"The Supercycle Will Last a Long Time": Semiconductor Materials, Parts and Equipment Makers Move to Expand Capacity

[Financial News] Investment aimed at expanding factories is becoming increasingly active among semiconductor materials, parts and equipment makers. The move appears to be a strategy to prepare for rising order volumes in the medium to long term, as the semiconductor "supercycle" shows signs of lasting longer than expected.
According to the industry on the 1st, ISC has decided to invest 35 billion won to expand its Incheon Songdo plant. ISC produces consumable parts used in semiconductor inspection processes, including test sockets. In particular, it plans to consolidate its separately operated factories and R&D functions at the Songdo plant as part of the expansion.
ISC also plans to introduce an AI-based smart production system at the Songdo plant. The company aims to optimize processes by using data accumulated during the production of test sockets and to upgrade its quality control system. Through this, it plans to improve both productivity and yield.
An ISC official said, "This investment in the Songdo plant is not simply an expansion of production facilities, but part of building a future growth base to respond to the growth of the data center market." The official added, "We will develop Songdo into a key hub for next-generation semiconductor inspection technology and AI-based advanced manufacturing."
LB Semicon is currently carrying out a 50 billion won rights offering to expand its factory. LB Semicon handles back-end processes, receiving semiconductor wafers that have completed front-end processing, cutting the chips, electrically connecting them, and then applying a cover. Its main back-end product is the Display Driver IC (DDI). Recently, it also expanded its product lineup into power semiconductors after agreeing to cooperate with Renesas on back-end processing for power semiconductors.
The rights offering being pursued by LB Semicon is seen as a strategic fundraising move to secure investment resources in advance, in line with the launch schedules of next-generation products at major semiconductor clients at home and abroad and their medium- to long-term demand roadmaps. Of the funds raised, 30 billion won will be used to expand equipment for the 'bump' process, which is specialized for system semiconductors, or non-memory chips.
K&J, which focuses on semiconductor parts and materials, has installed a silicon grower at its Asan plant in South Chungcheong Province and has begun trial operations. A silicon grower is used to grow polysilicon, a semiconductor material, into single-crystal, large-diameter silicon ingots.
K&J plans to expand its business into related parts as well as silicon materials, leveraging the precision processing and cleaning technology for semiconductor components it has accumulated over the years. After stabilizing the silicon grower, the company plans to sequentially optimize ingot growth conditions, carry out post-processing, and conduct quality evaluations.
The reason semiconductor materials, parts and equipment companies are moving to expand factories is that the semiconductor supercycle appears likely to last longer than expected. In this regard, the World Semiconductor Trade Statistics (WSTS) said the global semiconductor market is expected to reach a record $975 billion this year, up 26.3% from $772 billion last year.
Jonghwan Lee, professor of system semiconductor engineering at Sangmyung University, said, "As AI applications expand worldwide, demand for AI semiconductors such as High Bandwidth Memory is rising explosively." He added, "In Korea, too, there is a growing sense of preparing for a prolonged semiconductor supercycle, with projects such as the Yongin Semiconductor Cluster and the Honam Mega Project being pushed ahead." He continued, "In step with this trend, not only large companies in upstream industries but also small and midsize materials, parts and equipment firms in downstream industries are pouring efforts into factory expansion."
butter@fnnews.com Kang Kyung-rae Reporter