FADU has shaken off the threat of delisting that arose after being indicted by prosecutors on suspicion of violating the Financial Investment Services and Capital Markets Act. The trial is ongoing, so the legal risk has not yet been resolved, but the explanation is that this issue is not a reason for ineligibility to remain listed. Analysts say earnings are visibly improving thanks to the activation of the artificial intelligence (AI) market, increasing the potential for a rise in corporate value.
The KOSDAQ Market Division of the Korea Exchange (KRX) halted FADU's stock transaction on Dec. 19 last year, when news of the indictment became known, and examined whether it should be subject to a "substantive review of listing eligibility." The Korea Exchange (KRX) concluded on the 2nd that "FADU will be excluded from the substantive review," and FADU's stock trading resumed on the 3rd.
Prosecutors determined that FADU presented an annual revenue forecast of 116.3 billion won when it listed on KOSDAQ in Aug. 2023 through the special technology listing program, but the actual figure was 22.5 billion won, which they viewed as problematic.
A Korea Exchange (KRX) official said, "Under KOSDAQ listing rules (Article 56, Paragraph 1), when grounds arise for a listing eligibility review, we conduct a review and, if there is a problem, place the company on the review list; if not, we exclude it," adding, "We reached a conclusion after comprehensively examining FADU's business continuity, financial stability, and management transparency." The official continued, "We determined that FADU can ensure continuity operationally and financially," and said, "From the perspective of corporate transparency, it is not without issues, but given its efforts to improve, we did not see it as desirable to proceed with a delisting review."
The fact that FADU did not become a subject of the substantive review means the matters raised by prosecutors will no longer serve as grounds for delisting. A Korea Exchange (KRX) official said, "Even if a guilty verdict comes out in a future trial, there will be no stock trading suspension or comparable measures."
Just before the decision to resume stock trading, FADU announced it would reorganize its board following the resignation of co-CEO Lee Ji-hyo. The former chief executive led FADU's listing process. FADU shifted to a sole-CEO structure under Nam Yi-hyun and added personnel to strengthen compliance management.
◇ FADU adds "global big tech" clients
FADU had been cited as facing the risk of "delisting," which weighed on the market. With that completely shaken off, analysts say a revaluation of corporate value may take place. On the day, FADU shares hit the upper price limit as trading resumed and closed at 27,600 won.
Based on last year's disclosures, FADU's order backlog amounts to 116 billion won. Among these, the supply contract for finished goods solid-state drives (SSD) won from Taiwan's Macnica Galaxy was revised from 21.5 billion won to 47 billion won. This reflects increased supply volume and rising memory chip prices. This is the largest single contract by volume since the company's founding and exceeds full-year 2024 revenue (43.5 billion won). Fifty percent of the contract amount will be reflected in results within the first quarter of this year. On the 13th of last month, it also won an order worth 20.3 billion won to supply SSD controllers. The securities industry says this could allow FADU to turn a profit in the first quarter of this year.
Business expansion is also expected ahead. According to the recently published "Asia Tech Tour" report by global investment bank (IB) Goldman Sachs, SanDisk has signed a contract to supply data center enterprise (e) SSDs to Google. Goldman Sachs said, "We expect SanDisk's Google data center eSSD supply to ramp up from the first half of 2026," and noted, "By volume, it could potentially surpass Meta." According to the semiconductor industry, FADU's controller is installed in SanDisk's eSSD. With Google onboard after Meta, it has secured another customer.