“COVID-19, Not a Crisis but an Opportunity” Domestic Technology Root Company ‘Dongwon Parts’

Interview with Cho Deok-hyung, CEO of Dongwon Parts
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"We Are the Only One in the World Offering One-Stop Parts Processing Manufacturing"

Cho Deok-hyung, CEO of Dongwon Parts, who demonstrated the power of 'K-Manufacturing' through technology localization, explained, "This period, when the global manufacturing industry is slowing down due to COVID-19, is the golden time for domestic manufacturing." Photo by Kim Hee-yoon

[Asia Economy Reporter Kim Heeyoon] “We have the will to challenge and accomplish things that others have not done, products that others avoid, and excessive and demanding quality conditions required by our clients?areas that are somewhat difficult at our level. We have been walking a different path that others have not taken for the past 15 years, and it seems that the results are finally emerging today.”

There is a root company demonstrating the power of 'K-Manufacturing' by recording sales growth through technology localization. Dongwon Parts produces domestically localized semiconductor equipment parts called 'shower heads.' Trading with major semiconductor companies both domestically and internationally, it has tripled its sales in the past four years. Annual sales, which were 19.3 billion KRW in 2016, reached 34.6 billion KRW last year. Sales exceeded 20 billion KRW in the first half of this year.

Dongwon Parts CEO Cho Deok-hyung predicted that semiconductor market demand would increase despite uncertainties caused by COVID-19 and expanded parts production facilities. His prediction was correct. Global companies increased orders to partner companies in other countries as factory shutdowns in the U.S. due to COVID-19 caused expected supply disruptions. Sales in the second quarter of this year increased by more than 30% compared to pre-COVID levels.

Master machinist CEO Cho said, “The reason for our company's growth lies in our one-stop solution system. Since we can handle everything from raw material processing to bonding post-processing, surface treatment, cleaning, and assembly in one place, we have reduced production costs and improved quality.”

According to a survey by the Korea Institute for Industrial Economics & Trade on the impact of COVID-19 on domestic manufacturers, the machinery and materials sectors had the highest negative response rate at 60%. Especially in the semiconductor industry, more than half of companies (51.5%) cited 'supply chain disruption' due to parts import difficulties as a negative impact channel. Dongwon Parts was able to prevent supply chain disruption problems in advance through its one-stop solution.

Interior view of the Dongwon Parts factory where the 'One-Stop Solution System,' covering everything from raw material processing to final assembly, is applied. Photo by Dongwon Parts

In 2018, Dongwon Parts invested nearly 20 billion KRW solely to expand equipment needed for each stage of semiconductor parts processing, cutting, and deposition, establishing machining facilities. In the first half of this year, it invested an additional 20 billion KRW to strengthen processing and surface treatment sectors.

What was the background for this bold investment? CEO Cho explained, “We replaced 3-axis machining centers in the processing sector with advanced 5-axis equipment and strengthened plating processes in the surface treatment sector. Following the operation of plants 1 and 2, plants 3, 4, and 5 are being sequentially launched by October this year. We believed it was necessary to establish a solid foundation through proactive investment, so we proceeded boldly.”

CEO Cho said that the current slowdown of Chinese manufacturing due to COVID-19 is a golden time for domestic manufacturing. He judged that now is the right time to outpace China’s pursuit, and the elevated status of K-quarantine along with the increasing demand for Korean manufacturing products from global companies demonstrates this phenomenon.

Dongwon Parts is recognized for its technological prowess, holding six domestic patents and one overseas patent related to semiconductor equipment parts. CEO Cho said, “Our competitors will ultimately be China and emerging Southeast Asian countries, so our goal is to implement a smart factory suited for small-lot, multi-product production to reduce labor costs and specialize technology. I want to create a system where experts who understand the entire process control the site from the office, not working in front of machines, while I am still active.”

Starting in 1997 as a machine parts factory with seven employees in Namdong Industrial Complex, Incheon, Dongwon Parts moved its headquarters to Siheung Smart Hub in 2014 and currently operates a second plant. Plants 3, 4, and 5 are scheduled for completion in the second half of this year. CEO Cho emphasized, “Since we are the only company in the world that manufactures machine equipment parts processing in a one-stop manner, we will strive to secure unique technology in the future.”

Dongwon Parts Company Introduction and Sales Performance Graph

This content was produced with the assistance of AI translation services.