[Report] From DP Equipment to Smart Factory... The Transformation of SFA

Business Diversification Since 2017
Smart Solution Sales Account for 71%
Asan Plant, Automation Outpost
Focusing on Secondary Batteries, Distribution, and Semiconductors
to Increase Market Share

Exterior view of the SFA workplace located in Asan, Chungnam.

[Asia Economy Reporter Donghyun Choi] On the 8th, I visited SFA’s factory in Asan, Chungnam. Upon entering the factory building, a robot taller than a person was busily stacking boxes on a pallet, moving them like an elephant uses its trunk. This robot is the ‘Mixed Robot Palletizer’ developed by SFA, which demonstrates a natural talent for stacking box blocks. For example, when an order comes in at a large logistics center for products with boxes of different shapes and sizes?such as 3 boxes of soda, 4 boxes of beer, and 2 boxes of bottled water?this robot first determines the stacking order through AI-based pre-simulation. Then, considering space efficiency and transport stability, it quickly stacks the boxes in the optimal way.

This robot is one of the smart factory technologies SFA possesses in the distribution sector. The company began full-scale commercialization last year by delivering to a large logistics center operated by a major domestic corporation in Icheon, Gyeonggi Province. Lee Haewon, head of SFA’s Business Planning Team, explained, "Existing robots stacked boxes of the same size, but the robot we developed optimizes stacking according to the changing ‘recipes’ each time."

SFA's 'Mixed Robot Palletizer' developed for smart factory automation in the distribution sector.

SFA Transforms from Display Equipment Manufacturer to Smart Factory Solution Provider

SFA was established in 1998 as a spin-off from the Samsung Aerospace Automation Division. Samsung Display holds a 10.15% stake, making it the second-largest shareholder. SFA has grown by supplying internal logistics equipment for Samsung Display’s fabs and display-related equipment to BOE, a Chinese LCD manufacturer. Last year, its sales reached 1.56 trillion KRW.

While continuing its business centered on display equipment, SFA began diversifying by investing in smart factory solution technology development from 2017. The company formed a ‘Smart Factory Core Technology Development Team’ by recruiting key internal engineers and external talent. Subsequently, it developed ‘intelligent solutions’ such as artificial intelligence (AI), big data analytics, and cyber-physical systems (CPS). Alongside this, it also developed ‘data optimization solutions’ including predictive maintenance (PdM), edge computers, and Internet of Things (IoT) sensors. Having secured core competencies for smart factory implementation, SFA launched its smart factory brand ‘NEO’ in 2020.

SFA has now transformed from a simple display equipment manufacturer into a smart factory solution provider supporting manufacturing and logistics automation in distribution, secondary batteries, semiconductors, and glass sectors. This shift is clearly reflected in its order performance. In 2016, display accounted for 86% of SFA’s orders, while secondary batteries, semiconductors, and distribution combined made up only 14%. However, last year’s orders were more evenly distributed: display 29%, secondary batteries 28%, semiconductors 18%, distribution and others 12%, and glass 13%. Non-display smart factory solution sales accounted for 71%, breaking away from a business structure heavily focused on display equipment.

Advanced Automation Outpost for IT High-Tech Industries

As global companies continue large-scale investments in advanced IT industries such as secondary batteries and semiconductors, SFA is focusing its core capabilities on increasing market share in these sectors.

Buildings 101 and 102 at the Asan factory serve as outposts for developing and testing smart factory solution equipment in these fields. Each building is actively demonstrating products for customer delivery after completing development of various smart factory solutions, ranging from storage of secondary battery raw materials and products to logistics, process equipment, and inspection and measurement devices.

Secondary battery visual inspection machine developed by SFA.

SFA’s equipment developed to enhance secondary battery quality and address explosion issues is the ‘AI Visual Inspection Machine.’ This device uses AI imaging technology to precisely scan the battery exterior for scratches or foreign substances. It is being advanced with the goal of completing inspection in 3.3 seconds per battery cell. The company secured orders worth 50 billion KRW last year alone. An SFA official emphasized, "When applied on-site at customer locations, it achieved a detection rate of over 95% and a zero miss rate. Introducing this equipment in places where battery exteriors are inspected visually could reduce manpower to a quarter of the current level."

The main product for internal secondary battery inspection is the ‘Inline 3D CT Inspection Machine.’ This equipment checks whether the anode and cathode inside the assembled secondary battery are properly aligned and whether there are any electrode bends or omissions. It enables full inspection rather than sampling. While global competitors like GE inspect one product per hour using sampling methods, SFA developed a system capable of inspecting one product every 4 seconds.

Secondary battery CT inspection device developed by SFA.

"Focusing Capabilities in the Order of Secondary Batteries, Distribution, and Semiconductors"

CEO Kim Youngmin (55) has been with SFA for over 10 years, achieving business diversification. He holds a degree in Materials Engineering from Yonsei University, a master’s in Inorganic Materials Engineering from KAIST, and an MBA from Columbia University. An engineer and Chief Financial Officer (CFO), he joined SFA in 2009 after working at POSCO, Bain & Company, and Citi Global Markets Securities, serving as CFO and CEO.

Kim expressed confidence that orders and sales in the secondary battery sector will explode in growth, citing the increasing number of large-scale investment plans announced by domestic and international conglomerates. He stated, "Overseas customers disappointed with the quality of Chinese products in secondary battery automation are recently turning to our company. Since we can provide turnkey mass production, clients do not have to deal with the hassle of sourcing different companies’ products for each manufacturing process."

Kim Young-min, CEO of SFA, is holding a press conference at the Asan factory in Chungnam on the 8th.

Kim also sees high growth potential in the distribution sector following secondary batteries. He said, "With the expansion of e-commerce due to COVID-19, demand for automation equipment in distribution and logistics centers is increasing. We expect double-digit annual growth over the next 6 to 8 years and plan to focus on equipment development in this field."

He forecasted a significant rise in order performance this year. "Although orders were placed at the end of last year, many contracts were delayed in signing, so a substantial portion will be reflected in this year’s results. Our order performance in the first half of this year will surpass the entire performance of last year," he said.