Korean Steel Giant Enters Gas Industry
POSCO Group has decided to acquire Chemgas Korea, a specialized company, to vertically integrate the supply of rare specialty gases essential for semiconductor manufacturing processes. According to industry sources on the 26th, POSCO Group is in detailed negotiations to acquire a 100% stake in IHC, the parent company of Chemgas Korea. The acquisition price is expected to be between 60 billion and 70 billion Korean Won. A formal announcement of the acquisition is anticipated in July.
Chemgas Korea primarily refines and blends rare specialty gases such as neon (Ne), krypton (Kr), xenon (Xe), and nitrous oxide (N2O), which are used in semiconductor manufacturing. The company imports raw gases from overseas regions like China and Southeast Asia, refines them in South Korea, and supplies them to companies such as Sol Materials, Onsemi, and DB HiTek for sale. Chemgas Korea has established a direct trading network with overseas suppliers, ensuring stable supply capability even during periods of significant gas price increases.
Rare specialty gases, including neon, krypton, and xenon, are gases that exist in extremely low concentrations in the air and are challenging to produce. Due to their low atmospheric concentration, they are mainly produced as by-products from Air Separation Units (ASUs) in large steel mills or petrochemical plants during the separation of gases like nitrogen, oxygen, and argon. These rare gases, if further purified, can achieve purities of 99.999% or higher. These gases are crucial for cutting-edge fields such as excimer lasers used in semiconductor manufacturing exposure equipment, plasma etching and cleaning equipment used in microfabrication, and propulsion systems for artificial satellites.
In early 2022, following the outbreak of the Russia-Ukraine war, prices for rare gases soared, reaching up to a hundredfold increase at their peak. Subsequently, prices gradually declined and have now returned to pre-war levels. In 2022, automotive parts manufacturer IHC acquired Chemgas Korea. Influenced by the surge in prices for semiconductor specialty gases, the company's sales reached approximately 50 billion Korean Won in 2022. With the normalization of neon and krypton prices, Chemgas Korea's sales adjusted to about 21.8 billion Korean Won in 2024.
POSCO's interest in the semiconductor specialty gas sector appears to have been triggered by Japan's export restrictions in 2019 and the price surge caused by the Russia-Ukraine war in 2022. Last November, POSCO formed a joint venture, POSCO Joongtai Air Solution Co., Ltd., with China's Joongtai Cryogenic Technology. Subsequently, the company began construction of a high-purity rare gas plant at the Gwangyang Steelworks, which produces rare gases through an air separation unit. POSCO reportedly plans to establish a complete vertical integration system in the rare gas field, leveraging Chemgas Korea's refining and blending technologies.
Furthermore, Chemgas Korea is expected to expand its special gas product portfolio for semiconductor manufacturing, including arsine (AsH₃), boron trifluoride (BF₃), boron trichloride (BCl₃), hexafluoroethane (C₂F₆), chlorine trifluoride (ClF₃), hydrogen fluoride (HF), and phosphine (PH₃).
This acquisition is anticipated to gradually weaken POSCO's strategic partnership with TEMC. POSCO and TEMC have maintained close cooperation since jointly developing a crude neon extraction unit in 2019. The neon products generated from this unit have been supplied to Samsung Electronics and SK Hynix. However, signs of tension in their relationship emerged between December last year and February this year, as POSCO Capital significantly reduced its stake in TEMC from 9.54% to 4.95%. The establishment of POSCO Joongtai Air Solution Co. also foreshadowed this tension. If POSCO enhances its own specialty gas supply capabilities through the acquisition of Chemgas Korea, the two companies will become competitors.
Industry insiders commented, "POSCO's move to reduce cooperation with TEMC and acquire Chemgas Korea, which has extensive refining and supply experience, is interpreted as a strategic move to directly enter the specialty gas market at the group level."
