Samsung boosts localization of chip supply chain

Semiconductor engineers from Samsung Electronics, left, and its partner company EO Technics, inspect laser equipment used for manufacturing chips, Thursday. / Courtesy of Samsung Electronics

By Baek Byung-yeul

Samsung Electronics said Thursday it has initiated moves to improve competitiveness and self-sufficiency in the local semiconductor industry by strengthening its collaboration with domestic chip-related companies and research institutions.

The world's largest memory chip maker will also enhance its eco-friendly approach by expanding the use of renewable energy in operating its semiconductor-manufacturing facilities, which consume huge amounts of electricity.

The announcement shows Samsung's strong drive to achieve mutual growth with its subcontractors and academic and research institutions, as China scrambles to foster its own semiconductor industry and avoid any difficulties in procuring chip-making materials, components and equipment.

It is also in line with the government's effort to nurture high-tech materials, parts and equipment companies to reduce the country's heavy reliance on Japanese suppliers after Tokyo placed export controls on high-tech materials bound for Korea in July, 2019.

Noting that the company has tried to boost the ecosystem for the local semiconductor industry since the early 2010s, Samsung said it has been working closely with domestic equipment companies for the localization of chip-making technologies.

The company gave the example of EO Technics, a local laser equipment maker for semiconductors. In collaboration with Samsung, EO Technics was able to develop high-performance laser equipment used to produce DRAM chips.

“EO Technics employees are proud of being able to develop laser equipment after eight years of research and development activities with Samsung Electronics,” EO Technics CEO Sung Kyu-dong said. “We will keep innovating our products to improve competence in the semiconductor business.”

Another local company Cinos developed a ceramic powder product used in the etching process for semiconductor production and succeeded in localizing coating technology.

Samsung also cooperated with a local chemical material maker Soulbrain to develop high-purity phosphoric acid etchant, an essential material for the etching process of 3D NAND flash memory chips, for the first time in Korea.

Starting July, Samsung will begin joint development of equipment needed to produce semiconductors along with local chip companies. In April, the company signed an agreement with local chip production-related facility makers and component suppliers such as Wonik IPS, Tes, Eugene Technology and PSK.

The company will also provide consulting services to 24 subcontractors to improve their capabilities in manufacturing, environmental safety, human resources, sales and marketing.

To improve the environment for local communities where its chip-production facilities are located, Samsung has been increasingly use renewable energy. Since the end of 2019, the company has installed solar panels that generate 1,500 kilowatts of power at a parking tower in its chip facility in Giheung. The energy produced from the solar power panels will supply energy to office spaces in the facility starting next month.