[Exclusive] OCI Chairman WooHyun Lee: "Korea-Japan Joint Venture in Malaysia Formed by Shared Sense of Crisis"

Collaboration on Advanced Materials with Tokuyama
First Korea-Japan Semiconductor Materials Joint Venture
"Japan is a competitor... but endless competition must be avoided"

"If Korea and Japan continue to compete endlessly in the chemical materials industry, we will ultimately end up destroying each other."

WooHyun Lee, Chairman of OCI Holdings, has emphasized the importance of Korea-Japan industrial cooperation. OCI recently established a Korea-Japan joint venture in Malaysia with Japanese chemical company Tokuyama. He explained that the sense of crisis facing both countries' industries could serve as a catalyst for collaboration. Chey Tae-won, Chairman of the Korea Chamber of Commerce and Industry, also diagnosed a crisis in Korea's manufacturing sector and suggested that "data sharing and joint development with Japan are necessary" as a solution. As a result, attention is focusing on whether the business communities of Korea and Japan will pursue comprehensive cooperation.

Photo of WooHyun Lee, Chairman of OCI Holdings. OCI Holdings

In a phone interview with Asia Economy on the 21st, Chairman Lee explained the background of the cooperation, saying, "Korea and Japan are competitors, but because we both sensed a crisis, we were able to join forces."

OCI Holdings and Tokuyama recently established a joint venture in Malaysia, OTSM (OCI Tokuyama Semiconductor Materials), to produce polysilicon, a key material for semiconductors. Chairman Lee highlighted the significance, saying, "This is the first time that Korean and Japanese companies have established a joint venture overseas, rather than in their own countries."

Chairman Lee's emphasis on Korea-Japan cooperation stems from the sense of crisis facing both countries' industries. While China is achieving not only cost competitiveness but also quality innovation based on its "Made in China 2025" strategy, Korea and Japan?once manufacturing powerhouses?have stagnated. The background for joining forces, with Lee warning that pursuing the chemical industry in their own countries would only lead to mutual destruction, lies here.

OTSM plans to invest a total of $435 million (about 600 billion won) to build a semiconductor-grade polysilicon production plant with an annual capacity of 8,000 tons in the Samalaju Industrial Park in Sarawak, Malaysia. The two companies will each hold a 50% stake.

The plant is scheduled for completion in the first half of 2027. After customer certification, full-scale mass production will begin in 2029. Lee stated, "After the plant is completed, we will conduct quality control for more than a year to stabilize the products."

Regarding the decision to establish the joint venture in Malaysia, Chairman Lee explained, "Electricity costs are low, and we can achieve RE100 (100% renewable energy) through 100% hydropower. This offers advantages in both production cost reduction and ESG (environmental, social, and governance) aspects." He also pointed out that Malaysia is the world's sixth-largest semiconductor exporter, accounting for more than 13% of the global semiconductor backend processing market, and is considered the largest supply chain hub in ASEAN.

He added, "We wanted to expand production capacity in Korea as well, but considering the increase in electricity rates, we decided to establish a new production base in Malaysia."

Following Chairman Lee's establishment of a Korea-Japan joint venture overseas, cooperation between the two countries' business sectors is expected to expand. Innovation in manufacturing requires the integration of artificial intelligence (AI), and it is analyzed that the high-quality data accumulated over decades will be of great help.