Semiconductor design specialist FADU achieved revenue of 19.2 billion won in the first quarter of this year, maintaining a stable growth trend since the second half of last year.
FADU noted on the 12th that its revenue for the first quarter reached 19.2 billion won, a 734% increase from 2.3 billion won during the same period last year. This is attributed to the expansion of high-performance enterprise solid-state drives (SSDs) by U.S. artificial intelligence (AI) data center companies since the second half of last year, leading to full-scale supply of controllers to North American clients.
Particularly, there were concerns about investment reductions from major U.S. data center companies due to tariff issues starting early this year, but these companies recently announced plans to either maintain or expand their investments through performance reports, indicating that demand for high-performance, high-capacity storage is expected to remain robust.
Recently, FADU has been expanding its customer base and revenue by implementing a new customized business strategy based on the 'Flex SSD' solution in the Asian market, including China, Taiwan, and India, following the U.S. data center market.
However, it recorded a deficit of 11.9 billion won in the first quarter, struggling in terms of profitability. Yet, the size of the loss decreased by 54% compared to the previous quarter, showing signs of improvement. FADU proactively reflected significant losses from obsolete inventory evaluations in the previous fourth quarter to reduce financial burdens, and the restructuring of its product portfolio around the profitable controller business has created a synergistic effect.
Due to the nature of fabless corporations, the burden of labor costs, which accounts for about half of selling expenses, has decreased. The number of R&D personnel invested in new product development projects has been steadily increasing over the past two years, but it has remained at about 280 since the third quarter of last year, indicating that as sales increase, the burden of labor costs relative to revenue is expected to decrease, leading to improved profitability.
A representative from FADU stated, 'In general, in the case of fabless companies, the burden of labor costs increases as the number of engineers rises during the preceding development period, but once sales become substantial, the rate of personnel increase does not spike, resulting in rapid improvements in profitability.' They added, 'Considering that the results of the efforts to develop new clients and new product development projects over the past two years are expected to begin showing substantial revenue this year, we anticipate continuing on a growth trajectory.'