Why we are investing in Korea
By Boris Jenniches
In 1954, BASF was one of the first Western multinational companies to enter Korea in the wake of the Korean War with the establishment of a trading company. In ensuing years, Korea has provided a textbook example of how its rapid economic growth has influenced the regional and global strategy of multinational corporations, including BASF.
Having established seven production facilities in four locations since 1980, BASF, the world’s largest chemical company, took the important step of moving its Asian regional headquarters for electronic materials to Seoul from Hong Kong in 2013 and establishing an electronic materials R&D center last year.
The growing presence of our electronic materials business in Korea reflects the rise of such global industry leaders as Samsung Electronics, SK Hynix, LG Electronics and LG Display. This further highlights the significance of Korea to BASF’s global strategy as electronic materials are emerging as one of the key business sectors here.
For example, Samsung Electronics used to produce white goods but has since expanded into semiconductors and displays, where electronic materials play an important role in the production process. Indeed, Korea’s leading companies with their widespread activities in semiconductors and displays, along with its well-established consumer electronics sector, provide added leverage to the greater electronics industry.
Electronic materials is one of the most advanced sectors in the chemicals industry. With both semiconductors and displays made of multiple layers of material, each layer must be cleaned, connected and polished during the manufacturing process. This means that chemicals used during manufacturing are deployed on the molecular level given the small size and complexity of each layer. This calls for highly tailored solutions and extreme purity levels.
The increasing importance of chemistry in the semiconductor and display manufacturing process is the reason why global chemical companies are setting up their R&D hubs in Korea with the tools and know-how matching the requirements of their customers. This is now the most efficient and effective way to develop the tailored solutions needed for the upcoming challenges facing the semiconductor and display industry.
BASF’s electronic materials and chemicals business in Korea builds on the partnership that the company has already with other leading Korean manufacturers. For example, BASF’s cooperation with Hyundai Motor led to the development of high-performance engineering plastic applications to replace steel in producing cars that are lighter in weight and more fuel efficient. Since then, engineering plastics has become one of the fastest growing production sectors for BASF in Korea.
As the Hyundai example showed, it is important to be close to the market since it helps identify market trends and customer needs earlier. This has been another good reason why BASF set up its regional headquarters for electronic materials in Korea.
Korea is an important location for electronic materials business because of its commitment to developing cutting-edge technology. This is further strengthened as its intellectual property laws continue to improve, mutually protecting the valuable assets of the Korean companies as well as the international suppliers that service them.
To be close to our customers in Korea, BASF decided to establish its new regional Electronic Materials R&D Center at Sungkyunkwan University’s Natural Sciences Campus.Having an R&D center lays the foundation for close collaboration with our customers, helping them to be more successful in developing their products for the global market.
The electronic materials industry is rapidly evolving. We are a strong believer that by playing with the best, we can grow together and benefit from each other’s knowledge and experience.
Boris Jenniches is vice president, business management, BASF Electronic Materials Asia-Pacific.