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Solid growth forecast for SK Materials on semiconductor boom

2017.09.07 15:02:14 | 2017.09.07 15:52:12
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Analysts are projecting a rosy outlook for SK Materials Co., a South Korean manufacturer of specialty gas used in semiconductors and display panels, as it could benefit from the explosive boom in the electronics component business and vertical integration of the chipmaking business centered on SK Hynix Inc.

SK Materials has its roots in Daebaek Mulsan, a company founded in 1982 with an aim to localize electronics materials. It was acquired by specialty gas producer OCI Materials in 2005 and came under SK Group last year.

SK Materials is the world’s largest producer of nitrogen trifluoride (NF3), a specialty gas essential in manufacturing semiconductors and displays. With an annual production capacity of 9,100 tons, it commands a 40 percent share in the global market. It is the first Korean firm to localize NF3 production and spends an average 4 billion won ($3.54 million) every year on research and development to obtain core technologies in the specialty gas field.

According to data provider FnGuide on Wednesday, market consensus for the Korean gas supplier’s operating profit this year is 166.4 billion won, up 7.9 percent from the previous year. Sales are projected to surge 18.1 percent on year to 544.9 billion won. Further growth is expected as major customers, including SK Hynix, Samsung Electronics Co., Samsung Display Co. and LG Display Co., all have plans to ramp up production. Performance of affiliates SK Tri Chem Co. and SK Showa Denko Co., which were set up as joint ventures last year, will also be reflected in the company’s bottom line from the second half.

SK Materials, on the assumption that the semiconductor boom will continue for the next five to 10 years, has been diversifying its business portfolio in the semiconductor materials sector with the recent acquisition of SK Airgas Inc. and the establishment of SK Tri Chem and SK Showa Denko.

The company’s prospects are bright given SK Group’s aggressive investment in semiconductors. The group has completed the vertical integration of semiconductor manufacturing with the purchase of silicon wafer supplier LG Siltron last month.

“Since the OCI takeover, SK Group has been building up its businesses in semiconductor and display,” said Nam Dae-jong, an analyst at KB Securities Co. “Now that it has a solid local clientele, it can broaden its scope and go global.”

The company has maintained a high operating margin of over 30 percent since 2015 and is likely to maintain this solid growth throughout next year, he added.

Shares of SK Materials closed Thursday up 3.21 percent at 183,200 won.

By Park Yun-gu

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]



  • Seoul Sun 24 June 2018
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