Hongjin Tech targets 5-7% gross margin rise by 2027

Hung King Technology, a leading Taiwanese manufacturer of IC test handlers, has long supported the global semiconductor manufacturing supply chain with high-performance testing equipment. As wafer fabrication processes increasingly shrink toward 7-nanometer and even 5-nanometer nodes, the requirements for testing precision and environmental control are rising simultaneously. Speaking at a meeting in Hsinchu on the 28th of this month, General Manager Weng De-kuei pointed out that over the next three to five years, the company's product portfolio will gradually transition toward higher-end active temperature control systems and co-packaged optics equipment, with such products officially slated for revenue recognition by 2027.

High-end active temperature control (ATC) systems are critical devices that provide precise temperature regulation for wafer testing environments. Traditional passive temperature control has become inadequate for meeting the thermal management demands of high-density chips, especially with the emergence of multi-layer packaging and 3D integrated circuits, where temperature fluctuations significantly impact testing accuracy and wafer reliability. General Manager Weng stated that Hung King has developed a system capable of rapidly adjusting temperatures within ±0.5°C, equipped with remote monitoring and automatic calibration functions that effectively reduce test failure rates and enhance customer productivity.

Co-packaged optics (CPO) equipment focuses on optical alignment and inspection between the chip and packaging layers. As packaging technology becomes more complex, optical alignment precision has become critical to ensuring packaging quality. CPO equipment can capture alignment errors in real-time with high resolution and provide immediate correction suggestions to reduce packaging defect rates. General Manager Weng pointed out that the gross margin of CPO products is higher than that of traditional testing machines, primarily due to high technological barriers and customized service demands, prompting clients to pay a premium for precision and reliability.

For Hung King, incorporating ATC and CPO into its revenue structure is expected to boost overall gross margins by approximately 5% to 7% by 2027. This move not only diversifies market risks associated with single testing machine models, but also captures the high value-added demand driven by semiconductor process upgrades. Investors can anticipate further breakthroughs by the company in technological innovation and product diversification, which may drive the overall upgrading of Taiwan's semiconductor equipment industry. Industry observers also believe that Hung King's strategy aligns with the high-end manufacturing and packaging technologies promoted by the Taiwanese government's "Semiconductor Industry Development Plan," helping to consolidate Taiwan's core position in the global supply chain.