Struggling Petrochemical Firms Hit the Investment Button on Semiconductor Materials Amid Boom

LG Chem to Double Electronic Materials Business
Lotte to Build New Semiconductor Developer Plant
OCI Expands Production of High-Purity Phosphoric Acid and More

As the AI semiconductor and high-bandwidth memory (HBM) markets experience rapid growth, the petrochemical industry is turning its attention to semiconductor materials. With the prolonged slump in demand for general-purpose petrochemical products, companies are seeking new opportunities in high-value materials used in semiconductor manufacturing processes.

According to the petrochemical industry on July 10, major chemical companies are investing in and expanding their presence across the entire semiconductor value chain. This includes advanced packaging materials, process chemicals, and ultrapure materials. These sectors are characterized by high technological barriers and profitability that significantly surpasses that of general-purpose products.

LG Chem is the most aggressively scaling up its operations. The company has set a target to double its electronic materials business from its current size of 1 trillion won to 2 trillion won by 2030. As the spread of AI and high-performance computing (HPC) increases the importance of advanced packaging materials, LG Chem is strengthening its competitiveness in key materials such as copper-clad laminate (CCL), die attach film (DAF), and photo-imageable dielectric (PID). Recently, it began mass-supplying semiconductor strippers to the U.S. semiconductor packaging company Amkor, expanding its footprint in process materials. Strippers are used to remove photoresist and residues from substrates after circuit formation, and their importance grows as microfabrication processes become more sophisticated. LG Chem plans to invest 15 trillion won in research and development (R&D) by 2035, with about 70% of that investment focused on future businesses such as semiconductor, mobility, and robotics materials.

While LG Chem is focusing on packaging materials, the Lotte Chemical Group and OCI are betting on expanding production of chemical materials directly used in semiconductor processes. Last month, Lotte Chemical Group affiliate Hanwha Chemical held a groundbreaking ceremony for a semiconductor and display developer (TMAH) production plant in the Poseung District of Pyeongtaek, Gyeonggi Province. The group plans to invest a total of 130 billion won and gradually expand the production line in line with customer expansion schedules. By establishing dual production bases in Ulsan and Pyeongtaek, Lotte will improve supply stability and enhance its competitiveness through a vertically integrated system, from Lotte Fine Chemical's basic material TMAC to Hanwha Chemical's final product TMAH.

OCI is increasing its production capacity across a wide range of process materials, including cleaning and etching. Within the third quarter of this year, the company plans to expand its annual production capacity of high-purity phosphoric acid for semiconductors from 25,000 tons to 30,000 tons. High-purity phosphoric acid is a key material used in wafer cleaning and etching processes and is supplied to companies such as Samsung Electronics and SK hynix. OCI also plans to increase the utilization rate of its hydrogen peroxide production facilities—currently producing about 125,000 tons annually at its Iksan and Gwangyang plants—from around 70% to 90% in the second half of the year, in response to rising demand for wafer cleaning. The company is also strengthening its semiconductor polysilicon business, a core raw material for wafers. Last year, OCI began construction of a joint plant with Japan's Tokuyama in Malaysia and plans to establish an annual production system of 8,000 tons starting in 2029.

It is not only chemical materials that are entering semiconductor plants. Samyang Group is fostering ultrapure water materials—essential for semiconductor manufacturing—as a future growth engine. The uniform particle ion exchange resin produced by its Water Solutions division is a high-value material used in the production of ultrapure water for semiconductors and displays. With more uniform particle sizes than general ion exchange resins, it is well-suited for ultrapure water production. According to the company, this business has grown by more than 10% annually in recent years, with its revenue share increasing both last year and this year. Demand is rising not only for ultrapure water for semiconductors but also in other industries such as chromatography and nuclear power.

An industry insider said, "With the spread of AI semiconductors, demand for materials used throughout the semiconductor process—including advanced packaging and ultrapure water—continues to grow. High-value materials that require technological expertise are more profitable than general petrochemical products, so major chemical companies are fostering these as future growth businesses."

This content was produced with the assistance of AI translation services.