Korea's SK Inc. revs up power semiconductor value chains via M&As

SK Inc., the investment arm of South Korea’s second-largest conglomerate SK Group, is ramping up its value chain of third-generation semiconductor materials such as gallium nitride (GaN) and silicon carbide (SiC).

In April, the investment company raised its stake in Yes Powertechnix Co. to 95.8% for 120 billion won ($88.9 million). The investee firm, a local power semiconductor maker, is the only company that mass produces SiC in Korea. 

Power semiconductors are key parts for electric vehicles, electronics and 5G communication networks, used for current direction and power conversion.

SiC power semiconductors are in rising demand as they can withstand about 10 times the voltage that existing semiconductor models can resist, as well as heat in the hundreds of degrees. The holding company sees the global SiC market as a blue ocean with a high barrier to mass production of the material.

SK is also set to produce GaN power semiconductors as Yes Powertechnix signed a memorandum of understanding with RFHIC Corp. in September to found a joint venture.

RFHIC manufactures GaN power semiconductors, which feature higher energy efficiency and durability than existing semiconductor models and price competitiveness over SiC products.

GaN power semiconductors are essential for 5G base stations, sensors for autonomous driving, EV power supplies and high-speed chargers as the chips use lower voltage and are resistant to high-frequency currents.

SK started investing in power semiconductors two years ago in earnest, buying US industrial materials maker DuPont’s SiC wafer business for $450 in 2020 through SK Siltron.

Producing SiC wafers at Auburn, Michigan, SK Siltron is planning to provide the materials to Yes Powertechnix and the future JV for manufacturing power semiconductors. The silicon wafer arm will supply the chips to the conglomerate’s affiliates, such as EV charging arm SK Signet Inc., battery maker SK On, construction firm SK Ecoplant Co. and mobile carrier SK Telecom Co.

SK Siltron will quadruple its yearly SiC wafer production capacity by the end of this year as its new factory in Bay City, Michigan, kicked off operations in September. 

SK is planning to invest 1 trillion won in its power and compound semiconductor business by 2025 to expand the value chain for EV chips.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Jihyun Kim edited this article.