Domestic and International Orders Plummet... Small and Medium-sized Materials and Parts Companies Struggle with Nuclear Phase-out

Compressed Air Dehumidifier Manufacturer Geumseong High-Tech
Lowered Costs with 1990s Localization... Booming Orders Domestically and Abroad
Sales Cut to One-Sixth in Last 4 Years... Accelerated Nuclear Phase-Out Since 2017
Half of Sales from KHNP Contracts Plummet... Overseas Companies Say "Can't Trust Products from Nuclear Phase-Out Countries"

Geumseong High-Tech, a manufacturer of compressed air dehumidification devices, saw its sales drop from 18.7 billion KRW to 3.6 billion KRW over the past four years due to the impact of the nuclear phase-out policy. The photo shows the interior of Geumseong High-Tech's factory located in Gimpo, Gyeonggi Province.
[Photo by Joonhyung Lee]

[Asia Economy Reporter Lee Junhyung] Geumseong Hightech, a manufacturer of compressed air dehumidification devices located in Gimpo, Gyeonggi Province, is a "thriving company." However, its sales have plummeted to one-sixth over the past four years. This is due to the government's nuclear phase-out policy, which abruptly cut off contracts with Korea Hydro & Nuclear Power (KHNP), accounting for nearly half of the company's sales.

Moreover, even overseas nuclear companies have withdrawn their contract intentions, saying, "How can we trust and use products from a nuclear phase-out country?" The COVID-19 pandemic also reduced facility investments by the company's main clients, pushing the company into crisis.

Geumseong Hightech localized the production of 'compressed air dehumidification devices,' which were only produced in advanced countries like the United States and Japan, in the 1990s. These devices remove moisture, dust, and other impurities from the air and are essential equipment for advanced industries that require clean atmospheric conditions.

Used widely in various fields such as semiconductor processes, nuclear power generation, and biotechnology as 'industrial high-performance air purifiers,' Geumseong Hightech lowered the unit price of these devices to 60-65% of imported products. Even including tariffs and logistics costs incurred during import, the price is more than 50% lower.

Compressed air dehumidification device developed and manufactured by Geumseong Hightech. [Photo by Geumseong Hightech]

In 2011, the company received the Silver Tower Industrial Medal from the government, and as word spread in the industry, its performance soared. Orders poured in from large corporations like Samsung SDI, SK Hynix, Hyundai Motor Company, as well as mid-sized companies such as Seoul Semiconductor and Daeduck Electronics. Overseas orders also flooded in, with exports accounting for 70% of the volume at its peak.

Park Heungseok, CEO of Geumseong Hightech, said, "Since 2017, the nuclear phase-out policy accelerated, and our performance began to collapse," adding, "We supplied compressed air dehumidification devices to all KHNP nuclear power plants, including Wolseong, Yeonggwang, and Gori, but as KHNP's facility investments, which accounted for a significant portion of our sales, shrank, contracts with partner companies were terminated."

Sales, which had been rising annually and reached 18.7 billion KRW in 2017, were halved to 9 billion KRW in 2019. To make matters worse, as the COVID-19 pandemic worsened the economy, new investments across industries decreased, and last year's company sales shrank to 3.6 billion KRW. The number of employees, which once reached 96, has now dropped to 29.

Exports have also dropped to zero. Overseas nuclear companies that had shown interest withdrew their contract intentions following the Korean government's policy, and with overseas meetings canceled one after another due to COVID-19, the company was cut off even from remaining customers. CEO Park revealed, "Ten years ago, when Korea won the UAE nuclear power contract, overseas interest in domestic nuclear-related companies increased, but it changed after the nuclear phase-out declaration," adding, "We even received a quotation inquiry from a UK nuclear public enterprise, but they ultimately said they couldn't use products made in a country that is phasing out nuclear power."

CEO Park holds expectations for sales recovery amid this year's anticipated semiconductor supercycle (long-term boom). He believes the company can directly benefit from the revival of new investments centered on semiconductor companies. He emphasized, "In the semiconductor shortage situation, the government needs to actively support the industry."

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