SOLUM, which produces power modules and electronic shelf labels (ESL), announced its transition from an electronic component manufacturer to a vehicle and data-based solutions company. SOLUM also plans to attract an investment of 140 billion won in the first half of the year. On the 21st, SOLUM held a vision declaration ceremony at a hotel in Yeouido, Seoul, where it made this announcement. Founded in 2015, SOLUM was established after spinning off Samsung Electro-Mechanics' power module and ESL divisions and went public in 2021.
Jeon Seong-ho, CEO of SOLUM, specifically explained the changes occurring in three main business areas: power modules, ESL, and displays.
He stated that, regarding power modules, the company previously mainly supplied components for electronic products such as TVs and mobile devices, but plans to focus on producing power modules required for electric vehicles and artificial intelligence (AI) data centers in the future. SOLUM has already supplied power modules to major domestic electric vehicle charger manufacturers and is also engaged in national projects with Hyundai Mobis. Jeon noted, "You can think of it as SOLUM doing everything in an electric vehicle except for the battery."
The situation where global big techs like Apple, Google, Meta, and NVIDIA are directly building AI data centers is expected to be an opportunity for SOLUM. Until now, SOLUM has supplied power to server systems such as Dell, Intel, and Supermicro. However, with big techs constructing data centers, SOLUM will now be able to supply power modules directly to them. Jeon described this as "moving from a second-tier vendor to a first-tier vendor."
SOLUM is currently pushing to establish a second factory in Chennai, India, in response to growing demand in the automotive sector. Yoodong-kyun, head of the ANP division, noted, "It is expected that if the company produces high-value-added power modules, the operating profit margin will increase by about 2 to 3 times."
Regarding ESL, which can commonly be seen in large supermarkets, SOLUM is collaborating with major global retail companies. The company provides solutions desired by retailers, not limited to merely displaying prices, but also including store optimization, inventory management, and dynamic pricing. Jeon Se-wook, head of the ESL solution division, stated, "SOLUM has not only ESL but also divisions related to sensors and IoT, enabling us to consolidate internal solutions into a platform."
In the display sector, SOLUM is focusing on developing order tablets used in restaurants and vehicle displays. Regarding vehicle displays, cooperation is expected with the U.S. augmented reality solution company Epiton, in which SOLUM invested equity in 2023. Jeon stated, "We expect to start producing small augmented reality-based 3D head-up displays as early as 2027, and we are negotiating specific supply timings with U.S. and European automakers."
Meanwhile, the company plans to secure an investment of 140 billion won in the first half of the year. This move is aimed at expanding overseas production bases in Mexico and India and discovering new growth momentum. It is reported that domestic institutional investors, such as MERITZ Securities, Mirae Asset Securities, and Samsung Asset Management, are showing significant interest.
SOLUM also decided on the disposal of 21.1 billion won worth of treasury shares (2.43%) to the CEO on this day. The CEO agreed to buy back stock at a price approximately 5% above the share price on the 19th (17,010 won). Accordingly, the CEO's equity will increase from the existing 14.6% to 17.0%.
Meanwhile, the market is paying close attention to the fact that the CEO's eldest son and second son are emerging into management roles. In response, the CEO stated, "I am not preparing anything regarding succession, including equity inheritance," adding, "The principle is to assign responsibility to capable individuals proven in a sort of professional management system."
The company also added that it will burn its treasury shares every year and provide a 5% dividend this year, gradually increasing the dividend rate to 20% in the future.