[News Inside Companies] KLA, the Company Catching Semiconductor 'Defects', Gains Attention in US-China Tech Dispute

KLA, a US semiconductor equipment company’s flagship equipment, 'Surfscan'. It serves the role of inspecting whether a wafer is defective. / Photo by KLA Official Website Capture

The American company 'KLA,' which attracted attention due to reports of halting supplies to semiconductor factories in China, is known as the "defect-catching company." The semiconductor manufacturing process inherently carries the risk of producing many defective products. Therefore, the primary concern for all semiconductor companies is defect rate control and yield management. This is where KLA's technological competitiveness lies.

Rising to Top 5 in Equipment Industry through Precision Semiconductor Defect Inspection and Measurement

KLA originated from 'KLA Instruments,' a semiconductor defect inspection equipment manufacturer established in California, USA, in 1975. In 1997, KLA acquired 'Tencor Instruments,' a company specializing in semiconductor measurement equipment, and later changed its name to 'KLA Corporation,' which continues to this day.

KLA has grown focusing on two areas: semiconductor inspection and measurement. Especially, KLA, specialized in manufacturing equipment that inspects and detects defects early, and Tencor, with expertise in precisely measuring wafer thickness and contamination levels (wafers being thin silicon sheets used as raw materials for semiconductor substrates), created a synergy effect that became the driving force behind the current KLA. As of last year, KLA recorded $6.9 billion in sales and $2 billion in operating profit, establishing itself as one of the top five global semiconductor equipment companies.

Essential for Reducing Semiconductor Defects and Increasing Production

KLA's core business is called 'semiconductor process control.' This includes various inspection equipment, measurement devices, data analysis software, and related services.

Among these, KLA's representative product is the defect inspection system called 'Surfscan.' It is a device that precisely measures scratches and contamination levels on the wafer surface, which forms the semiconductor substrate, to filter out defective products in advance.

Light passing through the reticle mask is reduced by the lens and engraved onto the wafer. / Photo by Intel, captured from YouTube video

KLA's technology also plays a crucial role in reticle inspection work. A reticle is a glass mask that serves as a kind of "template" before actually engraving semiconductor circuits onto the wafer. Light is projected onto the reticle to cast the circuit pattern, which then passes through a reduction lens and is engraved onto the wafer, thereby creating the semiconductor circuit.

If even the slightest defect occurs in the reticle serving as the template, it means all semiconductors become defective products. Therefore, the reticle must be manufactured with absolute precision. KLA's reticle quality control device, 'Teron,' can detect defects in reticles used for 5 to 7 nm process nodes in real time.

According to market research firm 'Information Networks,' KLA held a 62.6% market share in semiconductor inspection and measurement equipment as of last year, leading overwhelmingly among the top six companies. When limited to semiconductor process control equipment, the market share rises to 85%.

'Second Largest Player' China Export Restrictions... Impact on Korean Semiconductor Companies

According to foreign media reports, KLA is said to have stopped delivering equipment to customers based in China starting from the 12th (local time). This follows export control measures on semiconductor equipment to China announced by the U.S. Department of Commerce on the 7th. Specifically, it targets production facilities for NAND memory chips with 128 layers or more and DRAM semiconductors of 18 nm or less.

Samsung Electronics Xi'an Memory Semiconductor Factory in China / Photo by Yonhap News

The export restrictions are expected to have a significant impact on both KLA and semiconductor companies operating in China. Although KLA is an American company, about 89% of its total revenue comes from exports. The Chinese market accounted for 25% of KLA's global sales last year, making it the second-largest market.

Korean companies with memory semiconductor factories in China may also face difficulties due to the export restrictions. Samsung operates a NAND factory in Xi'an, China, and SK Hynix has a DRAM factory in Wuxi, Jiangsu Province. Both companies are pursuing plans to expand or upgrade their factories, requiring new imports of KLA equipment.

Currently, the U.S. Department of Commerce plans to require case-by-case approval for imports of American-made equipment by foreign subsidiaries with factories established in China. Although imports are not completely banned, this creates a non-tariff barrier that burdens companies. However, Samsung and SK Hynix's Chinese factories have been granted a one-year grace period during which they can import equipment without case-by-case approval. After this period expires, close cooperation between each company and the U.S. government is expected to be necessary.