[Interview] Merck Germany Senior Vice President: "Semiconductor Innovation Requires Global Cooperation"

Challenges in the HBM Market:
Securing New Technologies and Yield
"Globalization of Supply Chains Is Crucial for Semiconductor Advancement"

The Senior Vice President of a German semiconductor materials company collaborating with Samsung Electronics and SK Hynix emphasized the importance of the global supply chain and expressed concerns about protectionism. He noted that restrictions on cooperation between companies could also impact technological innovation.

Anand Nambiar, Senior Vice President and Chief Commercial Officer (CCO) of Merck Electronics, said in an interview with Asia Economy held on the 20th in Gangnam-gu, Seoul, "The semiconductor industry has made remarkable technological progress over the past 60 years thanks to the 'globalization of supply chains' that enabled cooperation based on necessity," adding, "I expect common sense." His remarks highlighted the importance of free trade and global supply chains.

Nambiar pointed out, "If supply chains are interconnected, we can quickly solve customers' problems through partnerships with companies that have the necessary technologies," and warned, "If certain countries are excluded in matters such as trade, costs will rise and efficiency will inevitably decline." He further cautioned, "If technological cooperation partnerships are blocked, innovation will be delayed, and ultimately, we will all pay higher costs."

As tariff barriers increase, companies must bear higher costs, which eventually affect consumers as well. Since the semiconductor industry has developed within an interdependent global network, unilateral actions by specific countries could have long-term adverse effects on the entire industry structure.

Anand Nambiar, Senior Vice President and Chief Commercial Officer (CCO) of Merck Electronics Division, is conducting an interview on the 20th in Gangnam-gu, Seoul. Photo by Merck

When asked about cooperation with Samsung Electronics, SK Hynix, and others to respond to the artificial intelligence (AI) market, he identified the 'technical difficulty' of enhancing high-bandwidth memory (HBM) specifications as a current challenge. He said, "As HBM integration density increases, perfect connections must be pursued during mass production stages, requiring new technologies such as hybrid bonding," adding, "To resolve yield issues and more, we maintain close partnerships with Samsung Electronics, SK Hynix, and others from the R&D phase through advanced packaging."

Hybrid bonding is an advanced packaging technology that simultaneously achieves mechanical bonding and electrical connections, increasing bandwidth while reducing power consumption. Among the currently supplied 5th generation HBM3E, SK Hynix is the only company preparing for 16-layer mass production. Samsung Electronics succeeded in developing 12 layers first in the industry last year but has faced difficulties supplying HBM3E to major clients like Nvidia due to low yields. The next-generation HBM4, expected to appear as early as the second half of this year, is also anticipated to require up to 16-layer stacking.

In the same context, Nambiar pointed to 'new material development' as a rising challenge in the AI era. He believes that achieving better performance while lowering power consumption will be a competitive advantage. He stated, "Over the past two years, AI servers have consumed up to 14 gigawatts (GW) of power," comparing it to "building 14 new nuclear power plants to consume that amount." He continued, "The human brain operates with only 20 watts yet is much faster and more efficient than the latest AI servers," emphasizing, "This is the path we must take."

Regarding the emergence of China's generative AI 'DeepSeek,' he evaluated it as "inspiring because it can achieve a lot with low specifications and low cost." He likened it to NASA spending $1 billion to train one astronaut, while the SpaceX project drastically reduced that cost to $50 million. Nambiar said, "If any type of technology can achieve more at a lower cost, it will open the door for more people to utilize AI technology."

Merck, with a 357-year history, began investing in Korea in 1989 and has promoted its core electronics business centered on semiconductors for 36 years. It provides all materials and substances necessary for manufacturing processes and has strengths particularly in materials used for semiconductor planarization, patterning, and thin-film processes.

Merck announced in 2021 that it would invest 3 billion euros globally, with 600 million euros allocated to Korea, indicating Korea as a key market. In 2022, it also acquired MK Chemical (formerly the chemical division of Mecaro), a semiconductor materials company collaborating with Samsung Electronics and SK Hynix.

He stated, "Korea's semiconductor competitiveness means competitiveness in the global market," expressing expectations for synergy effects with Korean materials, parts, and equipment companies (such as through the MK Chemical acquisition). He added, "There are many excellent tech leaders in Korea," and said, "We always keep the possibility of mergers and acquisitions (M&A) open."

Anand Nambiar, Senior Vice President and Chief Commercial Officer (CCO) of Merck Electronics Division, is explaining the semiconductor market outlook and Merck's business plans on the 20th in Gangnam-gu, Seoul. Photo by Merck