The Icheon-based Korean SME is leveraging its long-standing collaboration with Korean chip makers to expand globally.
The Korean domestic market is becoming increasingly saturated, making it difficult for companies to gain additional market share. Experts suggest that this may be the ideal time for Korean companies to consider exporting. Do you agree that this is a good time for small and medium-sized enterprises to diversify and internationalize? What do you see as the key challenges and opportunities for these SMEs when operating abroad?
Yes, I believe this is an opportune moment to enter the global market. As you mentioned, the domestic market is indeed saturated. We've been supplying our semiconductors to major players like Samsung and SK Hynix, which has given us the confidence to expand globally. Many of our international clients initially didn’t know about DS Techno, but once they used our semiconductors and components, they found that our quality exceeded their expectations. This positive feedback reinforces our belief that now is the right time for us to take our products to the global stage.
The semiconductor industry faced a significant downturn in 2022 and 2023 due to increased inventories and reduced demand, largely driven by monetary policy tightening. However, 2024 is shaping up to be a year of recovery, spurred by the AI boom. How do you anticipate the semiconductor sector evolving over the next three years, and how will this trend impact DS Techno's growth?
Semiconductors have become essential in modern civilization, and this will only increase in the future. The rapid growth of AI, as you pointed out, is driving demand for semiconductors, and this trend will continue. As semiconductor demand grows, so does our work, as we produce the critical components that go into semiconductors. We've already seen this in our own performance—in 2023, DS Techno experienced 25% growth, and we are projecting 20% growth in 2024. Looking ahead to 2025, we expect to attract new customers and continue expanding. With technological advancements in industries such as electric vehicles, semiconductors, and AI, we foresee a drastic pace of growth, and we are confident that DS Techno will grow alongside these developments.
How do you foresee the demand from your customers? Do you think you will need to reinvent your technologies or focus on price competitiveness?
We are currently building a silicon factory that will cover everything from raw materials to manufacturing the parts and products themselves. This is because we want to meet the evolving needs of our customers, which are becoming increasingly vertically integrated. As semiconductors become more micro in design every day, we believe delivering the highest quality with minimal impurities is critical. Our focus is on making a difference in terms of quality, and we are developing the necessary technologies to achieve this. We are confident that when our customers are satisfied with our products, it will naturally lead to increased sales. So, we are putting in our utmost effort to meet their needs.
Established in 1990, DS Techno has evolved into a specialized manufacturer of semiconductor production equipment parts, including quartz ware, Si ware, and CVD-SiC. The company’s contributions to localizing key technologies earned it recognition as SK Hynix’s best supplier in 2023. Can you walk us through some of the company's key historical milestones?
As you mentioned, we were established in 1990, initially focusing on quartz ware. By 2000, we expanded into silicon, and in 2016, we developed CVD-SiC. We now work with three different materials across three different product lines. I would say that the development of CVD-SiC in 2016 was one of our most significant milestones.
Looking ahead, what is your vision for the future?
When we developed CVD-SiC in 2016, the quality was certified when we began supplying it to Samsung. This gave us the confidence to continue developing new technologies. With the growing demand for microchip manufacturing, we believe that the demand for CVD-SiC will increase significantly in the coming years. In the future, we plan to expand upon this technology further. Our goal for 2030 is to quadruple our revenue to 500 billion KRW. Another key objective is to consistently provide the best quality materials and parts for CVD-SiC and silicon to ensure we build long-term relationships with our customers.
Achieving a high level of quality to surpass competitors is a significant challenge. For example, Ferrotech is well-known for its quality and process resilience. How do you intend to reach this level of quality to promote and sell your products effectively?
When we hear feedback from our current customers, they consistently tell us that our products are exceptionally good. This is evident from our contracts with major players like Samsung and SK Hynix. In fact, these partnerships led companies such as Intel, Micron, and Infineon to approach us. We didn’t reach out to them—they requested samples from us, and after seeing our samples, they were highly satisfied, which kickstarted our business relationships. Since then, we haven’t experienced any downturn in business. We are confident in the quality of our products, and it is this confidence that keeps companies returning as loyal customers.
