Lake Materials to enter KOSDAQ

Lake Materials, a chemical material company, will go public on the KOSDAQ in March. The goal is to grow continuously by increasing the proportion of the semiconductor business, a new growth engine.

Kim Jin-dong, CEO of Lake Materials, predicted at a press conference held in Yeouido, Seoul on the 17th that “the proportion of the semiconductor business in this year’s sales will exceed 30% and the LED business will decrease to 40%.” It is explained that the company is strengthening the company’s stability by reducing its dependence on the cash cowin light emitting diode (LED) business and increasing the proportion of the semiconductor field.

Lake Materials’ core technologies are organometallic compound design and TMA (Trimethyl Aluminum) manufacturing technology. Based on TMA technology, it produces LEDs, semiconductors, solar electronic materials, and petrochemical catalysts. There are four companies in the world with TMA technology, including Lake Materials. US Grace, Akzo Nobel and German Lanxes. Among the four companies, Lake Materials is the only one that operates all of the LED, semiconductor, display, solar, and catalyst businesses. This is the background that CEO Kim Jin-dong emphasized that “building a portfolio is the biggest advantage in terms of business.”

The semiconductor material business is expected to benefit from the localization of materials that began last year. Lake Materials’ semiconductor business supplies chemical vapor deposition (CVD) and atomic layer deposition (ALD) precursors used for high-k thin films and diffusion barriers, and special gases for semiconductors. Last year, the number of customers increased. CEO Kim said, “It takes time for the material to develop horizontally in the customer’s production line.” Customers in the semiconductor business include Samsung Electronics, Kioxia, and TSMC. TSMC tends to be reluctant with Korean companies but there is a branch of Lake Materials in Taiwan.

Other business units also deal with major domestic and foreign companies. The LED business produces precursors for LEDs, which are the core material of the epi layer that generates the light of LED lighting. They have the biggest market share in the world. Customers include Samsung Electronics, Epistar, and Seoul Semiconductor. LG Chem in the catalyst field and Hanwha Q Cells in the solar power business are another big names among customers. The photovoltaic field supplies materials that prevent the decline in panel conversion efficiency. It supplies to all of the top 20 global companies.

As of last year, the proportion by business was 45% for LEDs, 29% for semiconductors, 18% for solar power, and 6% for catalysts. Others are the remaining 2%. LED is a company cash cow along with solar power. Semiconductors and catalysts are new growth engines for the next three to five years.

Founded in 2010, Lake Materials’ headquarters are in Sejong. In 2018, sales were 35.2 billion won and operating profit was 3.5 billion won. Lake Materials is scheduled to merge with Dongbu Spec 5. The merger approval agenda will be dealt with at the extraordinary general shareholders’ meeting on the 30th of this month. The scheduled listing date of the merged new stock is March 23rd.

RR