Semiconductor, Display Equipment Makers Spending More and More on R&D

Cho Jin-young

According to industry sources, SFA Engineering, a South Korean display manufacturing and semiconductor packaging equipment supplier, is planning to increase its investment-to-sales ratio from 3% or so to at least 10% this year. This is to respond in advance to the expansion of its business with Chinese as well as South Korean companies. SFA Engineering’ sales hit an all-time high of 1.3197 trillion won last year. In December 2016, the company acquired SNU Precision, a display deposition equipment manufacturer, as one of its future growth drivers.

In the meantime, semiconductor and display manufacturing equipment supplier Jusung Engineering is planning to invest 30 billion won to 40 billion won, more than 20% of its annual sales, in R&D this year. The investment goes to new display equipment and photovoltaic equipment products. This company has continued to expand its manufacturing facilities since 2011 and its production capacity is equivalent to 500 billion won in sales as of now.

Wonik Materials, a semiconductor material supplier, is about to complete the construction of its third plant for precursor production, which has cost 27.9 billion won in total since 2015. The company has invested approximately 15% of its sales for last year in this plant. AP Systems, a semiconductor equipment manufacturer, decided on 3D NAND facility expansion requiring an investment of 32.2 billion won in November last year. Semiconductor deposition equipment manufacturer Eugene Technology is going to spend 15% of its sales for this year on R&D.

Such aggressive moves by the South Korean equipment manufacturers are to make the most of today’s boom in the related industries, which is being led by an increase in capital expenditure by leading companies such as Samsung Electronics, SK Hynix and BOE.