OPPSTAR is collaborating with Samsung to produce integrated circuits (ICs) including using Samsung’s 14nm FinFET technology.
Kenanga Invest Bank (Kenanga) said this is significant as it comes with access to the foundry’s process development kit (PDK), transforming OPPSTAR into an enabler (i.e. converting concepts into tangible products) for fabless tech players.
While Kenanga maintains their forecasts, TP of RM1.72 and OUTPERFORM call, they take note that investors are willing to pay premium valuations for IC designers with collaboration with semiconductor foundries.
The access to wafer foundries transforms IC design houses like OPPSTAR into enablers (i.e. converting concepts into tangible products) for fabless tech players such as Nvidia, Qualcomm, Broadcom, AMD, and MediaTek.
The demand for customised IC design is strong on the back of the proliferation of IoT devices, autonomous vehicles, and artificial intelligence (AI) applications.
Meanwhile, statistics from Market.us reveal that the 14nm node (part of the “14nm/16nm” family) holds the largest share of global process nodes at c.28%. This dominance stems from the well-established nature of the 14nm process node, boasting high yield rates at a comparatively affordable price compared to leading-edge nodes.
Moreover, the 14nm node remains highly capable for modern-day applications, as evidenced by products such as the Exynos 8 Octa, Nvidia GTX1080, and Tesla UBQ01B0 full self-driving processor, offering an ideal balance between performance and affordability.
Kenanga is highly positive on OPPSTAR’s and anticipates an upswing in OPPSTAR’s earnings (after a soft patch recently) on the back of the doubling of its order book to RM24.7m (as of Feb 2024) on recurring turnkey design jobs from its existing customer, Xiamen KirinCore, as well as the addition of orders from the recently acquired design company in Japan.
