This article was published on the ChosunBiz MoneyMove (MM) site at 4:45 p.m. on Nov. 3, 2025.
With Semifive, a global artificial intelligence (AI) application-specific integrated circuit (ASIC) specialist, ramping up its initial public offering (IPO), it has taken the bold step of granting retail investors a redemption right. The move aims to overcome the shock from FADU, which faced allegations of an inflated listing. Although a recent recovery in the semiconductor industry raises expectations for a successful offering, the potential overhang from financial investors (FIs) — large amounts of potential sell orders — could become a variable.
According to the Financial Supervisory Service electronic disclosure system on the 3rd, Semifive filed a securities registration statement on the 17th of last month proposing a public offering corporate value of 700 billion to 800 billion won. Because it has continued to record net losses, it used the profit nonrealization special case (Tesla condition) system to base its corporate value on projected future performance. The lead managers for the listing are Samsung Securities and UBS Securities.
Semifive derived its corporate value based on an average of 22.8 billion won, which is the mean of 12.9 billion won, the present value of its estimated 2026 net profit (16.9 billion won), and 32.6 billion won, the discounted value of its estimated 2027 net profit (51.5 billion won). It then multiplied that by a multiple (PER) of 45.36 and applied a discount rate of 14.3% to 25%.
Semifive is the largest semiconductor special-case listing company since FADU, which listed in August 2023. To prevent the spread of "FADU trauma," it offered retail applicants a redemption right to encourage subscription demand. If Semifive's stock price falls below the offering price, retail applicants can resell shares back to the underwriter at 90% of the offering price. The exercise period for the right is six months from the listing date.
If the stock price falls below the offering price, the underwriter would also have to take on additional offering shares, so it likely could not inflate the corporate value excessively. How realistic the projected performance Semifive presents at its company briefing appears will likely determine the offering price. Semifive's bookbuilding for institutional investors will take place on the 24th–28th of this month.
In FADU's case, its projected performance was nearly false, and the firm, along with its lead manager NH Investment & Securities, was referred to prosecutors at the end of last year on suspicion of violating the Financial Investment Services and Capital Markets Act. FADU presented projected 2023 revenue of 120.2 billion won and suggested a valuation of about 1.5 trillion won. However, when its first performance report revealed that revenue for the first half of 2023 (second and third quarters) was only 400 million won, the stock plunged. The current stock price is about 83% of the offering price.
◇ cumulative invested capital of 240 billion won… entirely a supply-demand burden
Despite the carrot of a redemption right, overhang from FIs and stock option volumes is a factor that will limit upward movement in Semifive's share price. FI-held shares total 20,063,950 shares, accounting for 59.51% of the shares to be listed. That is due to cumulative invested capital reaching 240 billion won. Most FIs placed lockups on half of their holdings in staggered periods of one month, three months, six months, nine months and one year.
Immediately after listing, the total freely tradable shares amount to 12,458,856 shares, or 36.95% of the shares to be listed. Of the freely tradable shares, FI equity accounts for 20.94% of the shares to be listed, 4.92 percentage points more than the allotment for public shareholders (16.02%). As the lockups are lifted in sequence, overhang concerns will grow. The proportion of tradable shares will be 42.87% after one month, 51.14% after three months and 60.73% after six months.
The remaining unexercised stock options total 3,208,600 shares, or 59.4% of the 5,400,000 shares scheduled for the offering. That equals about 9.5% of the total shares to be listed (33,716,419 shares). However, stock options granted to executives carry a mandatory holding period of six months after listing. Of the unexercised volume, 2,323,800 shares, or 72.4%, belong to executives. Therefore, stock option overhang is expected to act as a medium- to long-term supply-demand burden beginning six months after listing rather than immediately after listing.
Semifive, founded in 2019 by CEO Jo Myung-hyun, an alumnus of the Massachusetts Institute of Technology (MIT), is regarded as a leading domestic semiconductor design house. Using its proprietary design platform, it has secured technology that can shorten semiconductor design time by more than 60%, and it has been named a design solution partner (DSP) of Samsung Electronics. Investments from Doosan and Mirae Asset Venture Investment among others drew attention.