[Click eStock] "DIC, US-Centered Supply Chain Restructuring... Expected Expansion of Electrification Parts Sales"

by Jang Hyowon

Published 28 Apr.2023 08:29(KST)

Updated 24 Jul.2023 23:13(KST)

On the 28th, KB Securities analyzed that DIC is expected to expand sales of electrification parts due to the reshaping of supply chains centered on the United States.

DIC has transformed into a specialized company producing power transmission devices by expanding its product lineup to automotive parts and heavy equipment parts through years of accumulated technology. Recently, through the eco-friendly E-powertrain new business, it has transformed into an electric vehicle parts company aiming to secure new growth engines.

Hyunkyum Kim, a researcher at KB Securities, stated, “DIC was selected as a transmission supplier for Hyundai Transys supplying to the U.S. region last January, and orders for the U.S. market are now accelerating. They have confirmed an $8 million equipment investment in their U.S. subsidiary, Daeil USA, and after trial operations, full-scale sales are expected in the second half of this year.”

He added, “In addition to additional orders from U.S. automakers such as GM and Tesla, who are currently supplied with reducers, sales diversification is expected through new North American suppliers like Stellantis and Ford. With the detailed guidelines of the IRA (Inflation Reduction Act) electric vehicle tax credit, the global automakers’ moves are accelerating, and the company is focusing on advancing the factory operation schedule as much as possible.”

If DIC fully receives orders for electric vehicle reducers locally in the U.S. through its subsidiary Daeil USA in the second half of this year, sales expansion is expected to increase sharply. Additionally, further orders related to electrification parts and expansion of new suppliers with global automakers can also be anticipated.

Researcher Kim said, “Since competition in the U.S. is not intense, a significant increase in operating profit is expected. Having succeeded in domestic production of EV reducers and electronic transmission systems (SBW), they are conducting discussions with global automakers regarding electrification parts, raising expectations for new orders.”