Key points:
1.Korea Tobacco & Ginseng Corporation's (KT&G) partner company, ITM Semiconductor, has achieved significant growth in its heated tobacco business, becoming the main focus of the company.
2.In the first quarter, sales of heated tobacco reached $20 million, showing a year-on-year growth of 5.6%.
3.ITM Semiconductor plans to further expand its production capacity by enlarging its production lines at both its domestic and Vietnam factories.
According to reports from South Korean media outlet Metroseoul, ITM Semiconductor's heated tobacco business saw strong sales growth in the first quarter of 2025, with sales reaching 271 billion Korean won (200 million US dollars), a 5.6% increase compared to the same period in 2024. This growth has quickly made the heated tobacco business one of the company's main revenue streams, accounting for 20% (1 billion US dollars) of total sales.
Currently, ITM Semiconductor produces four types of heated tobacco products for KT&G in South Korea, including the Lil Hybrid 3.0 device and accessories introduced last year. The products have been performing well in the European market. In the second half of this year, the company expects to significantly increase deliveries of these products, leading to rapid growth in sales revenue.
In addition, three out of the four heat-not-burn tobacco products produced for KT&G have been adopted as global strategic export products by KT&G. As a result, ITM Semiconductor is working to expand its production lines at its domestic and Vietnam factories, in order to improve quality and supply chain management.
The CEO of ITM Semiconductor, Na Hyuk-hwi, stated that with the increasing variety of heated tobacco products, the company expects sales to significantly increase. The company also plans to expand into new sectors such as robotics and defense while focusing on their core businesses of circuit protection and heated tobacco products.
According to publicly available information, ITM Semiconductor is a major supplier and partner of KT&G for heated tobacco products. Specific cooperation includes:
·Product Supply: ITM Semiconductor provides key components for KT&G's "lil" series of heated tobacco products, such as the "lil HYBRID" model. ITM Semiconductor was once the exclusive supplier for these components. They also manufacture and supply complete heated tobacco devices and pods.
·New Model Development: The two companies are collaborating on developing new models of heated tobacco products, including models targeted for export markets. There are reports that a new product development contract has been signed, with the goal of mass production by 2026.
·Production Expansion: Due to the growing demand for KT&G's heated tobacco products, especially for export models, ITM Semiconductor is expanding its production lines in South Korea and Vietnam.
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