[Herald Interview] Merck seeks growth with Korean chipmakers

The global semiconductor industry is struggling to make ends meet amid sluggish demand and price decreases, but German technology firm Merck sees Korea, the home of the world's two largest memory chip producers Samsung Electronics and SK hynix, still an attractive destination for business.

“The leading players in the industry that are investing the most amount in new capacity, our Korean customers are at the top of that list. Making sure that we are continuing to engage with the leading players in the industry means that Korea is an important market for that,” said Katherine Dei Cas, executive vice president and global head of delivery systems & services (DS&S) of EMD Electronics, the electronics business unit of German industrial giant Merck.

“Our position is to ensure that we are a successful equipment and materials supplier to people like Samsung (Electronics) and SK hynix,” she added.

The Merck executive met with The Korea Herald last week at the company’s Ansan site in Gyeonggi Province, one of five DS&S manufacturing sites around the globe, during her visit to Korea to discuss further investments here.

The Ansan site plays a crucial role for the company, which aims to become the leading global DS&S supplier with a local presence. Citing Samsung’s foundry plant in Taylor, Texas, as an example, the executive said the Korean facility works closely with the US site to support equipment manufacturing for domestic clients, as well as its end-customers there.

Merck began its business in Korea in October 1989. Its DS&S business started from Hanyang Technology in 1986 and was integrated into Merck when the German firm acquired Versum Materials HYT in 2019. The tech giant’s DS&S business unit provides high-quality delivery equipment and storage of specialized chemicals and gases to customers here, including Samsung Electronics, SK hynix and LG Display.

According to Dei Cas, Korea is an important country to the success of Merck’s growth since many semiconductor facilities are being built in Korea and a lot of the German firm’s materials and equipment are required for chip makers' business expansion.

Mentioning Samsung’s strengths in the manufacturing process of the chips, she said Merck’s strengths are in new material development, innovation and the delivery of equipment, allowing clients to focus on their manufacturing by providing solutions “in a safe way” based on its more than 40 years of experience.

“Safety first and foremost is the most important thing in our business because it is critical to the success of the industry. … If we weren't able to do that, Samsung would go and find someone else in the industry.”

Merck announced its 600 million euros ($634 million) investment plan in Korea by 2025, as part of its spending plan announced in 2021. As part of that plan, it merged with the Korean thin film materials company M Chemicals last year.

The firm’s additional investment here is “under review” to strengthen its chip supply chain, according to the executive.

South Korea accounts for a significant part of Merck’s long-term strategy thanks to what it sees as a rosy outlook for the chip industry.

“The growth that we see coming is leading us to continue to evaluate the need for additional manufacturing capacity here in Korea,” Dei Cas said.

Although Merck has solidified its leading position here, it did not stop there. The German firm has already prepared for future growth engines in line with advancements in key clients’ chip manufacturing processes.

“We're at (the stage of) looking at the future growth. With the future investment of our customers here and looking at how we ensure that we're able to support the growth that's coming to Korea and evaluating how much capacity we might need to add to our manufacturing network to be able to support that growth,” Dei Cas said.