue growth, a commitment to innovation and sustainability, and resilience in navigating a challenging market environment. However, recent fluctuations in profitability and the cancellation of the JEIO acquisition warrant further analysis.

Key Strengths

  • Strong Technological Capabilities in HDI PCBs
  • Established Relationships with global customers, including Intel, Microsoft, and Nvidia
  • Innovation and R&D Focus
  • Commitment to ESG principles
  • Experienced Leadership centered on growth and customer satisfaction

Potential Concerns

  • Profitability Fluctuations in recent years
  • Competition from major PCB manufacturers worldwide
  • Uncertainty around the company’s diversification strategy following the canceled JEIO acquisition

Based on the analysis, ISU Petasys presents a notable investment opportunity in the expanding PCB market. Its strong technological capabilities, established customer relationships, and dedication to innovation and ESG practices support its growth potential. However, it remains crucial to:

  1. Monitor Profitability Trends: Investigate factors behind recent fluctuations in profitability.
  2. Assess Competitive Landscape: Compare more granular data such as market share, R&D spending, and financial performance of key competitors.
  3. Evaluate Diversification Strategy: Observe any new strategic moves and their potential impact on shareholder value.
  4. Examine CEO Leadership: Seek more information about the CEO’s long-term vision and execution plan.

ISU Petasys’s commitment to innovation, proven track record, and global customer base make it a strong contender in the PCB sector. With the industry projected to grow significantly in the coming years, investors who perform thorough due diligence on both market conditions and internal company strategies may find ISU Petasys to be a promising addition to their portfolios.

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