Korean Companies Form Alliances Abroad

-- Semiconductor International, 10/1/1999

Joosung Engineering became the first Korean semiconductor equipment maker to form a strategic alliance with a foreign company, Japan's ULVAC. The two companies have agreed to cooperatively develop integrated metalization processing equipment such as cluster tools and process chambers targeted for multi-layer wiring architectures of highly integrated semiconductors. Joosung will be involved in CVD technologies, while ULVAC will concentrate on PVD but will share key technologies related to both CVD and PVD systems. Standardized platforms and software will be established, and a system for laboratory use is planned for October. Mass production is expected next year, with each company handling local sales. Exports to other countries are being discussed, and there is a possibility the companies will set up a new joint venture, according to a spokesperson.

Joosung also is going to open a sales office in the United States before year's end. An investment of $1M will fund global marketing and after-sales service activities. Joosung currently exports CVD systems to the U.S. and Taiwan, and is going to open a new market in Japan, for which there are export talks with five would-be clients. Joosung President Hwang Cheol-ju said he plans to list the company on the NASDAQ next year.

Meanwhile, LG Electronics (LGE) and Philips Flat Display Systems (FDS) have reached a 50:50 joint venture agreement, with LGE receiving a $1.6B investment from Philips for digital TV, PDP and LCD lines. This represents the largest foreign investment recorded in Korea. Both companies also agreed to consider a joint venture and technical collaboration for development of plasma displays and new FDS areas.

The alliance combines LGE's competitive manufacturing edge with Philips' advanced technology and marketing power, leveraging the joint venture's competitiveness. Profits will be invested into capacity expansion. Production capacity at the first and second lines will be increased to the maximum. LGE will continue to invest $1.1B into fourth-generation 680 x 880 mm LCDs.