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News Article

Seoul operating margin up 223 percent

Q1 earnings buoyed by strength across lighting, automotive, and all IT segments

Korean LED company Seoul Semiconductor has announced consolidated first-quarter revenues of  around $228 M (KRW 257.5 billion). The rise in revenue came from strong sales in general lighting and strength across all segments within the IT division. The rise in automotive lighting sales also proved highly profitable for the company.

According to the company operating margin rose 223 percent year on year showing signs of seasonality effect weakening.

For the lighting division, technologies such as Wicop and Acrich were the drivers behind increasing sales while newly launched products such as filament LEDs and COB (Chip On Board) products further boosted revenue growth. In addition, automotive exterior lamps such as daytime running lights and headlights continued their fast-paced growth.

For the IT division, current customers expanding their product line-ups and new customer acquisitions were the main drivers of rising sales figures, says Seoul. As a result, overall revenues for the company increased significantly despite the weak seasonality normally seen during this time of year. In particular, the mobile and TV segments within the IT division saw noticeable growth leading to better than expected sales and profitability.

To improve share price stability and increase shareholder value, Seoul Semiconductor announced a $885M ( KRW 10 billion) share buyback to be executed within the next six months through Mirae Asset Daewoo Securities.

The company has been pursuing legal action and sending strong warnings to companies that infringe on its patent rights. On March 31, 2017, Seoul Semiconductor filed a patent infringement lawsuit in Germany in the District Court of Duesseldorf against a global electronic components distributor involving an LED product manufactured by Everlight which allegedly infringes on Seoul Semiconductor LED patents.

In addition, notices have been sent to companies in the industry who have copied the company's unique Wicop technology under the name CSP (chip scale package). Wicop is an LED technology in which the chip adheres directly on the substrate without requiring the use of packages.

Company outlook

The company provided revenue guidance of $221M to $240M ( KRW 250 to 270 billion) for the upcoming quarter. The company says it plans to further strengthen its sales and marketing activities for its unique technologies including Acrich and Wicop and focus on acquiring more customers to reach new heights with respect to earnings.

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