SK Siltron Invests 1 Trillion Won to Expand Wafers... Accelerates Investment After Joining SK Group (Comprehensive)

Contributing to Revitalizing the Local Economy by Creating Jobs for Over 1,000 People

[Asia Economy Reporters Sunmi Park, Minjae Kwak] SK Siltron, the only semiconductor wafer manufacturing company in Korea, will invest about 1 trillion KRW in building a silicon wafer factory for semiconductors. SK Siltron plans to build an additional factory in Gumi, Gyeongbuk, starting foundation work in the first half of this year and beginning full-scale mass production from the first half of 2024. Along with the factory construction, approximately 1,000 additional jobs will be created.

On the 16th, SK Siltron announced plans to invest a total of 1.0495 trillion KRW over three years to expand a state-of-the-art semiconductor wafer factory in the 3rd Industrial Complex of the Gumi National Industrial Complex, where its headquarters is located, to ensure stable supply of wafers ordered by semiconductor companies and to secure business competitiveness. The semiconductor silicon wafers to increase production are 12-inch (300mm) size products, which are in short supply.

SK Siltron has been receiving continuous requests from customers such as Samsung Electronics, SK Hynix, Intel, and TSMC to increase wafer production. This is due to the severe shortage of automotive semiconductors that began in the fourth quarter of 2020, followed by explosive growth in demand for various IT devices due to increased non-face-to-face demand, which has rapidly increased production volumes at semiconductor manufacturers.

SK Siltron plans to become the global No. 1 wafer company through this investment. According to industry sources, SK Siltron currently ranks third in the global market for 300mm silicon wafers.

◆Making it pays off... wafer shortage amid surging semiconductor demand= SK Siltron’s decision to invest a total of 1.0495 trillion KRW over three years to expand 300mm wafer production was driven by the need to respond to a market facing wafer supply shortages due to surging semiconductor demand. SK Siltron’s aggressive investment move, aiming to become the world’s No. 1 wafer company, was supported by the full backing of SK Group Chairman Chey Tae-won, who is deeply committed to semiconductor investments.

On the 16th, Jang Yong-ho, President of SK Siltron, said regarding the 300mm wafer expansion investment plan, "This expansion investment is a challenging investment for accurate prediction of market environment changes and agile response," adding, "We will leap forward as a global wafer industry leader by acquiring high-quality wafer manufacturing capabilities through technological innovation in collaboration with global semiconductor companies."

Recently, as investments in data centers continue to expand and semiconductor demand surges due to growth in 5G and electric vehicle markets that heavily use semiconductors, semiconductor manufacturers have been aggressively investing in facilities. As a result, wafers, the core material for semiconductor substrate production, are facing a direct supply shortage. SK Siltron has already been producing the maximum monthly volume for the past two years.

Global wafer manufacturers predict that supply shortages will continue at least until 2026. In January this year, the U.S. Department of Commerce released results from a survey of about 150 semiconductor supply chain companies, citing wafer supply shortages as a major cause of the semiconductor shortage.

◆Chairman Chey Tae-won’s ‘steadfast’ semiconductor investment... growth follows his touch= SK Siltron’s growth is considered one of Chairman Chey’s representative semiconductor investment success stories, along with SK Hynix, which was acquired 10 years ago. SK Group acquired SK Siltron from LG Group in 2017 for about 1 trillion KRW. At that time, the company’s sales had stagnated at around 830 billion KRW since 2007 for about 10 years.

However, after being incorporated into SK Group, SK Siltron focused on facility investments until 2018 to increase 12-inch silicon wafer production capacity, resulting in a sharp 44% sales growth to about 1.35 trillion KRW in 2018 compared to the previous year. Since then, SK Siltron has maintained double-digit annual sales growth.

An industry insider said, "SK Siltron has completely transformed since being acquired by SK Group," adding, "It is now a core wafer supplier in the domestic semiconductor industry and maintains technological leadership by collaborating with customers on advanced process development."

While SK Siltron had focused on silicon wafer production, it expanded its business area to next-generation power semiconductor materials by acquiring the silicon carbide (SiC) wafer business unit of DuPont in the U.S. in March 2020. This also enjoys full support from Chairman Chey, who plans to invest over 100 trillion KRW in eco-friendly businesses. Recently, SK Siltron’s U.S. subsidiary announced plans to invest about 320 million USD in the SiC wafer business, which can improve electric vehicle energy efficiency.

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