Lack of carbonic acid that has become an issue due to the COVID-19 pandemic is affecting South Korea’s semiconductor industry that is an important industry for the country. Due to an emergency to supply of carbonic acid that is used during semiconductor fabrication process, inner circles of Samsung Electronics and SK Hynix are concerned about a possible setback to their semiconductor production. While the industry is still fighting hard to combat the trade restriction imposed by the Japanese Government last year, it is now feeling uncertain about supply of carbonic acid.
According to the industry on Monday, there have been serious signs that point to lack of supply of carbonic acid. Carbonic acid price has shot up due to strong demands but lack of supply. It increased between 20 and 30% just in the second half and there is a chance that it may go up 50% next year. Although the industry has no choice but to pay the asking price, there is a chance that it may not even obtain desired amount even if it pays the asking price. One industry official said that the industry is able to barely obtain half of its orders.
Carbonic acid is used during “cleaning process” that removes unnecessary residue that forms when circuits of semiconductor wafer are trimmed. It has many uses as its liquid form is used during cleaning process while it can also be used during photolithography process to improve resolution.
However, reduced supply of carbonic acid has started to cause issues. Carbonic acid is formed as a byproduct when petrochemical companies manufacture plastic products or when oil refinery companies purify crude oil. However, operation rate of petrochemical plants has dropped this year due to the COVID-19 pandemic.
The issue has become more serious when there was a fire at a plant early this year. Back in March, operation of Lotte Chemical’s plant in Daesan stopped due to an explosion. Supply of carbonic acid became much lower when LG Chem recently repaired equipment at its Naju plant.
Because many other industries such as the distribution industry that is seeing high demands for dry ice, which is solid carbonic acid, due to an increase in contactless economic activities are also asking for carbonic acid, the phenomenon is also having an effect on the semiconductor industry.
“Because we are in an urgent situation, we are focusing on stabilizing supply chain and not being hampered by high carbonic acid price.” said one official from a semiconductor material maker.
The industry is very important to the national economy. Semiconductor was responsible for 17% of the entire exports in 2019. Despite the pandemic, the semiconductor industry is still trending upwards due to increase in contactless economic activities and demands for data center.
Although the market’s forecast is bright for 2021, lack of carbonic acid supply is a concern for the industry. When asked about lack of supply of carbonic acid, Samsung Electronics said that it cannot confirm any detail regarding the status of supply of raw materials.
Many predict that this uncertainty will continue until next year. Although Lotte Chemical plans to resume operation of its plant in Daesan by the end of this year, this uncertainty will likely stay for a while due to a struggle by the petrochemical industry and strong demands for carbonic acid.
Carbonic acid that is used for semiconductor fabrication process is used after carbon dioxide that forms from petrochemical process is collected and purified. Raw carbonic acid is made from companies like LG Chem, Lotte Chemical, and Hyundai Oilbank, and companies like Taekyung Chemical, Hanyu Chemical, Deokyang, and Yujin Chemical liquefy carbonic acid and supply liquid carbonic acid to semiconductor manufacturers such as Samsung Electronics and SK Hynix. SK Materials acquired 80% of Hanyu Chemical’s shares last year due to importance of semiconductor materials.
Staff Reporter Yun, Geonil | firstname.lastname@example.org & Staff Reporter Kang, Hyeryung | email@example.com