Samsung plans to diversify chip cleaning agent supply, SK Hynix too

Samsung started purchasing Ammonium Hydroxide (Ammonia water) from ENF. In addition to Samsung, SK Hynix is also looking at procuring ammonium water from a global supplier, possibly Germany’s BASF. Both companies have been stepping up efforts to diversify their suppliers in recent years amid growing supply chain problems.

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These decisions threaten the position of Dongwoo Fine-Chem as it was the sole supplier of ammonia to both the South Korean chipmakers. In the chip production process, Ammonium water is mixed with Ultra pure water to become a cleaning agent.

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The market for such water in South Korea is currently less than 100 billion won (about 544 million yuan), but with advances in chips and the use of more ammonia, the market is expected to grow even further.

Dongwoo Fine-Chem is a wholly owned subsidiary of Sumitomo Chemical, Japan. It began producing ammonia in 1996 in Iksan, South Korea and has dominated the market ever since.

One of the reasons for Dongwu Fine-Chem’s dominance is its price competitiveness. It sells ammonia for 700 won (about 3.81 yuan) per liter, which is unmatched by other companies. But increasing the cost of ammonium and supply chains in recent years, chipmakers increasing their effort to diversify their suppliers.