[Company Insight] TMC Equipped with Technology to Withstand IPO Ice Age

Specialty Gas Company for Semiconductor Processes Aiming for First IPO of the New Year
Leading with Domestic Technology, Achieving 55% Annual Growth

[Asia Economy Reporter Hyungsoo Park] Due to the sluggish semiconductor market, the stock prices of global semiconductor companies such as Samsung Electronics and SK Hynix have plummeted since the beginning of this year. As semiconductor demand declines amid domestic and international economic recessions, prices continue to fall. While semiconductor-related stocks have been sluggish in the domestic stock market, TMC, a special gas manufacturer for semiconductors, is kicking off the new year’s initial public offering (IPO). Despite the downturn in the public offering market, TMC has chosen to confront the challenge head-on, leveraging its unique technological capabilities and an average annual sales growth rate exceeding 55% over the past three years.

Founded in January 2015, TMC is a manufacturer of special gases used in semiconductor processes. It possesses all process technologies required for producing special gases, including gas synthesis, rare gas extraction and separation, special gas purification, mixing, and filling technologies.

Leader in Domestic Production of Semiconductor Gases

TMC is set to enter the KOSDAQ market through a special listing under the Materials, Parts, and Equipment (SoBuJang) special listing system. Korea Evaluation Data, which conducted the technology evaluation for the special listing, identified TMC’s proprietary production system capable of supplying various process special gases required by domestic semiconductor companies as its core technology. It was evaluated that major semiconductor companies such as Samsung Electronics and SK Hynix have reduced supply risk factors for raw materials, which is significant. TMC has also secured price competitiveness by establishing a production system utilizing its independent process design capabilities.

The sales composition ratio is highest for xenon (Xe) and krypton (Kr), used in semiconductor etching and ion implantation processes, accounting for 42.4%, followed by excimer laser gases used in lithography processes at 30.2%. Special gases such as CF series and CO gases account for over 20% of sales. By expanding its product lineup and customer base, TMC recorded cumulative sales of 234 billion KRW through the third quarter of this year. The average annual sales growth rate over the past three years reached 55.8%. The cumulative operating profit for the third quarter of this year was 43.1 billion KRW, achieving an operating profit margin of 18.4%.

In January this year, TMC, together with POSCO, developed domestic production technology for neon (Ne) gas, a rare gas used in semiconductors, for the first time in Korea. Neon gas is an essential raw material for excimer laser gases required in the lithography process, which uses light to etch electronic circuits onto semiconductor silicon wafers. Neon gas, which exists in trace amounts (0.00182%) in the air, is produced 70% worldwide in Russia and Ukraine. It can be collected as a byproduct during steel smelting. TMC succeeded in domestic production through collaboration with POSCO.

Recently, due to international supply instability, prices of rare gases used in semiconductor processes such as krypton, xenon, and neon have surged sharply. The average price per ton of krypton rose from $2,925,400 last year to $8,975,300, nearly tripling. Neon prices jumped from $58,700 per ton to $1,687,000. Prices have risen steeply since the outbreak of the Russia-Ukraine war. Despite the sharp increase in raw material prices, TMC’s cost of sales ratio slightly decreased from 80% last year to 78% this year. TMC proposes delivery prices to customers each quarter reflecting raw material purchase prices. Since it supplies only the agreed quantities with customers, it can maintain a stable cost of sales ratio even when raw material prices surge.

CEO Yoo Won-yang, the largest shareholder, majored in chemical engineering at Kyungpook National University. After graduation, he worked in research and development (R&D) at Interflex, a printed circuit board (PCB) manufacturer. He gained 10 years of sales experience at Wonik Materials and Hana Materials, companies manufacturing semiconductor gases, before founding TMC. To advance TMC’s core technologies, he completed a master’s degree in chemical engineering at Kyungpook National University Graduate School of Science and Technology.

CEO Yoo said, "While working at a gas company, I saw that foreign companies monopolized the gas sector, which motivated me to produce special gases with domestic technology." He added, "Products made with domestic technology are prioritized for review by customers. In recent years, as a wave of localization has swept semiconductor manufacturing sites, TMC’s products, which have achieved ‘true localization,’ have attracted attention."

Enhancing Semiconductor Production Stability through Localization of Special Gases

TMC enhances its customers’ production stability through localization, conducting all processes domestically from raw material procurement to production and quality assurance. Experiences such as Japan’s export restrictions, trade disputes between the U.S. and China, the Russia-Ukraine war, and logistics crises caused by COVID-19 have revealed risks in relying on overseas supply chains. This is why TMC’s localization efforts have recently gained recognition.

CEO Yoo emphasized, "TMC’s strength lies in forming a task force team (TFT) comprising production, process, quality, and marketing departments to swiftly secure products that enable ‘true localization.’"

TMC plans to use funds raised through the IPO to build manufacturing facilities for carbon-based special gases (COS, CO, CHF3) required in semiconductor etching processes. It has secured purification source technology capable of producing products with purity above 3N from low-purity COS raw materials for semiconductor processes. Once the manufacturing facilities are fully operational, sales volume is expected to increase by 40% compared to current levels. The public offering funds will also be used to secure the necessary raw material quantities for expansion. The company plans to maintain an appropriate level of inventory in advance to ensure smooth production even during temporary supply disruptions.

TMC is offering 2.2 million new shares for the IPO. The expected price range is 32,000 to 38,000 KRW per share, aiming to raise at least 70.4 billion KRW. Demand forecasting for institutional investors will be conducted from January 4 to 5 next year, and the offering price will be finalized. Hanwha Investment & Securities, the lead underwriter, selected five comparable companies?Wonik Materials, DNF, Duksan Tecopia, Lake Materials, and ENF Technology?to estimate TMC’s fair corporate value. Using an average price-to-earnings ratio (PER) of 10.99 times, they annualized TMC’s cumulative net profit through the third quarter of this year for valuation.

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