Additionally, I’d like to emphasize that becoming a global company isn’t something you achieve simply because you want to. A strong product combined with competitive pricing will naturally propel a company onto the global stage.
From what we hear from clients like Samsung and SK Hynix, they praise our state-of-the-art clean room and our unmatched quality assurance. In fact, quality is one of our primary focuses, and we invest heavily in ensuring we deliver the best possible products. This commitment to quality is what sets us apart, and we will continue to prioritize it in the future.
You mentioned earlier that you expect to expand your CVD-SiC business. Today, there is some overlap between silicon parts and CVD-SiC parts. Looking ahead, how do you think CVD-SiC will overtake silicon in the etching process?
Silicon is widely used today, but it has a shorter lifespan. I believe that silicon and CVD-SiC will coexist in the future. As micro-technology advances, the plasma power involved in the process will become significantly stronger, which will drive the need for CVD-SiC. This is why we plan to expand our CVD-SiC production.
Additionally, we expect significant advancements in power semiconductors, and silicon cannot withstand the high temperatures required in these applications. CVD-SiC, however, will be able to meet these demands, making it a necessity in the future.
To achieve both high quality and price competitiveness, you handle all production processes in-house, including manufacturing, machining, drilling, and even producing raw materials for silicon. For instance, you’re building a new factory this year to produce silicon ingots for your silicon-based products. Can you elaborate on how in-house production enhances your product quality?
As you mentioned, we are constructing a new factory in Wonju to produce silicon ingots. This allows us to manage the entire process, from raw materials to the final product. By keeping everything in-house, we can ensure the quality of both the raw materials and the finished products. Since we control the whole process, we can better meet the needs of our customers, and this will become a key strength in our competitiveness moving forward.
This in-house capability for producing silicon will impact your silicon products. As for silicon carbide, the production process involves using carbon, coating with silicon carbide, and then chemically removing the carbon. How do you secure your raw materials to ensure you achieve the best quality possible?
We have developed our own processing method. If we were to buy ingots from other companies, we would need to check the quality every time. However, by developing the process in-house and producing the ingots ourselves, the quality confirmation process becomes much faster. This not only speeds up production but also allows us to address any issues or obstacles more efficiently.
Between 2021 and 2024, DS Techno experienced rapid revenue growth, reaching 126.4 billion KRW last year. This growth was primarily driven by the CVD-SiC business, which now accounts for 46% of the company’s revenue, followed by the quartz business at 39%. Which business segments will drive future growth?
As I mentioned earlier, CVD-SiC and silicon are the key to ensuring our bright future.
Currently, CVD-SiC contributes a bit less than 50% of your revenue, while silicon represents a little over 30%. When you collaborate with your customers and sell your products, do you offer them as individual parts or as a package?
While selling as a package sounds appealing, we are currently selling each product individually through separate contracts.
DS Techno supplies major overseas semiconductor companies like Intel and Micron, with 40-50% of your production exported to 10 countries, including the US, Germany, France, and Japan. Which regions do you believe hold the greatest growth potential?
I can’t specify any one region in particular. However, the businesses of Intel and Micron are expected to expand, and in the semiconductor equipment sector, companies in Japan are also set for significant growth. I believe that regions with strong semiconductor demand will be where we establish ourselves as a truly global company.
To achieve your goal of direct communication with semiconductor foundries and collaboration with semiconductor equipment companies—especially those in Japan—are you able to communicate directly with them, or do you work through partners? If partners are involved, what kind of partners are you looking for?
We are in direct contact with the companies. As I mentioned, semiconductor equipment companies in Japan have development departments that hold frequent meetings with us. This direct engagement allows us to clearly identify both our needs and theirs.
At our headquarters in Seoul, we have sales professionals dedicated to each region, covering English-speaking countries, Chinese-speaking countries, and Japan.
Looking ahead to your 40th anniversary, what personal goals would you like to have achieved by then?
As I’ve stated throughout the interview, making our customers happy and satisfied is our top priority. Growing together with them is our ultimate goal. By our 40th anniversary, I aim to achieve 1 trillion KRW in revenue.
By the way, in February 2025, we will participate in Semicon Korea, where we’ll be promoting our products by giving out golf balls with our logo on them. It’s a fun and unique way to advertise!
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