MBK Partners and Young Poong’s Takeover Bid Raises Concerns Over Semiconductor Supply Chain Stability
The ongoing hostile takeover bid by MBK Partners and Young Poong for Korea Zinc is raising concerns about potential disruptions to the global semiconductor supply chain. Korea Zinc, a key supplier of semiconductor-grade sulfuric acid, plays a crucial role in providing this essential material to South Korean semiconductor giants Samsung Electronics and SK Hynix.
The semiconductor sulfuric acid market in South Korea stands at around 380,000 tons per year, with Korea Zinc supplying 240,000 tons and LS MnM Inc. providing 140,000 tons. Samsung and SK Hynix, which together account for over 98% of the total consumption, use the material for cleaning semiconductor wafers, a critical step in ensuring production yield and quality. Due to strict quality and delivery requirements, importing sulfuric acid is limited, making Korea Zinc and LS MnM the only domestic producers.
Korea Zinc's production capacity is set to expand from 280,000 to 320,000 tons annually by 2026, with long-term plans to exceed 500,000 tons. Any disruptions in supply or quality could impact production at Samsung and SK Hynix's major semiconductor facilities, highlighting the importance of Korea Zinc's ongoing operations.
Industry experts are worried that a private equity takeover, driven by short-term financial gains, could undermine Korea Zinc's long-term investments needed to maintain and expand production. South Korea is in the midst of significant semiconductor fab expansions, and domestic demand for sulfuric acid is expected to surpass 1 million tons annually upon completion of projects by Samsung and SK Hynix.
The risk extends beyond South Korea. If Korea Zinc falls into the hands of Chinese interests, supply priorities could shift, potentially undermining the stable flow of this critical material to South Korean companies and impacting the global semiconductor supply chain, particularly the U.S., which competes with China in the AI sector.
