[IPO] LK Chem "Leap to Global Company with Korea's First Semiconductor Material Mass Production Experience"

World's First Commercial Production of PCP Ligands, Korea's First Mass Production of DIS Precursors
Pursuing Localization of Hafnium Precursors and Development of Perovskite Materials

CEO Chang-Yeop Lee of LK Chem held a press conference on the 6th in Yeouido, Seoul, attended by key executives. Photo by LK Chem

"LK Chem will leap forward as a global integrated precision chemical advanced materials company through technological advancement for expanding existing and downstream businesses."

On the 6th, Lee Chang-yeop, CEO of LK Chem, the leading domestic company specializing in mass production of semiconductor precursor materials, held a press briefing in Yeouido, Seoul, attended by key executives. At this briefing, the company revealed its core competitiveness and future growth strategies for listing on the KOSDAQ market.

Established in November 2007, LK Chem specializes in developing and manufacturing chemical materials, specifically ligands and precursors used in atomic layer deposition (ALD) processes, which are part of thin film deposition processes in the semiconductor industry.

Thin film deposition is a core process that coats wafers with desired molecules or atoms in extremely thin layers to impart electrical properties. In particular, the ALD process is an advanced technology that forms uniform thin films at the atomic layer level and is essential in ultra-fine semiconductor processes. Recently, as energy efficiency has become emphasized in ultra-fine processes, major global foundry companies such as Samsung, Intel, and TSMC are focusing on establishing 2nm node processes. For implementing these processes, ultra-high purity precision deposition materials are not optional but essential.

The company succeeded in the world's first commercial production of PCP ligands and also achieved the first domestic mass production of DIS precursors, proving its technological superiority in the global market. These achievements stem from a research system that systematically manages the entire process from early-stage R&D to commercialization. The company’s research organization, composed of 77% master's and doctoral-level experts, strengthens its capabilities in high-purity refining technology and customized material development, enhancing market competitiveness.

Additionally, the company has achieved a short development cycle averaging 16.6 months from preliminary technical review to commercial product launch, verifying technical reliability early to minimize issues. Based on the stability of new products secured at the laboratory level, it quickly establishes commercial production facilities and processes, providing a stable supply chain to major global customers and further strengthening competitiveness.

With proprietary process patents and ultra-high purity refining technology, the company has secured differentiated competitiveness in the semiconductor deposition materials market. Through this, it has built a unique product lineup and further enhanced profitability. As a result, as of the third quarter of 2024, the company recorded sales of 19.8 billion KRW, achieving a high growth rate of 94.5% compared to the same period last year. Operating profit was 8.9 billion KRW, up 104.4% year-on-year, demonstrating both profitability and growth.

Leveraging its core competitiveness, the company is seeking sales diversification and higher growth through ▲strengthening competitiveness of existing product portfolios ▲introducing new precursor product groups ▲expanding downstream industries.

First, while maintaining stable market shares of CP and PCP ligands, the company plans to accelerate sales growth by expanding its product lineup to include precursors with high added value materials such as cobalt, molybdenum, and yttrium. To realize this, it is currently building facilities for mass production at its second plant located in Cheonan, Chungnam, aiming for full-scale mass production and sales in 2025. Furthermore, to respond to diversified demand growth due to the expansion of the global DIS precursor market, it is strengthening production capacity and pursuing new certifications and sales channels to further expand its global market presence.

Alongside this, the company is expanding its product portfolio by localizing the hafnium precursor (CP-Hf) in line with the expiration of the patent held by Japan’s TCLC, which owns the original material patent. The company is working with major global companies to localize the entire process for mass production of HfCl4, the raw material for hafnium precursors, and plans to supply zirconia (ZrO₂), a byproduct generated during production, to various demand sectors including secondary battery manufacturers. This will generate additional revenue while achieving cost reduction.

Beyond strengthening existing business capabilities, the company is also pursuing the development of perovskite materials as a new business, aiming to secure competitiveness in next-generation solar and space solar markets. To this end, it is collaborating with major domestic and international research institutes and companies to develop dry deposition methods and establish mass production processes, solidifying technological superiority through intellectual property acquisition and new material registration.

Based on its advanced perovskite material development capabilities, the company has also signed an investment contract with space solar cell company Flexcelspace. Through this contract, the company secured exclusive supply rights for perovskite and HTM/ETM materials to Flexcelspace, as well as the highest priority negotiation rights for newly developed materials. Through various project initiatives, the company plans to accelerate its entry into the global solar and space solar markets and become a provider of sustainable energy solutions.

The company plans to use the funds raised from this KOSDAQ IPO to build production facilities for precision organic chemical materials and high-purity chemical materials. It is also pursuing various investments to strengthen production capabilities, including expanding synthesis and refining facilities. Through this, it aims to further expand its position in the core semiconductor materials market and enhance its global competitiveness.

Lee Chang-yeop, CEO of LK Chem, stated, "As the leading domestic company specializing in mass production of semiconductor precursor materials, we focus on proactively reading market demand. Through innovative new material development and scale-up capability enhancement, we will contribute to the sustainable growth of the global precision chemical advanced materials market."

Meanwhile, LK Chem plans to offer 1 million shares in this IPO. The expected offering price is between 18,000 and 21,000 KRW per share, with a total offering amount of 18 to 21 billion KRW. Demand forecasting will be conducted over five days until the 10th, followed by general subscription on the 13th and 14th, aiming for a KOSDAQ listing within February. Shin Young Securities is the lead underwriter.