China’s Fusion Material Advances with South Korean Semiconductor Asset Deal

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Shares of the chemical additive supplier from China experienced an increase following news that it intends to acquire certain semiconductor raw material assets from a South Korean company.

The company traded up by 1.2% at approximately $8.41 USD, reaching $8.41 in value around midday, after earlier climbing by over 11%.

The firm announced it will collaborate with an investment management firm to purchase at least 95% of the assets related to the blank mask business of the South Korean seller for roughly $49 million USD. This move aims to bolster its development in the semiconductor materials industry. The purchase is part of a strategic agreement signed with the seller.

Blank masks are crucial semi-finished components used in fabricating photomasks, which are vital materials in the semiconductor manufacturing process, specifically in photolithography. These masks are indispensable consumables in wafer production. Currently, most high-end Argon Fluoride blank masks employed by Chinese firms are imported from Japan.

This acquisition is projected to grow the company’s semiconductor materials division and expand its customer base within the industry. The assets from the South Korean company have already been validated by multiple semiconductor manufacturing plants and independent clients across South Korea, China’s mainland, and Taiwan, and are in full-scale production.

However, the assets involved in this deal are currently unprofitable, with last year’s revenue at approximately $603,475 USD and operating losses amounting to around $770,000 USD, based on unaudited financial data.

The South Korean company involved is a subsidiary of SKC, a publicly-listed firm based in Busan that specializes in manufacturing and processing semiconductor materials and parts.

The primary revenue stream for this Chinese company is from its photovoltaic conductive paste segment. Its semiconductor paste products are already incorporated into the supply chains of several leading semiconductor manufacturers.