Neotis to Expand Production Capacity Amid Surging AI Semiconductor Demand... Mass Production Targeted for Second Half of 2027

KOSDAQ-listed Neotis will begin construction of a new factory to meet rapidly increasing customer demand. The decision comes as the growth of the AI semiconductor market has led to a sharp rise in demand for ultra-precision drill bits for PCBs, making expanded production capacity inevitable.

On May 12, Neotis announced that it has secured a strategic investment of approximately 18 billion won from Weiss Asset Management, a global hedge fund based in Boston, USA. The investment was made through convertible preferred shares (CPS), not convertible bonds (CB), thereby minimizing dilution of existing shareholder value. The investment amount is equivalent to about 4.7% of Neotis's total number of issued shares.

On the same day, the company also disclosed a plan to cancel its treasury shares. The target for cancellation is 140,000 common shares, with an expected cancellation amount of around 3.9 billion won. Through this strategic investment and treasury share cancellation, Neotis aims to secure resources to expand its production capacity while also enhancing shareholder value.

Neotis decided to construct a new factory after requests for increased supply from major customers such as Daeduck Electronics, Simmtech, ISU Petasys, Samsung Electro-Mechanics, and LG Innotek rose by more than 42% compared to the previous year. The company determined that partial expansions alone would not be enough to meet the growing demand. The new factory is scheduled to begin operations in the second half of 2027, and facility installation and customer certification processes are being carried out in parallel.

Founded in 2000, Neotis is the only domestic company specializing in the manufacture of microbits and has led the localization of ultra-precision drill bits for PCBs in Korea.

The recent expansion of the AI semiconductor market is considered a key growth driver for Neotis. As the markets for AI accelerators, network equipment, and high-layer-count PCB substrates for semiconductor packaging rapidly grow, demand for mechanical drill hole processing is also on the rise. High-layer-count PCBs, ranging from 20 to 50 layers, have limitations in circuit connection when processed only with laser hole drilling, making precision drill hole processes essential.

Neotis's 'Longflute' drill bit is a core component used in these processes. In particular, the 'K1' model, which features the DLC nano-coating technology that the company developed for the first time in Korea in 2013, has been recognized for its high durability and precision in ultra-small diameter processing, with diameters ranging from 0.05mm to 0.15mm. Its advanced design and coating technologies also serve as differentiation factors.

The global microbit market has been dominated by Japan's UNION Tool, China's JINZHOU, and Taiwan's TOPPOINT. However, Neotis maintains the top market share in Korea (about 38%) through its proprietary nano-coating and long-established ultra-precision processing technologies. The company notes that, despite aggressive low-cost competition from Chinese firms, Neotis has managed to increase its market share as other domestic competitors have withdrawn. Currently, Neotis is the only company in Korea capable of independently developing and mass-producing microbits.

Beyond its microbit business, Neotis is also strengthening its competitiveness in the automotive parts sector. The company collaborates with global automotive parts manufacturers such as Nidec, Bosch, Mitsuba, and Brose, maintaining the top market share in the global sunroof motor shaft segment. Neotis is also nurturing its smart actuator business as a next-generation growth engine, in line with the expansion of the electric vehicle market and the transition to software-defined vehicles (SDVs).

In the long term, Neotis plans to integrate its precision shaft processing and motor control technologies to advance into the actuator market for robots and the humanoid robot sector.

Neotis CEO Kwon Sanghoon stated, "With recognition for our technological capabilities and growth potential from global institutional investors, we will accelerate both the expansion of microbit supply and the preparation for new future businesses starting with the operation of our new factory in the second half of 2027."

This content was produced with the assistance of AI translation services.