[BizLeader] "Targeting Secondary Battery and Semiconductor Markets with Desktop Electron Microscope"

Lee Junhee, CEO of Kosem
Expansion of Various Industrial Applications Due to Increase in Fine Processes
Securing Competitiveness Through 'Modularization'... Striving for New Technology Development

Lee Jun-hee, CEO of Kosem. / Photo by Jang Hyo-won

"As industries become more advanced, the demand for electron microscopes increases. The industrial market is now in its budding stage. Kosem will target the industrial market sectors such as secondary batteries, semiconductors, and bio industries with differentiated competitiveness against global conglomerates."

Lee Junhee, CEO of Kosem, revealed the company's vision in an interview with Asia Economy ahead of the company's KOSDAQ listing. Dr. Lee, who holds a Ph.D. in Electronic Engineering from KAIST, joined Kosem as head of the research institute in 2010 and has been leading the company as CEO since 2012.

Kosem is a company that manufactures scanning electron microscopes (SEM) for nano-scale fine material analysis. The company commercialized electron microscope-based technology developed by the Korea Research Institute of Standards and Science (KRISS) for domestic semiconductor equipment localization in 2007 after technology transfer.

The microscope market is broadly divided into optical microscopes, electron microscopes, and atomic microscopes. Optical microscopes are easy and simple to operate but have limitations in magnification and depth of field. Atomic microscopes offer ultra-high magnification but are slow and have a narrow observation area. Electron microscopes fall between these two types and hold the largest share in the microscope market.

As of last year, the global scanning electron microscope (SEM) market size was approximately 6.5 trillion KRW, accounting for 80% of the electron microscope market. An annual growth rate of 7.9% is expected going forward. Previously mainly used for basic scientific research, the electron microscope market is expanding as smaller processes and fine control become important across industries.

Kosem is expanding its market by developing tabletop SEM products targeting customers who primarily used high-spec electron microscopes. The company also holds numerous innovative products, such as integrated technology that combines EDS with SEM. EDS (Energy Dispersive Spectroscopy) is a microanalysis tool that detects fluorescent X-rays generated when observing samples attached to electron microscopes to analyze elements.

CEO Lee stated, "The electron microscope market has been dominated by global conglomerates, creating high entry barriers. However, since 2011, industrial use began, and Kosem targeted the industrial market by developing the world's first tabletop electron microscope with 100,000x magnification, which offers high convenience."

Kosem's technological capabilities have been recognized by the government as well. The company has received the New Excellent Technology (NET) certification three times for different technologies, which is rarely awarded. In the technology evaluation for this listing, Kosem received A grades from two separate institutions.

Particularly, Kosem's competitiveness lies in 'modularization.' While existing global conglomerates manufacture electron microscope equipment as a whole, Kosem developed modular products including columns and software that can be applied to other equipment. CEO Lee explained, "Demand for electron microscopes is increasing in numerous industries such as secondary batteries, MLCC, PCB, as well as displays and bio sectors. To respond to this, we chose a modularization strategy, which makes it easier to meet the specific requirements of each company."

Thanks to targeting the industrial market, Kosem has maintained profitability every year since 2012. In 2022, it recorded its highest performance with sales of 12.5 billion KRW and operating profit of 1.8 billion KRW. The operating profit margin jumped from the previous 3-4% range to 14%, due to operating leverage effects based on sales of 10 billion KRW.

After listing, Kosem plans to focus on developing new technologies. The company is developing an electron microscope that can be used at room temperature and atmospheric pressure. Currently, electron microscopes operate under vacuum conditions using electrons, but if it can be used without a vacuum, it would be an innovative product. Additionally, Kosem is developing products that apply artificial intelligence (AI) for automated analysis.

CEO Lee said, "In the past, all basic science-related equipment was imported from the U.S., Japan, Germany, and others. Basic science technologies, including electron microscopes, are essential for South Korea to enter the global top 5 in national competitiveness, so this sector will grow significantly in the future."

Meanwhile, Kosem is offering a total of 600,000 shares in its public offering. The size of the public offering funds is between 7.2 billion and 8.4 billion KRW. The funds will be used for research and development expenses and facility investments. In particular, Kosem plans to prioritize investment in R&D personnel, aiming to create an environment that attracts talented individuals interested in translating basic science technologies into products. The demand forecast will be conducted from January 29 to February 2, with general subscription from February 13 to 14. The listing is scheduled for February 23, and the lead underwriter is Kiwoom Securities.