Hwang Cheol-ju, Chairman of Jusung Engineering, "Tens of Trillions in Large Corporations' US Investments Could Backfire as Oversupply"

Oversupply → Price Drop Vicious Cycle... Trade Uncertainty Adds to Challenges
Managing Business '4 Times' Harder Than Before US-China Conflict
Lack of Detail in SoBuJang Policy... Prioritize Equipment Companies
Offer Astronomical Compensation to Top Technicians to Develop 'Son Heung-min'

Hwang Cheol-ju, chairman of Jusung Engineering who has worked in the semiconductor industry for 31 years, expressed concerns about the massive investments made by major domestic semiconductor companies in the United States. Samsung Electronics, SK Hynix, and other semiconductor giants are investing tens of trillions of won in the U.S., but he criticized this behavior as abnormal. If companies rush to invest, an oversupply boomerang could occur, which would not be positive for the management of domestic semiconductor material, parts, and equipment companies that form the foundation of the industry.

In an interview with Asia Economy on the 24th at Jusung’s R&D center in Yongin, Gyeonggi Province, Chairman Hwang said, "If investments increase, product oversupply will inevitably lead to price drops," and pointed out, "Companies continuing to invest huge amounts in the U.S. is a 'forced-fit investment' that does not follow market logic." He raised his voice, saying, "If such investment trends continue, oversupply will occur, making the semiconductor market even more difficult."

Hwang Cheol-ju, Chairman of Jusung Engineering, is giving an interview at Jusung Engineering Yongin R&D Center in Gyeonggi on the 24th. Photo by Kang Jin-hyung aymsdream@

Chairman Hwang is considered a veteran in the domestic semiconductor industry. He founded Jusung Engineering in 1993. Jusung Engineering supplies semiconductor manufacturing equipment such as Atomic Layer Deposition (ALD) equipment and Chemical Vapor Deposition (CVD) equipment. The ALD equipment is being promoted for delivery to memory companies and foundry (semiconductor contract manufacturing) firms. As of the 25th, the company’s market capitalization is 1.6622 trillion won, and its sales this year are expected to reach 432 billion won (estimated by KB Securities).

Chairman Hwang expressed concerns not only about the industry situation but also about geopolitical risks such as the U.S.-China conflict. Although Jusung Engineering’s main domestic client is SK Hynix, which also conducts business in China, he viewed the China business itself as becoming uncertain.

Chairman Hwang predicted that regardless of who wins the U.S. presidential election in November, U.S. sanctions against China will continue. He said that since the Trump administration began its China containment, the business environment has worsened fourfold. The number of countries where raw materials can be purchased most cheaply, such as China and Southeast Asia, has halved, making it "twice as difficult," and the number of countries where products can be sold at the highest prices, including China, has also halved, making it "twice as hard," resulting in a total of "four times" more difficulty.

Chairman Hwang said, "The U.S. has asked its allies to join in sanctions against China but has not told companies to give up their China business," but added, "The demands to join or to quit the China business are similar messages, and the uncertain situation continues where companies cannot even make plans because they do not know when their China business might be blocked." He continued, "The most frustrating, fearful, and difficult thing is that due to U.S.-China conflicts, companies cannot make future plans because they do not know when their China business will be blocked," and emphasized, "I hope the government will buy as much time as possible so that companies can devise clear alternatives."

Gyeonggi Juseong Engineering Yongin R&D Center. Photo by Jinhyung Kang aymsdream@

Chairman Hwang also criticized the government’s plan to establish a small and medium-sized materials, parts, and equipment (SoBuJang) cluster in Gyeonggi Province, saying it lacks detail. He said it is unclear which field among the SoBuJang companies will be supported first. He identified the equipment sector as the field with the potential to become the world’s best in the domestic semiconductor-related industry. He viewed material companies as struggling to secure raw materials and parts companies as vulnerable to global standardization variables.

He described the world’s best company as an "Only One," referring to the Dutch company ASML, which manufactures extreme ultraviolet (EUV) lithography equipment. He meant that nurturing companies that dominate the semiconductor industry’s gateway, like ASML, known as the "super Eul (乙)," is of utmost importance.

Chairman Hwang said, "The localization rate of materials, parts, and equipment in the Korean semiconductor industry is less than 20%," and added, "When the government formulates support policies for SoBuJang, it should focus on creating 'global Only One' equipment companies like the 'super Eul' Dutch ASML that makes EUV lithography equipment."

Chairman Hwang advised that both nurturing new talent and retaining existing personnel must be done well to prevent brain drain. He especially emphasized that new talent development policies should not rely excessively on schools. Schools cultivate intellectuals, while companies cultivate technicians, and what companies need now are technicians.

Chairman Hwang said, "Core talents developed by companies should be registered in a 'core talent pool' created through consultation among individuals, companies, and the government, and outstanding personnel should be treated with astronomical salaries like professional baseball or soccer players," adding, "If this is not done, it will be impossible to nurture world-class Only One players like Son Heung-min."