[Click e-Stock] "LK Chem, an Irreplaceable Company in Advanced Semiconductor Materials"

On December 5, Shinhan Investment Corp. analyzed that LK Chem is an irreplaceable company in the field of high-difficulty semiconductor materials. The firm did not provide an investment opinion or target price.

LK Chem manufactures precursors and ligands, which are raw materials for thin film materials used in semiconductors. Thin film materials are categorized as high-k (high dielectric constant) and low-k (low dielectric constant). High-k materials are mainly used in DRAM, while low-k materials are used in system semiconductors (logic) and NAND, among others.

Choi Seunghwan, a researcher at Shinhan Investment Corp., stated, "LK Chem has strengths in CP and PCP ligands for high-k applications and DIS precursors for low-k applications. PCP ligands are produced exclusively by LK Chem in Korea," adding, "As the HBM market expands, with much greater speed and bandwidth requirements than conventional DRAM, demand for high-k precursors is also growing."

He further emphasized, "From 2025, the low-k DIS precursor is driving high growth. The spread of advanced logic chips (10nm or below) for high-performance servers and the trend toward higher NAND stacking are expanding demand for low-k materials. There are only three companies worldwide that commercially produce low-k DIS precursors, and LK Chem has the largest single capacity."

He continued, "The first half of 2025 was sluggish due to temporary client inventory adjustments and U.S. tariff issues, but the third quarter is expected to see an improved product mix, and growth is projected to resume in the fourth quarter. With the addition of new product sales, including DIS precursors, in 2026 and 2027, revenue growth of 40-50% and operating margins of 30-40% are anticipated."