Petrochemical corporations including LG Chem, SKC and Lotte Chemical are turning to semiconductor materials as a new breakthrough. They are seeking survival by moving away from commodity products such as ethylene, polyethylene (PE) and polypropylene (PP), which China has dominated with overwhelming volumes and low prices, and shifting to high value-added products.
According to the petrochemical industry on the 6th, Kim Dong-chun, LG Chem chief executive officer (CEO and president), said at a town hall meeting on the 22nd that "we will foster semiconductors as well as mobility, robot materials and anticancer new drugs as core businesses for the future."
LG Chem will invest 15 trillion won in research and development (R&D) through 2035 to shift its business portfolio toward high value-added products. About 70% of that will go into industries fostering semiconductors, mobility and robot materials.
LG Chem plans to focus on securing competitiveness in advanced packaging materials in semiconductors. It will develop high value-added products such as packaging adhesives, thermal management materials and glass substrates. The company aims to grow its electronic materials business, currently worth 1 trillion won, to 2 trillion won by 2030.
Lotte Chemical is also preparing to ride the semiconductor boom. Handok Chemical, a Lotte Chemical subsidiary, held a groundbreaking ceremony on the 19th in Pyeongtaek, Gyeonggi Province, for a plant to produce developer (TMAH, tetramethylammonium hydroxide) for semiconductors and displays.
Handok Chemical is the world's No. 1 semiconductor developer manufacturer. It is the only company in Korea that produces developer for semiconductors. Developer is a material needed in the development process that forms fine circuit patterns during semiconductor and display manufacturing.
Handok Chemical supplies semiconductor developer to Samsung Electronics and SK hynix. It is operating a plant in Ulsan. To bet on the semiconductor supercycle, it is expanding a plant in Pyeongtaek. The total investment is 130 billion won. The goal is to begin commercial production in the second half of 2027.
SKC has launched a speed race to commercialize glass substrates at its subsidiary Absolix. Glass substrates are viewed as a game-changer that will replace the plastic material mainly used when connecting semiconductor chips to a printed circuit board (PCB).
SKC raised 1.1671 trillion won through a rights offering in May. It plans to use a significant portion of that as development expense needed in the push to commercialize glass substrates. Absolix is currently producing glass substrate samples at its plant in Georgia in the United States.
ISC, another SKC subsidiary, has begun expanding its semiconductor test socket manufacturing plants in Korea and Vietnam. Semiconductor test sockets are components used in the final stage of semiconductor manufacturing to check whether chips operate normally.
ISC's investment totals 100 billion won, and the goal is to start production at the Korea plant in the first quarter of next year. Through this, it plans to increase next year's sales to as much as 400 billion won. Current sales are 290 billion won. An ISC official said, "We will gather the production facilities scattered in Seongnam and Ansan in Songdo and also relocate organizations related to research and development."