[KOSDAQ REPORT (29)] NeosemiTech committed to foundry business

This is the 29th in a series of articles analyzing companies listed on the Kosdaq, Korea`s secondary stock market loaded with tech firms. - Ed



By Yoo Soh-jung



INCHEON - NeosemiTech Corporation, a mid-sized company specialized in manufacturing wafers for semiconductor and solar silicon products, is comparatively riding "smoothly" through the protracted global economic downturn, the company chief said.

"We`ve stayed true and devoted to our technological expertise and have been able to continuously strengthen it by focusing on the foundry business, an indispensable fundamental process," Oh Myung-hwan, the company`s chief executive officer and president, told The Korea Herald at his corporate headquarters located in Songdo.

The company, founded in February 2000, successfully went public on the tech-heavy local Kosdaq bourse in October, thanks to a stable and solid business model and investors` confidence, Oh boasted.

Its core business of offering wafer-processing services to clients that supply their own raw materials may not seem very sophisticated, but Oh stresses that his company`s global competitiveness lies in the "sophisticated, complex and patented processing technologies."



"Our business decision not to get involved in buying raw materials, especially during the economic crisis, is what has prevented us from suffering a revenue plunge, as a drop in demand has lowered the value of material costs and the finished products," Oh explained. "So, our company is free from having to worry about unstable vacillating raw material prices during these tough times; instead, we`re just focused on developing the technologies for providing our service of processing brought-in materials."

These days, Oh is busy producing wafers based on gallium arsenide for light-emitting diode displays. He says he is looking into the promising outlook for the LED market, which is enjoying a boom. The chief with a doctorate in the field of electronic materials believes the LED market will have grown 10-fold by 2012.

The Seoul National University graduate claims that NeosemiTech developed the patent technology to produce gallium arsenide semiconductor crystals through the so-called "continuous growth process" for the first time in the world.

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Such innovative development led the company to naturally extend the technology to produce solar silicon products with the capacity to generate about 200 megawatts of electric power. Its long-term business goal is to raise the production capacity to 1 GW (gigawatt) by 2011.

NeosemiTech`s purported differentiation is that it is the only company that has the technology to produce wafers with gallium arsenide in Korea, which Oh declares is "cutting-edge semiconductor technology," that has been applied to produce solar silicon wafers, another future-oriented market.

The solar energy market offering vast potential business opportunities in the era of green growth and global carbon-emissions cutting pacts are other solid reasons for Oh`s plans to invest in developing its solar silicon production know-how.

According to the passionate engineer, the value of Korea`s solar energy market is estimated to be 300 billion won ($260 million), while the value of the solar silicon wafer market would represent half, or 150 billion won. The solar energy market is now globally valued at $10 billion. By 2012, the value is forecast to spike to $40 billion, Oh said. This would also mean that half of that value would be for the wafer market - $20 billion.

NeosemiTech projects its solar silicon business to make up 60 to 65 percent of its revenue, and the LED sector to account for 35 to 40 percent by 2011. The company is now in the middle of developing the technology to produce sapphire wafers used for white or blue LEDs.

In the third quarter of this year, the LED business accounted for about 20 percent of its revenue source, with the remaining generated by the solar silicon business.

Exports make up most of Oh`s business revenue, or about 80 percent of the total. NeosemiTech last year recorded 103 billion won in sales, with its operating profit totaling 35.4 billion won and net profit hitting 23 billion won. This year, the company projects at least 150 billion won in sales, excluding the turn-key project business that is now ongoing.

"The solar business signifies our competitive edge in terms of scale, while the LED segment signifies our competitive edge in terms of technological prowess," Oh said.

(sohjung@heraldm.com)





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