BGF Group Expands into Semiconductor Specialty Gas Market with KNW Acquisition

BGF Group, a well-known South Korean conglomerate and Samsung Group's in-law, is reportedly entering the semiconductor special gas market through the acquisition of KNW. BGF Eco Materials, a subsidiary of BGF Group, is currently conducting due diligence for the acquisition of KNW, with the acquisition process expected to be completed soon.

KNW, founded in 2001, is a materials expert that produces materials for electronic components, automobiles, and semiconductors. Its subsidiary, Fluorine Korea, which produces specialty gases for semiconductors, is a key player in this industry. BGF Group, formerly known as Bokwang, is well-known as an in-law of Samsung and BGF Eco Materials is responsible for material-related business.

BGF Eco Materials' acquisition of KNW appears to be aimed at strengthening its semiconductor material business, particularly with Fluorine Korea as a springboard to enter the specialty gas market. Fluorine Korea produces high-value-added gases such as fluorine (F2) and sulfur hexafluoride (SF6), which are used to clean semiconductor equipment.

Fluorine Korea currently supplies F2 and SF6 to major semiconductor companies in South Korea, Taiwan Semiconductor Manufacturing Company, and United Microelectronics Corporation. Although the expansion of semiconductor factories worldwide is increasing, it is expected that sales will continue to grow due to the limited number of companies that can supply F2 and SF6.

Industry insiders view BGF Group's acquisition of KNW as a strategic move to strengthen its cooperation with Samsung Electronics. It is crucial for Samsung, which does not have any natural gas-related subsidiaries, to secure a stable supply of specialty gases. After acquiring KNW, BGF Group is highly likely to supply Samsung Electronics with various semiconductor specialty gases in addition to the ones currently supplied.

In addition to the acquisition of KNW, the industry is also paying attention to BGF Group's re-entry into the semiconductor-related industry. BGF Group took over STN Semiconductor Communications, a semiconductor packaging business that was spun off from Samsung Electronics' Onyang factory. After being trained and sold to SFA in 2015, it is now known as SFA Semiconductor.

At the same time, Fluorine Korea is reportedly considering expanding its production of fluoroethylene carbonate (FEC), an electrolyte additive used in LFP batteries and lithium-ion batteries. With domestic battery manufacturers preparing to enter the lithium iron phosphate battery market, the demand for FEC in South Korea is continuously increasing.