Hanwha set to start chip equipment biz

By Baek Byung-yeul

Hanwha Group is considering starting a semiconductor-making equipment business, as part of efforts to create synergy with its chip-making material business and expand its business portfolio, industry sources said Monday.

The company is focusing on the manufacture of deposition equipment, which is used to deposit materials at the atomic or molecular level on the surface of a silicon wafer to produce electrical properties.

Hanwha Corporation is already active in the machinery business, which makes it reliant on chip-making, so starting its own dedicated unit is expected to create synergy, according to the sources. Also, the company's global division, which supervises its chemical materials business, produces nitric acid, a core material for chip deposition and wet chemical cleaning processes.

A Hanwha Corporation official said the company is currently reviewing the feasibility of the business. “We are in early discussion to launch a deposition equipment business for semiconductor-making. Nothing has been decided on yet so we will give more details when things become clearer,” the official said.

Industry officials said Hanwha's possible entry into the chip-making equipment business will help the company grow as firms are increasing their investments in semiconductors in the wake of a global chip shortage.

Japanese and U.S. firms share the lead in the deposition equipment market. According to data from the Korea Institute for Industrial Economics and Trade (KIET), Japan's Tokyo Electron and Applied Materials and Lam Research from the U.S. have around a 70 percent market share.

In Korea, mid-sized firms such as Jusung Engineering, Wonik IPS, Eugene Technology and Tes are making equipment for chip deposition procedures. KIET said the technological capability level of Korean companies in the sector is around 90 percent that of the leading firms.

Hanwha's possible expansion into the chip-making equipment business is in line with the government's efforts to localize materials, components and equipment for the high-tech industry. Japan imposed export controls on chemical products for chip manufacturing in July 2019 in apparent retaliation against a Seoul court's ruling in October 2018 that ordered Nippon Steel to compensate surviving South Koreans victims of forced wartime labor.

Since then, the government has tried to reduce the local industry's high dependence on Japanese firms, making various efforts to nurture the local industry. Thanks to these efforts, Korea's dependency on Japanese materials and components has plummeted to an all-time low. According to government data, imports of Japanese materials and components were $9.69 billion in the January-April period, the lowest in the first four months of the year since 2001.