SKC Narrows Losses but Eyes Turn to Glass Substrate Breakthrough Amid Long Slump

[Korea Financial Times, Gwak Horyung] SKC has continued losses for 12 consecutive quarters. Despite persistent poor performance, expectations are growing for business normalization and full-scale new business launch next year.

On the 5th, SKC provisionally announced that it recorded sales of KRW 506.0 billion, operating loss of KRW 52.8 billion, and net loss of KRW 99.0 billion in Q3 this year. Sales increased 8.3% and operating loss scale decreased 11.4% compared to Q2. However, net loss increased by KRW 95.0 billion.

The reason for losses is the poor performance of copper foil subsidiary SK nexilis, which handles secondary battery materials business. Secondary battery materials recorded an operating loss of KRW 35.0 billion (operating profit margin -21%) this quarter as well.

The company expects the secondary battery materials business to normalize around the second half of next year. With growing North American ESS (Energy Storage System) demand, SK nexilis' Malaysia Plant 2 will begin operations in December this year. The company explains that profitability improvement will also accelerate when the plant reaches "full operation." Yoo Ji-han, SKC's CFO, stated, "The current Malaysia Plant 1 operation rate is around 40%," adding, "Expectations for cost structure improvement have risen significantly as we achieved break-even point (BEP) in September."

Beyond its secondary battery materials business, the area drawing even greater investor attention is the semiconductor material “glass substrate” business. Glass substrate is considered an innovative technology that will change the existing silicon-based semiconductor packaging landscape. SKC has declared through its U.S. subsidiary Absolics that it will commercialize glass substrate in 2026 as the world's first.

Driven by such expectations, SKC's stock price is trading in the KRW 120,000 range despite today's decline. This is a 19% surge in just two weeks from KRW 105,200 on the 23rd of last month.

CFO Yoo stated, "We produced the first mass production samples this quarter at the glass substrate mass production line in Georgia, U.S., and started the customer certification process," adding, "The submitted samples are showing very positive simulation evaluation results." He added, "We are also reviewing various investment support measures at the headquarters level to accelerate the business."

Gwak Horyung (horr@fntimes.com)