Korea Zinc (010130) is strengthening the supply chain for ultra-high-purity sulfuric acid used in semiconductor manufacturing, a material considered essential to South Korea's chip industry. Analysts credit the "Troika Drive" strategy of Chairman Choi Yun-beom, which aims to lift profitability through a long-term structural shift.
Korea Zinc said on the 2nd that it recently completed an expansion of semiconductor sulfuric acid production lines No. 20 and No. 21 at its Onsan smelter in Ulsan and has begun full operations. Annual production capacity for semiconductor sulfuric acid rises to 320,000 tons from 280,000 tons, an increase of about 14.3%.
The expansion was pursued to get ahead of new production facilities coming online at major domestic chipmakers as investment in artificial intelligence infrastructure expands. Korea Zinc has previously scaled up its semiconductor sulfuric acid capacity in step with customers' capital spending schedules.
Semiconductor sulfuric acid is used in cleaning processes that remove organic residues and fine contaminants from wafer surfaces during chip manufacturing. As circuits become finer, tolerance for impurities falls to extremely low levels, so the purity and consistency of the acid have a major impact on product yields and reliability. That is why, unlike commodity products that can be shipped as soon as a production line is secured, suppliers must pass customer quality approvals and process validation and also demonstrate a track record of stable supply.
Korea Zinc produces "six nines" (6N) ultra-high-purity semiconductor sulfuric acid with purity of at least 99.9999% by recovering and refining sulfur dioxide (SO₂) generated during zinc and lead smelting through multiple stages. Unlike the common approach of sourcing sulfur externally, the company uses smelting byproducts directly as raw material. That insulates it from cost pressures such as spikes in global sulfur prices.
Korea Zinc is the largest supplier of semiconductor sulfuric acid in South Korea, accounting for more than 60% of domestic demand. About 95% of its output goes to major domestic chipmakers including Samsung Electronics and SK hynix, and the company is also known to export to Japan and Singapore.
Korea Zinc plans to raise semiconductor sulfuric acid capacity in stages to as much as 500,000 tons a year, in line with expansion schedules at domestic chipmakers. It is also pursuing a semiconductor sulfuric acid line with annual capacity of 100,000 tons at an integrated smelter under construction in Tennessee, which is targeting trial operations in 2029 and commercial production in 2030.
Observers say the moves reflect Choi's preemptive business strategy and leadership. In 2022, the chairman unveiled the Troika Drive, a strategy to strengthen competitiveness in new businesses built on three pillars: renewable energy, resource circulation and secondary battery materials.
The sulfuric acid expansion is part of that new business push, improving profitability by recycling sulfur dioxide, a byproduct. Analysts say the strategy succeeded because it anticipated the surge in memory chip demand driven by AI. Korea Zinc posted revenue of 12.445 trillion won and operating profit of 1.333 trillion won in the first half of this year, its best first-half results on record.
"Going forward, we will expand domestic capacity in stages in line with customer demand and investment schedules, while building a supply base for semiconductor sulfuric acid in the U.S. and other global markets to establish ourselves as a key partner in the global semiconductor materials supply chain," a Korea Zinc official said.
