Samsung and SK Hynix plan to diversify ammonia supply

CTOnews.com, January 11, according to TheElec, Samsung recently began buying ammonium hydroxide, also known as ammonia, from ENF. SK Hynix is also considering purchasing ammonia from global suppliers, possibly BASF, the source said.

The moves by South Korean chipmakers threaten the position of Toyo Fine Chemical Co., Ltd. (Dongwoo Fine-Chem), which was once the only ammonia supplier to the two companies.

Ammonia is mixed with H2O2 or ultra-pure water to become a cleaning agent in the process of chip production.

The water is currently worth less than 100 billion won (about 544 million yuan) in South Korea, but as the chip advances and more ammonia is used, the market is expected to become bigger.

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

When Samsung built its chip plant in Xi'an, China, Sumitomo formed a joint venture with the city-based China resident Chemical Company to supply ammonia to the chip giant.

CTOnews.com learned that one of the reasons for Dongwoo Fine-Chem 's dominance is its price competitiveness. It sells ammonia at 700 won (3.81 yuan) to 800 won (4.35 yuan) per liter, a price that no other company can match.

But chipmakers such as Samsung and SK Hynix have been diversifying their suppliers because of growing supply chain concerns in recent years.

The conflict between Russia and Ukraine has also increased the cost of ammonium, so prices have risen, making chipmakers focus more on stable supply than simple prices.