According to sources, South Korean semiconductor materials firms are anticipated to experience a decline in supply for the rest of the year due to decreased NAND production output by memory chip manufacturers. These companies have reportedly reduced their material supply by over 50% for NAND production compared to the previous year. This reduction can be directly attributed to Samsung and SK Hynix's decision to lower their NAND production output. Several chemicals used in NAND production, such as C3H2F6, C4F6, WF6, photoresist, and highly selective phosphoric acid, are expected to be affected by this supply decline.
C3H2F6 and C4F6 gases are crucial for chip etching, particularly for advanced NAND chips. Foosung, a chemical firm, recently announced the suspension of its C3H2F6 factory operations starting from Monday due to inventory adjustments and output reductions by chip customers. Moreover, Foosung also produces C4F6 and deposition gas WF6. Additionally, TMC and SK Showa Denko produce C4F6, and SK Materials produces WF6.
Domestic chip chemical firms rarely halt their factories since chip companies seldom suspend operations. However, with the reduction in NAND output by Samsung and SK Hynix, the production of photoresist and phosphoric acid is also expected to decrease. Dongjin Semichem, the exclusive supplier of photoresist for 3D NAND to Samsung, is anticipated to face a substantial decline in revenue. The chemical company had recorded 200 billion won in revenue from photoresist sales. Similarly, Soulbrain, which supplies phosphoric acid for 3D NAND production, experienced a 19.8% drop in revenue in the second quarter.
In addition to this, demand for NF3, which is utilized as a cleaner, is also diminishing. The sources mention that SK Materials, Hyosung, and Air Products are the suppliers of these chemicals. This reduction in demand further contributes to the overall decline in the semiconductor materials industry in South Korea.