Korea Alcohol Group's operating profit at affiliate Korea Alcohol Industrial rose 123% year-on-year to 13.6 billion won in the first half of this year, as the group redirected its base from ethanol and commodity chemicals toward semiconductor materials.

Korea Alcohol Industrial's standalone sales reached 153.2 billion won, up 8.6% from a year earlier. ENF Technology posted consolidated sales of 349.9 billion won (+8.7%) and operating profit of 52.2 billion won (+16%). PURIT reported 82.6 billion won in sales (+19.3%) and 12.5 billion won in operating profit (+64.8%), based on industry figures released on Oct. 1.

What does the value chain look like?

Korea Alcohol Group has organised its semiconductor activities across six affiliates: KC&A, Korea Alcohol Industrial, ENF Technology, UBM, PURIT and PAM Technology.

KC&A sources chemical raw materials domestically and abroad. Korea Alcohol Industrial and PURIT produce high-purity electronic-grade solvents. ENF Technology converts those into thinners, etchants, strippers, cleaning solutions, monomers and polymers.

PURIT additionally runs a waste organic-solvent recycling line. KC&A describes its role as feeding raw materials to Korea Alcohol Industrial and ENF Technology.

Who supplies what?

Korea Alcohol Industrial, founded as an ethanol producer in 1984, claims to be the only South Korean manufacturer of normal butyl acetate. It entered electronic materials in 1999 after completing an electronic-grade normal butyl acetate plant in Ulsan.

Normal butyl acetate controls the dissolution performance and volatility of semiconductor thinners — solvents that dilute photoresist or strip residual photoresist from wafer edges.

PURIT, established in 2010 to recover and refine waste organic solvents, now produces propylene glycol monomethyl ether (PGME), propylene glycol monomethyl ether acetate (PGMEA), ethyl 3-ethoxypropionate (EEP) and ethyl lactate (EL).

PGME and PGMEA flow to ENF Technology as raw materials for thinners. EEP ships to Dow Chemical and Dongjin Semichem; EL to Dongjin Semichem and others.

Semiconductor materials delivered more than 80% of PURIT's H1 sales, totalling 66.8 billion won.

ENF Technology's semiconductor materials sales overtook display materials in 2020 and now represent about 65% of revenue. Hydrofluoric acid (HF)-based etchants that the company has successfully localised lead the recent growth in that segment.

What does the Yesan hub cover?

Korea Alcohol Industrial, ENF Technology and PURIT are consolidating into the Yesan 2 General Industrial Complex in South Chungcheong Province under a combined 450 billion won investment plan.

PURIT leads on construction. It will invest about 45 billion won and complete production preparations in the first half of 2027. The investment could rise to 100 billion won with demand growth.

ENF Technology and Korea Alcohol Industrial have committed 31.8 billion won and 14.3 billion won respectively to site acquisitions.

How has the group expanded its affiliates?

ENF Technology entered the chemical mechanical planarization (CMP) slurry market in 2021 by acquiring a stake in UBM. CMP slurry mixes abrasive particles and chemicals to planarise wafers.

Earlier this year, ENF Technology increased its stake in PAM Technology — a joint venture with Japan's Morita Chemical Industries — making it a consolidated subsidiary. PAM Technology produces HF-based buffered oxide etchant (BOE) and ammonia water.

What are the longer-term targets?

Korea Alcohol Industrial has set a 2030 target of 805 billion won in consolidated sales, 88.2 billion won in operating profit and a return on equity of 12% or higher. The group plans to continue expanding each affiliate around semiconductor materials.