[Exclusive] SKC Rises as 'World's No.1 Material'... Pursues Joint Venture with UK Nexion and US AMAT (Comprehensive)

Discussion on Investment in Anode Materials and GaN Power Semiconductor Business Approved at Board Meeting
Plan to Establish JV with Nexion and Pursue Nasdaq Listing to Enter Anode Materials Market
JV with World No.1 AMAT Planned, Sales Target of 1.8 Trillion KRW by 2025

[Asia Economy Reporter Lee Seon-ae] SKC is joining hands with global companies to leap into the world's No.1 mobility materials company with a corporate value of 30 trillion KRW by 2025. To enter the secondary battery (battery) anode material market, it is pursuing a joint venture (JV) with UK-based silicon anode material manufacturer Nexcion, and to enter the GaN (gallium nitride) power semiconductor market, it is pushing forward a joint venture with US semiconductor equipment company Applied Materials (AMAT).

On the afternoon of the 29th, SKC plans to hold a board meeting to approve one of the two investment proposals for joint ventures with Nexcion and AMAT. An insider from SK Group said, "Ahead of the board meeting on the afternoon of the 29th, we discussed the two investment proposals," adding, "However, only one of the proposals will be handled at this meeting." The other proposal will be addressed at a later board meeting.

The company SKC is partnering with to enter the anode material market is Nexcion. Nexcion is a producer of silicon anode materials for next-generation lithium-ion batteries. It has secured technology that dramatically increases battery capacity by using silicon, which has more than ten times the lithium storage capacity compared to carbon-based materials.

Earlier, on the 24th, SKC held an 'SKC Investor Day' and announced, "We will enter new materials businesses such as cathode and anode materials for batteries and the world's first hyper-performance computing glass substrates, aiming to generate more than 80% of profits from mobility materials by 2025." To this end, the company presented a strategy to secure technology through cooperation with world-class companies and commercialize it to grow into a core business.

SKC plans to establish a joint venture with Nexcion and eventually list this company on the US Nasdaq market. An insider from SK Group said, "Once the investment proposal is finally approved, we will proceed with establishing the joint venture and ultimately pursue listing on the Nasdaq market." However, SKC's public relations office stated, "It is true that a board meeting is being held today, but we do not know the details of the investment proposals," and added, "We cannot confirm the facts regarding the joint venture with Nexcion."

SKC is also pursuing investment to establish a joint venture with AMAT to enter the GaN power semiconductor market. AMAT is the world's No.1 company in semiconductor equipment sales. Given AMAT's strong commitment to the GaN power semiconductor business, the interests of both companies align, leading to this cooperation. The joint venture share ratio is AMAT (equipment) 49% and SKC (materials) 51%.

SKC has a strong commitment to new materials businesses that can significantly improve the performance of secondary batteries, such as silicon anode materials and high-nickel cathode materials. The reason for focusing on GaN power semiconductors is that, due to the material's characteristics, it is heat-resistant and can withstand high voltages better than silicon semiconductors. Therefore, it is widely used in electric vehicle batteries, fast chargers, and 5G communication equipment. In particular, applying GaN power semiconductors to battery charge/discharge devices, which previously used silicon semiconductors, increases charging efficiency and, through equipment miniaturization, increases production per unit space. GaN power semiconductors can be applied not only to batteries but also to various fields such as LiDAR used in autonomous vehicles, wireless charging, data centers, and communications. SKC's joint venture with AMAT has a sales target of 1.8 trillion KRW and an EBITDA of 1 trillion KRW by 2025.

SKC also plans to collaborate with global companies to enter the cathode material market. Through its subsidiary SK Nexilis, which produces copper foil used in batteries, SKC aims to expand its business into cathode and anode materials to become a global materials company. The copper foil business, established as a new growth engine, plans to increase production capacity to a total of 250,000 tons through active overseas expansions: 50,000 tons in Malaysia, 100,000 tons in Europe, and 50,000 tons in the US. The goal is to become the overwhelming No.1 player with over 35% global market share. Accordingly, by 2025, SKC plans to grow its secondary battery materials business sales?including copper foil, anode, and cathode materials?from the current 400 billion KRW to 4 trillion KRW, a tenfold increase.

SKC is also aggressively driving its semiconductor materials business, one of the two pillars of mobility materials. It plans to actively expand into new high-tech products. In addition to CMP pads (used for wafer surface polishing) and blank masks (materials used to imprint circuit patterns on wafers) produced by its existing semiconductor materials division, SKC is preparing to launch a newly developed 'glass substrate for hyper-performance computing.' Using this glass substrate can reduce semiconductor package thickness and power consumption by more than half while significantly increasing data processing capacity. Since 2018, SKC has been developing this product with over 70 partner companies, has completed prototype certification from global semiconductor manufacturers, and is jointly commercializing it with global semiconductor equipment companies and major customers. Based on the world's first developed 'glass substrate for hyper-performance computing,' SKC plans to achieve sales exceeding 2 trillion KRW by 2025 in the semiconductor materials business.

SKC is also expanding its eco-friendly materials business, where it has strengths. Existing film and chemical businesses will be upgraded with an ESG focus. The chemical business will expand high-value-added PG and bio-polyols made with eco-friendly PO processes, and the film business will strengthen eco-friendly and advanced IT materials. To build a biodegradable new materials ecosystem, SKC is combining biodegradable material technologies such as PLA and PBAT with limestone Limex technology. The goal is to achieve sales of 3 trillion KRW by 2025.

SKC foresees that an investment of 5 trillion KRW will be necessary by 2025 to become a global materials company. The funding will be secured through strategic financing such as business joint ventures and policy finance, as well as expanding internal cash generation.