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DEEP RESEARCH · TES

TES: Navigating the Memory Cycle with Technical Depth and Strategic Agility

A research report focused on PECVD/GPE tools, the DRAM pivot, BSD, and hybrid bonder catalysts.

Published: 2025-09-05 · Front-end semiconductor equipment/memory cycle analysis · Naver Blog

You are responsible for your own investment decisions. This is research, not a recommendation to buy or sell.

0. Bottom line first

TES is a front-end equipment company specialized in PECVD and GPE dry cleaning. It posted KRW 147B of revenue and a KRW 6B operating loss in the 2023 downturn, but the core thesis is that it reduced NAND dependence and responded to DRAM conversion investment, making it a potential high-beta momentum play in the recovery.

TES investment thesisSensitivity to memory CAPEX recovery
PECVDACL hard mask, 3D NAND
GPEDry cleaning/specific etch
DRAM pivotM16 conversion, P4/M15X upside
New catalystsBSD, hybrid bonder co-development
Once revenue clears fixed costs, operating leverage can work strongly.

1. Business position and products

Official fact: TES was founded in 2002 and manufactures wafer fab equipment, with PECVD tools and GPE dry-cleaning equipment as core businesses.

Official fact: Historically, NAND flash accounted for 60-70% of revenue because ACL PECVD systems are key products for high-aspect-ratio etching in 3D NAND.

Product/technologyUseMeaning
PECVDAmorphous carbon layer hard-mask depositionNeeded for high-aspect-ratio 3D NAND etching
GPEGas Phase Etcher dry cleaningDifferentiation in selected cleaning/etch steps
BSDNew backside deposition toolPotential high-value tool entering mass-production visibility
Hybrid bonderJoint development with Hanmi SemiconductorLong-term catalyst in next-generation packaging

2. Memory cycle and the DRAM pivot

Official fact: The source cites forecasts that global DRAM investment will rise 54% year over year in 2025, while NAND investment will rise 14%.

Interpretation: TES was hit by the NAND downturn in 2022-2023, but targeted conversion investment that upgrades existing lines from older DRAM to newer generations such as DDR5. This DRAM pivot was not just defensive; it positioned the company for the next cycle.

2023

Downturn

Revenue of KRW 147B and operating loss of KRW 6B, mainly due to NAND investment cuts.

Shift

DRAM investment response

Early revenue was secured from projects such as SK hynix M16 conversion investment.

Next

P4, M15X, V10 NAND

Samsung Pyeongtaek P4, SK hynix Cheongju M15X, and 2026 V10 NAND recovery are key watchpoints.

3. Operating leverage

Official fact: The source states that TES operating margin is expected to move from -4% in 2023 to above 20% in 2025.

Interpretation: For an equipment company with high fixed costs such as R&D staff and facilities, once revenue clears breakeven, much of the incremental revenue can flow to profit. That is why TES can be interpreted as a beta play whose earnings growth can exceed revenue growth in an upcycle.

4. Customer CAPEX impact model

The source builds an industry-structure estimate for the question: if a customer spends 100 units of CAPEX, how much revenue could TES recognize? It is a model, not a precise calculation.

ItemSamsung P4 DRAMSK hynix M15X DRAMNote
Total new investment per 10K wpm~$1.5B~$1.5BIndustry average estimate
WFE share75%75%Equipment share of total investment
Deposition equipment share15-20%15-20%Deposition within total WFE
TES share assumption5-10%5-10%Assumption for specific process steps
Overall estimateIf major domestic customers spend about $10B on new memory-fab WFE, TES may recognize roughly $50-150M of revenue depending on process mix and share.

5. Risks and conclusion

  • CAPEX execution by Samsung Electronics and SK hynix directly affects earnings.
  • NAND dependence has decreased, but sensitivity to the overall memory cycle remains high.
  • BSD and the hybrid bonder are long-term catalysts, but mass-production adoption and revenue timing must be verified.
  • In conclusion, TES can offer strong elasticity in a recovery cycle, but it is also an equipment stock with meaningful downturn risk.

Sources

Naver original