Investment expansion in artificial intelligence (AI) semiconductors is widening the landscape of Korea's semiconductor industry. Until now, the direct beneficiaries of the semiconductor boom were concentrated among memory chip manufacturers and equipment makers, but recently, as the difficulty of DRAM processes has increased around high-bandwidth memory (HBM), the trickle-down effect is said to be spreading across materials, parts, and equipment (components and materials) corporations.
According to the industry on the 17th, HBM and advanced DRAM require more processes than past memory to complete. As the process of implementing circuits with finer features and stacking them in multiple layers is repeated, the number of process steps involved in making semiconductors has increased. As a result, the importance of not only equipment performance but also the quality of materials and chemicals used in the process and supply stability is growing, the industry said.
The securities industry analyzed that this change is also affecting the expense structure of the semiconductor industry. While equipment, once introduced, is used for a certain period, process chemicals and materials are consumables that are continuously used while the line is operating. As processes become more complex, the types and specifications of materials used increase, creating an atmosphere in which the effects of AI Semiconductor investment are spreading beyond equipment to the entire process. This is because demand for related materials continues to arise while production lines are operating even after equipment installation.
Amid this trend, materials corporations such as Purit and LK CHEM are drawing attention. Purit started with a business that refines spent semiconductor chemicals, but is now expanding its business to directly produce and supply raw materials for thinner (diluent solution) used in the photo process that draws circuits. As semiconductor processes become finer, the work of drawing circuits is repeated multiple times, which in turn increases the amount of related chemical materials used. Shin Hee-cheol, a researcher at iM Securities, said, "Purit's EL (Ethyl Lactate) product is contributing to improved profitability as its supply share to Samsung Electronics expands."
LK CHEM is a supplier of key materials used in processes that coat a very thin film on semiconductor circuits. In HBM and advanced DRAM processes, the process of stacking these thin films more precisely becomes more important, and analysis suggests that demand for high-difficulty materials is increasing accordingly. Shinhan Investment & Securities noted in a report that the importance of companies that can stably supply such high-grade materials is growing as processes become more challenging.
Along with this, small and mid-sized chemical (chemistry) components and materials corporations such as ENF Technology and YCChem are also being mentioned. ENF Technology supplies chemicals needed in the process of making and finishing semiconductor circuits, and the structure is such that the types and levels of chemicals used increase as processes become more complex. YCChem is a corporation that makes chemical materials used to draw semiconductor circuits, and analysis suggests that as fine processes increase, demand is growing to source high-purity materials domestically.
The reason the securities industry is focusing on these corporations lies more in changes to the structure of the semiconductor industry than in short-term results of individual corporations. The expansion of AI Semiconductor investment is not only increasing output but also raising process difficulty, and analysis suggests that in this process, the role of materials and chemical corporations supporting the lower levels of the process is growing alongside existing large companies.
Regarding this change, the industry sees it as an opportunity to broaden the competitiveness of Korea's semiconductor industry as a whole. As the investment cycle centered on large semiconductor corporations and equipment makers is subdivided into process units, a structure is forming in which components and materials corporations responsible for each stage grow together. The spread of AI Semiconductor and HBM is seen as a turning point that broadens the base of the domestic components and materials industry beyond the short-term business cycle.
A semiconductor industry official said, "The expansion of AI Semiconductor investment is not only increasing output but also raising process difficulty, and in this process, the role of materials and chemical corporations supporting the lower levels of the process is growing alongside existing large companies."