Hyundai Motor Securities, in an electronics-industry report published on 28th July, forecast that South Korean suppliers of back-end semiconductor materials would see accelerating benefits once CXMT — China's largest DRAM manufacturer — completes its initial public offering and deploys the proceeds.
The brokerage singled out MK Electron and Duksan Hi-Metal as the primary beneficiaries, noting that both companies hold what amounts to a dominant position in the Chinese market for solder balls and bonding wire, two essential materials used in chip packaging.
The revenue figures are striking. In the first quarter of 2026, MK Electron's China-derived sales surged 155% year on year, while Duksan Hi-Metal's rose 120% over the same period. MK Electron's Chinese subsidiary now accounts for 46% of the group's consolidated operating profit (excluding Korea Land Trust, an unrelated financial subsidiary). Duksan Hi-Metal generates roughly 15% of its stand-alone revenue from China, and a planned 30% increase in production capacity is understood to be directed primarily at meeting rising Chinese demand.
The competitive landscape in China also favours the Korean suppliers, the report argued. Although Japanese firms are the main global rivals in both solder balls and bonding wire, Korean companies command a significantly larger share of the Chinese market, where local preferences run strongly in their favour. Local Chinese manufacturers, meanwhile, still lag on technical capability. Duksan Hi-Metal is estimated to hold around 80% of the solder-ball market at CXMT alone and is reckoned to lead the global market for micro solder balls — the finer-pitched variety used in advanced packaging.
CXMT intends to deploy its IPO proceeds towards optimising yields on server-grade DDR5 and LPDDR5x memory and developing next-generation DDR6 chips. The knock-on effect for Korean materials suppliers is structural: their direct customers are Chinese outsourced semiconductor assembly and test (OSAT) firms — including JCET, Tongfu Microelectronics, and Huatian Technology — all of which are expanding rapidly under Beijing's semiconductor self-sufficiency drive and are now ranked among the world's largest OSAT providers. Any expansion of CXMT's output therefore flows directly into demand for Korean-made packaging materials.
Investors should nonetheless weigh several risks. An escalation in Sino-American semiconductor tensions could bring additional sanctions against CXMT, potentially restricting Korean suppliers' participation in its supply chain. Washington has progressively tightened export controls on advanced memory — including high-bandwidth memory (HBM) — and it cannot be ruled out that materials and components suppliers serving Chinese chipmakers might eventually fall within the regulatory perimeter.
The longer-term competitive threat from Chinese domestic rivals also warrants attention. Korean suppliers currently benefit from a meaningful technology gap, but Beijing's sustained push for semiconductor self-reliance keeps the pressure on to nurture local alternatives, and Chinese firms are closing the gap faster than many expected.
Hyundai Motor Securities maintains an Overweight stance on the electronics sector. Its report concluded that recent share-price weakness has made valuations of Korean back-end materials companies more attractive, even as their underlying fundamentals continue to improve. The brokerage expects a "dual tailwind" dynamic — combining global AI-hardware demand with China-driven momentum — to become increasingly pronounced in the second half of the year.