SK C&C began to make inroads into overseas semiconductor module markets worth KRW33 trillion in earnest. The company is expanding its existing business structure focused on IT service to the non-IT sector. It will withdraw from the module business based on low-priced semiconductors, and introduce high-priced premium semiconductor module products to the US market for the first time on January 25. It changed the name of Hong Kong-based ISD Technology, which it acquired and incorporated as a subsidiary last year to advance into overseas semiconductor module markets, to Essencore.

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<Noh Seong-soo, managing director of Essencore, explains KLEVV, a premium semiconductor module brand, at a press conference.>

SK C&C held a press conference on January 22, and introduced KLEVV, a high-priced premium semiconductor module brand in a bid to penetrate overseas semiconductor module markets on a full scale. As the key products of KLEVV, the company will develop and sell fingerprint recognition USBs (Universal Serial Bus) as well as memory modules for games. It will also develop and release micro SDs, SSDs (solid state drive) and graphic cards.

◇ Releasing memory modules for games and fingerprint recognition USBs

Essencore will release one DDR4 (double data rate) product, a memory module for games, and 3 DDR3 products with the KLEVV brand. These products are overclocked for an increased operating speed. They are targeting gaming PC makers and maniacs. The fingerprint recognition USB, scheduled to be released in March, is a 64GB flash drive, which contains not only the fingerprint recognition function, but also the 4 differentiated types of data security algorithms of Essencore. The fingerprint recognition USB is the first such product ever released in the world.

Essencore’s KLEVV brand product groups will be on display at ‘PAX South’ held in San Antonio, Texas, US from January 23 to January 25, and introduced to the US market for the first time. PAX South is one of the largest game shows in North America. They will be registered with the large online shopping malls in the US on January 25.

“To enhance the brand awareness of the company, one of the success factors in the global semiconductor module market, we launched the high-end brand KLEVV,” said Mr. Noh Seong-soo. “KLEVV will consist only of high-performance and high-speed products to which memory technologies and ICT are applied.”

Essencore is planning to have various semiconductor supply chains for KLEVV products. It receives semiconductors from various companies including Samsung Electronics, SK Hynix, Micron and Toshiba. Noh Seong-soo said, “As semiconductor supply and production need to be flexible, it is difficult to have a long-term contract with any specific manufacturer.”

◇ The overseas semiconductor module business is a new growth engine.

The overseas semiconductor module business turned a profit for the first time this year as a matter of fact. Last year when SK C&C acquired ISD Technology (Currently Essencore), the company was making preparations for the sale of mid-to low-priced semiconductor modules products and full-scale business. So the size of the profit was mediocre. An SK C&C insider said, “If last year was a period of preparing for the business, this year will be time for the semiconductor module business to create profits.”

Essencore is a subsidiary of SK C&C subsidiary, but is a Greater China business headquartered in Hong Kong. It is expected to generate some profits in China, Taiwan and Hong Kong, which account for a considerable part of the annual sales of KRW33 trillion. The company is forecast to release premium products at the beginning of the year and make some money in the US and Europe as well. “For starters, we will release our products to the online distributors of the US, and determine production quantities while watching market conditions,” said an SK C&C insider. “At present it is difficult to predict how big our sales will be this year.”

The overseas semiconductor module business is one of SK C&C’s new growth engines. As the local system integration (SI) market, which used to account for a considerable part of its sales in the past, worsened, industry experts expect that the overseas semiconductor module business will lead the growth of SK C&C as a non-IT business along with the SK Encar business.