FADU, a fabless (semiconductor design) corporations that hit the daily upper price limit for three straight sessions the moment transactions resumed on the KOSDAQ market, is drawing attention. Once pushed to the brink of delisting amid an earnings controversy, the corporations now appears to be undergoing a reassessment of its technological value on the back of the spread of artificial intelligence (AI) infrastructure.
The shift to a sole-CEO system under Nam Ihyeon, carried out along with the decision to maintain the listing, is seen as a will to normalize management by restoring market trust through improved governance. The resignation of former co-CEO Lee Jihyo is interpreted as an assumption of responsibility for legal risk.
In Aug. 2023, immediately after listing on the KOSDAQ, FADU suffered an "earnings shock" as sales plunged following SK hynix's halt of orders, after being a key client. Contrary to the rosy outlook presented at the time of listing, quarterly revenue was only in the hundreds of millions of won, raising doubts about business continuity, which led to allegations that management inflated revenue and to a prosecutors' indictment. The Korea Exchange (KRX) judged that grounds had arisen for a substantive review of listing eligibility due to omissions of important matters in the listing review documents, and the corporations has faced market distrust, including a recent suspension of stock transactions.
On the 3rd, with the decision to maintain the listing and the resumption of transactions, the market is running the numbers again on FADU. The corporations has recently shown tangible steps to expand revenue by securing orders for solid-state drive (SSD) controllers for AI data centers and clinching a white-label (brandless finished goods) SSD contract. This is interpreted as a sign that it is reducing reliance on specific clients, a past concern, and diversifying its customer base. It is seen as an attempt to bolster business fundamentals by expanding beyond chip design into finished SSDs.
FADU is back in the spotlight because the role of NAND flash controllers has grown crucial in AI data center environments. The corporations's flagship controllers are system semiconductors that oversee the process of storing and reading data in NAND flash. They may look like simple auxiliary parts, but in reality they are akin to the "brain" of storage, determining error correction (ECC), lifespan management and power efficiency.
As AI workloads shift from training to inference, supplying data without delay has emerged as a key task. To fully utilize the performance of expensive graphics processing units (GPUs), the input/output (I/O) bottleneck of SSDs, the storage devices, must be resolved. In this process, FADU's low-power, high-performance design capabilities align with industry demand. The global AI front is now moving from a competition over "storage capacity" to one over "power efficiency and processing speed."
The transition to next-generation interface standards for PCIe (data transfer lanes) is creating opportunities for FADU. PCIe is like a "highway" for data exchange between semiconductors; as the standard is upgraded from Gen4 to Gen5 and Gen6, the road widens and speeds up. Each change of standard requires entirely new design capabilities. From the outset, FADU focused on low-power architectures for data centers, designing Gen5 and next-generation Gen6 controllers, and it is emerging as an alternative amid the PCIe transition.
In the global market, FADU stands shoulder to shoulder with global corporations such as Marvell and Phison, and in the institutional sector of low-power design in particular, it has been recognized by global big tech firms including Meta for "overwhelming power efficiency," and is assessed to have secured top-tier technological capabilities in the industry.
There are still challenges. The flagship products are concentrated in certain overseas customer groups that are sensitive to the global IT investment cycle, and the white-label business must prove its cost-management capability against NAND price fluctuations. In addition, whether the next-generation PCIe Gen6 controller actually goes into mass production and consolidation into results will likely be a watershed in determining whether FADU can maintain its technological edge over the long term.
An industry official said, "FADU's recent trajectory reflects expectations for resolving storage bottlenecks in the AI era and the memory supercycle," adding, "But given the magnitude of past disappointment, it must prove that orders actually translate into stable quarterly results."