Korea's Raw Material Market to Increase

Staff -- Semiconductor International, 6/1/1998

The domestic production of Korea's semiconductor raw materials is expected to increase 3% to make up 54% of the yearly market value, approximated at $2.4 billion. The Korea Semiconductor Industry Association estimates the material market to grow 10% this year, and the emergence of new packages will mostly impact that figure.

For photoresists, a yearly market demand is likely to reach $270 million in 1998 to a hefty 49% increase over 1997, and the market for leadframes will be valued at $616 million to mark a 4% increase this year. The self-supply ratio, however, is to exceed 70% of the total market demand.

The slow thin film transistor (TFT) liquid crystal display (LCD) industry is apt to result in a reduction in the sputtering target market this year to $31 million. However, the local production of sputtering targets is to almost double last year's at $15 million. Demand for epoxy molding compounds will be valued at $130 million.

At LG Chemical, 64Mb DRAMs in thin small outline packages (TSOP) were recently added to the lineup. The company has developed epoxy molding compounds for these packages, consisting of a mixture of epoxy resin with 10 types of silica and other additives. Last year, Korea imported 400 tons of epoxy molding compounds from Japan. LG Chemical is also heavily investing into full-package lines of wafer processing by expanding production of isopropyl alcohol (IPA). The successful development has enabled Samsung Aerospace, in conjunction with two local metal-processing companies, to produce the two kinds of raw materials for leadframes. With a localization ratio enhanced to some 50% with the two materials, the company hopes to impact the amount of imported chemicals by more than $75 million this year. Plans in its pipeline include the development of other leadframe materials early next year to beef up the localization ratio to 90%.

Production of carrier tape is another component being produced as manufacturers expand capacity to cope with rising demands for surface-mount devices. The largest supplier, Advantech, is being challenged by 3M and two other local manufacturers. Heesung Metal, which plunged into this line late last year, is going full tilt to solidify a niche market. It recently realized a cost-effectiveness through a successful development of film that had previously been imported.