German chip materials firm Merck set to expand investment in S. Korea

German-based semiconductor materials company Merck said Friday it has plans to expand investment in South Korea, which has major chipmakers Samsung Electronics Co. and SK hynix Inc., as the global semiconductor market is set to make a rebound in 2024, driven by booming demand for artificial intelligence chips. "Now we also know that the AI applications and the AI mega trend are also going to accelerate and require more hardware in the future," Anand Nambiar, chief commercial officer and executive vice president for semiconductor materials at Merck, said in a media event in Seoul. "We expect maybe by the end of the decade that there will be another round of investments that are needed in order for us to meet the customer needs in Korea itself." In 2021, Merck announced plans to invest 600 million euros (US$652.4 million) by 2025 and has spent some 300 million euros so far, acquiring Korean chemicals firm M Chemicals Inc. and expanding facilities in the country. The exact amount of the additional investmen t will be decided between this year and next year, given the pace of the market recovery, he added. Nambiar said Samsung Electronics and SK hynix are Merck's key clients, who are leading the memory chip market with a combined market share of 60 percent. Their leadership in the memory chip market, particularly in advanced chips like high bandwidth memory (HBM) for AI applications, positions them as crucial partners for Merck. "The Korean market continues to be one of the most exciting parts of the industry," said Nambiar. "The Korean customers are very well positioned and they've taken leadership, particularly in the memory sector. So we're making sure that we are present with them to win in this marketplace." At the global tech show CES 2024 held in Las Vegas last month, the Merck official had a meeting with Samsung Electronics CEO Kyung Kye-hyun to discuss the market trend and shared their views on the semiconductor industry. "CES was all about AI and that was essentially what Kyung also communicated to us and we talked about some of this in terms of the opportunities that it creates for semiconductor companies and materials suppliers together," he said. "I think I would share with you his excitement that AI applications will be the key driver of growth for the semiconductor industry for the next decade." Source: Yonhap News Agency

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