CEO cites fair valuation, rigorous review, semiconductor ties behind rare Kosdaq debut
While high-profile Korean startups such as Toss and Yanolja chase Wall Street valuations — following Coupang’s US listing — a British chip-equipment maker is betting on Seoul instead.
TeraView, a UK firm that commercialized terahertz technology for ultraprecision semiconductor inspection, chose to list on Kosdaq rather than in London or New York. The company counts Samsung Electronics, Intel and Nvidia among its customers, supplying critical components used in advanced chip manufacturing.
“TeraView chose to list based on a clear commercial strategy that demanded a substantial presence in Korea and Greater Asia for the company to scale its growing business,” TeraView CEO Don Arnone told The Korea Herald via email.
With roughly 60 percent of its revenue generated from semiconductor companies, Korea is a key market for the British tech firm. Many of its major clients are based here.
Arnone said the listing was a way to “demonstrate direct and solid support to Korean (and wider Asian) customers.”
“It was also prompted by the desire to move a component of TeraView’s manufacturing to Korea, as well as R&D, to develop new markets,” he said, referring to the company’s plan to establish an Asia hub in Korea and expand into Singapore, Malaysia and Taiwan.
TeraView debuted on the Kosdaq through the Korea Exchange’s special listing track for tech companies, which allows firms to go public based on technological potential rather than strict financial requirements. The bourse operator introduced the program in 2005 as part of a broader push to position Kosdaq as Korea’s version of Nasdaq.
Arnone said the special track enabled the company to secure a “fair value,” which he argued would not have been possible in the UK, where deep technologies are “less understood and therefore less accurately valued.”
The listing process itself, however, was rigorous.
“Entry was more demanding than in other foreign markets, a fact confirmed by TeraView personnel who have experience in the US and UK markets,” he said.
Although the listing had been planned years in advance, TeraView benefited significantly from the recent stock market rally, Arnone said. The surge pushed its valuation to 568 billion won ($393 million) on its debut. After climbing to a peak of 605 billion won, the valuation had retreated to 311 billion won as of Friday.
“TeraView has clearly benefited from the Kosdaq rally, particularly as it has centered on companies active in the AI and semiconductor chip (high bandwidth memory) sectors, where TeraView supplies vital inspection equipment for chip development and production,” he said.
He added that tech-savvy Korean investors played a key role in achieving more effective price discovery.
“This helps secure not only the appropriate valuation for the company, but also means that tech-savvy Korean investors are better positioned to understand the technology and markets for a deep tech company such as TeraView as it grows on the Kosdaq,” he said.
TeraView’s largest shareholder is Dage Precision Industries, the UK subsidiary of Nordson, a US company listed on the Nasdaq, which holds a 13.35 percent stake. The company’s management, including its CEO, and UK institutional investors also hold stakes, while Samsung Securities, the lead underwriter of the listing, owns 3.46 percent.
From Korea discount to Korea draw?
Currently, 21 foreign corporates are listed on the local stock market, including TeraView.
Two are listed on the main bourse Kospi — Singapore-based biosimilar and antibody drug developer Prestige BioPharma, and Cayman Islands-registered auto sales company LVMC. The remaining 19 are on the Kosdaq.
Although the Korea Exchange has been proactively promoting listings by foreign companies, appetite has waned in recent years, partly weighed down by the “Korea discount.”
In 2016, six foreign companies went public on the Korean stock market. Listings continued steadily through 2021, but none emerged for several years until TeraView’s debut last year.
While expectations are rising that listing activity could pick up amid the market rally that has pushed valuations higher, Korea Exchange CEO Jeong Eun-bo emphasized the importance of leveraging Korea’s semiconductor supply chain.
“For overseas companies considering a local listing, industrial synergy is the most important factor,” Jeong said at a press conference on Feb. 5. “Supply chain companies, particularly in the semiconductor sector, are increasingly looking to enter the Korean market.”
When asked whether TeraView would recommend listing in Korea to other foreign firms, Arnone said: “We would.”
“Our guidance would be that if there are strong commercial and technology drivers to list in Korea and access the Korean and Greater Asian market, Kosdaq would be an excellent opportunity,” he said.
silverstar@heraldcorp.com
