The authors are analysts of Shinhan Investment Corp. They can be reached at bh.lee@shinhan.com and wonyong.sim@shinhan.com, respectively. -- Ed.

Robot maker specializing in vacuum transfer robots

T-Robotics specializes in robots used in semiconductor/OLED production processes for the transfer of wafer/glass under vacuum conditions. These robots require sophisticated technologies as they must: 1) maintain a vacuum environment (minimize particles); 2) offer stable performance under high vacuum, high temperature, high speed, and high load conditions; and 3) deliver high repeatability. As of 3Q21, OLED logistics systems and vacuum transfer robots account for over 85% of the company's total sales.

In vacuum transfer robots, the main competition comes from Japanese firms. T-Robotics also holds the technology for commercial production of rehabilitation robots and logistics automation robots. In addition, the company is expanding into the market for virtual reality (VR) and extended reality (XR) hardware and equipment through its subsidiary Motion Device.

Upbeat on diversifying application of robots and expansion into VR/XR

The focus market for industrial robots is widening from IT (chip/display process and transfer equipment) to logistics and healthcare industries. T-Robotics is now at the commercialization stage for logistics automation robots and rehabilitation robots. Product development efforts for logistics automation have focused mainly on automatic guided vehicles (AGV) and autonomous mobile robots (AMR). For further expansion into healthcare, the company has joined hands with MyoSwiss for supply of the Myosuit brand of wearable robotic systems and rehabilitation robots to major hospitals.

Meanwhile, Motion Device (86% held by T-Robotics) continues to expand its range of content offered for VR motion simulators. In addition to Disney content, the subsidiary's IP assets now include 14 in-house developed content and 7 licensed content. The subsidiary is also collaborating with theme parks and theaters, reinforcing its IP competitiveness, and preparing to enter into the XR hardware market.

Earnings seen lower in 2021 but likely to gradually recover in 2022

For 2021, we estimate sales at KRW51.9bn (-21.8% YoY) and operating loss at KRW2.6bn (negative swing YoY). Earnings should come in lower YoY due to capex cutbacks at display makers and other major clients, but sales will likely recover at a gradual pace in 2022 as domestic/overseas OLED investments start to pick up and earnings contribution from new businesses increases in earnest. T-Robotics also stands to benefit from expanding use of robots by major IT companies as well as growing adoption of robots in logistics and healthcare industries. Progress on expansion into VR, XR and other growth businesses will be another point to keep an eye on in 2022.