Merck has established a production line for semiconductor polishing materials in Korea. Mass production will begin as early as the first half of this year. Their goal is to produce local customized products through direct domestic production and shorten the delivery time to customers.
Merck Korea announced on the 14th that they have completed construction of a semiconductor chemical mechanical polishing (CMP) slurry production facility at their Pyeongtaek plant. CMP slurry is a key material used to planarize semiconductor wafers. The facility will be used for wafer polishing processes for semiconductor device companies such as Samsung Electronics and SK Hynix. Merck is also discussing mass production supply with major domestic customers. They areexpecting to run production of products as early as the first half of this year. Merck is investing in R&D on CMP slurry materials at the Korea Advanced Technology Center (K-ATeC), which opened in 2020, while simultaneously maximizing synergy by locally taking charge of production. While no specific production capacity has been confirmed, an official from Merck Korea said, "The existing CMP slurry was imported from overseas and supplied to Korea, but the delivery time can be shortened by up to half with direct local production." He further added, "We can quickly meet the physical properties that customers want by promoting material research in Korea." Merck predicted that the delivery period would be shortened by 20-50% depending on the product. Amid the semiconductor supply chain crisis, Merck hasapplied rapid supply capabilities as a differentiation strategy. Merck's localization strategy is a stepping stone to respond to the growth of the CMP slurry market. CMP slurry accounts for 70% of the CMP polishing process, which is significantly high. Demand for CMP slurry is expected to skyrocketsince Samsung Electronics and SK Hynix have both recently expanded their domestic semiconductor production capabilities. Samsung Electronics' Plant 3 in Pyeongtaek (P3) and SK Hynix's M16 plant in Icheon are emerging as representative clients.
Market competition is inevitable as Merck strengthenstheir CMP slurry supply chain. Dongjin Semichem and KCTech, major domestic CMP slurry suppliers, are also growing their business capabilities, and competition is expected between these companies. Dongjin Semichem plans to expand their current customer base with SK Hynix, and secure new customers such as Samsung Electronics. They expect their performance to stick out this year. KCTech is also entering the metal-based CMP slurry business that planarizes metal deposits. Since metal-based CMP slurriesis one of Dongjin Semichem's main areas, the two companies are expected to clash. Soulbrain is also developing a metal-based CMP slurry.
As CMP slurry companies change their strategies, market conditions are also expected to change. Cabot Corporation, headquartered in the U.S., accounted for nearly 60% of the CMP slurry market share until the early 2000s. However, their market dominance has fallen to the 30% range due to recent diversification. Hitachi and Fujifilm, as well as Versum Materials acquired by Merck, has since made great strides. This means that the oligopoly structure of the CMP slurry market is likely to weaken and new suppliers will emerge rapidly. In particular, Merck plans to invest 830 billion won in Korea by 2025 to expand its semiconductor and display material capabilities. <Glossary> CMP slurry= Semiconductor wafer polishing material. It is used to mechanically scrape the surface or cause a chemical reaction while rotating the CMP material between the wafer and the CMP pad in order to planarize the surface. According to market research firm Techcet, the global CMP slurry market is estimatedto bearound $1.3 billion (about 1.55 trillion won) as of 2020. The average annual growth rate is expected to be around 6.2%until 2024. By Staff Reporter Dong-joon Kwon (djkwon@etnews.com)
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