Applied Materials Inc., a prominent global supplier of semiconductor equipment and software, has invested 51 billion won ($40.2 million) in Absolics Inc., a subsidiary of South Korean chemical materials firm SKC Co. SKC, a unit of SK Group, the second-largest conglomerate in Korea, announced on December 26, 2022, that it will raise 165.9 billion won through a rights offering to fund the construction of Absolics' facility in the United States.
As part of the transaction, Absolics issued 130,000 new shares. SKC acquired 90,000 shares for 114.8 billion won, and Applied Materials purchased 40,000 shares for 51 billion won. The transaction took place on December 28, according to SKC.
Absolics intends to utilize the proceeds to establish semiconductor glass substrate manufacturing plants in Covington, Georgia. The company embarked on constructing these facilities in November of the previous year.
A glass substrate is a thin layer of glass on which processing and memory chips can be mounted to create the central part of a computing system. These substrates reduce the space required for a multi-chip package, enabling more chips to be packed into a single device, enhancing the performance and energy efficiency of chipsets.
The US company plans to construct the facilities in two stages. The first phase, scheduled for completion by the end of 2023, involves a $240 million investment to construct a manufacturing plant with a floor area of 120 million square meters. Initially, Absolics will focus on small-volume manufacturing and commence mass production at the plant in the second quarter of 2024.
The second phase is anticipated to be a further investment of $360 million for high-volume manufacturing. Absolics aims to complete the second phase within the next three to five years.
Applied Materials' injection of funds into Absolics is expected to strengthen the ties between the semiconductor industries of Korea and the United States.
In May 2022, during a visit to Korea, Gary Dickerson, the President of Applied Materials, held discussions with Chey Tae-won, the Chairman of SK Group, and Jay Y. Lee, the Chairman of Samsung Electronics, regarding partnerships in chipmaking.
Last July, the US equipment supplier signed a memorandum of understanding with the Korean government to establish a research and development center for next-generation semiconductor equipment in Gyeonggi Province, Korea. Further details about the facility were not disclosed at that time.
SKC recently sold its industrial film unit to Korean private equity firm Hahn & Co. for 1.6 trillion won, as the company accelerates the expansion of its semiconductor and battery materials businesses.
If Absolics secures additional clients for its glass substrates, it will become SKC's second-largest business, following copper foil manufacturing, according to a report by NH Investment & Securities Co. analyst Ju Min-woo in October.
