[IPO Spotlight] Youngchang Chemical, Full-Scale Growth Next Year... EUV Rinse Mass Production 추진

Development of Rinse for Extreme Ultraviolet Photoresist... Industry's First Domestic Production Initiative
Estimated Net Profit for 2023 Applied to Corporate Valuation
Expecting Market Entry of Rinse for EUV Photoresist and Tungsten Slurry

[Asia Economy Reporter Hyungsoo Park] Chemical material manufacturer Yeongchang Chemical has launched its listing on the KOSDAQ market through the special exemption method for materials, parts, and equipment (SoBuJang).

According to the Financial Supervisory Service's electronic disclosure system on the 13th, Yeongchang Chemical will conduct a public offering of a total of 2.4 million shares, including 2 million newly issued shares and 400,000 existing shares. The desired price range per share is 15,000 to 18,600 KRW. The expected amount to be raised is approximately 44.6 billion KRW based on the upper limit of the desired price, and the expected market capitalization after listing is between 151.9 billion and 188.3 billion KRW. Hana Financial Investment is the lead underwriter for the listing.

Founded in 2001, Yeongchang Chemical is a developer of chemical materials supplied to the semiconductor, display, and eco-friendly energy industries. In 2004, it succeeded in mass-producing photoresist rinses for ArF (argon fluoride) and KrF (krypton fluoride) light sources. Its main products include photoresist (photosensitive solution), organic hard mask (HT-SOC), slurry, rinsing solution, developer, and stripper.

By successfully mass-producing photoresist materials for the semiconductor industry, the company contributed to the localization of these products. It began to attract attention in 2019 when Japan tightened export regulations. Photoresist is a liquid applied to semiconductor wafers during the photolithography (Photo) process, the first step in semiconductor manufacturing, where circuit patterns are printed using light.

Yeongchang Chemical has completed the development of a prototype for an extreme ultraviolet (EUV) lithography rinse. This is necessary for the EUV photolithography process used to form patterns smaller than 10nm. It is an important material for securing yield and expanding process margins by preventing pattern collapse, removing defects, and improving line width roughness (LWR) uniformity, which inevitably occur during the process. With the recent increase in EUV process usage, interest in materials that can improve productivity and reduce costs has grown. Yeongchang Chemical aims to start mass production in the second half of this year and achieve the industry's first localization.

The lead underwriter calculated the per-share valuation by applying the estimated net profit for 2023. It expects to achieve a net profit of 19.2 billion KRW next year. The company recorded a net loss of 800 million KRW last year but achieved a net profit of 1 billion KRW in the first quarter of this year. From 2015 to 2020, it maintained profitable operations, but last year it recorded a net loss due to rising raw material costs, derivative valuation losses from previously issued convertible redeemable preferred shares, and impairment losses on development costs. However, it returned to profitability in the first quarter of this year due to price increases.

The reason for valuing the company based on the estimated net profit for next year is explained as the stable growth of the existing semiconductor process material product line and the expected full-scale sales of new products such as the EUV photoresist rinse and tungsten slurry product lines. The EUV photoresist rinse technology is one of the technologies to prevent collapse and defects of photoresist patterns caused by the miniaturization of semiconductor circuit patterns to improve chip integration.

NICE Credit Information stated that the EUV photoresist rinse developed by Yeongchang Chemical can control pattern defects at lower concentrations compared to competitors' products, providing price competitiveness that is expected to facilitate market entry.

Yeongchang Chemical plans to spend 16 billion KRW of the raised funds on facility investments. It is focusing on the new design and improvement of resin, a core material of photoresist, and the mass production of EUV rinse. It also plans to continue investing in expanding existing production facilities and warehouses. The public offering funds will also be used for developing new and improved semiconductor materials, commercialization process development and optimization, and hiring new development personnel.