Avaco developing semiconductor equipment 

Display panel production equipment maker Avaco was developing equipment for use in semiconductor production, the company said.

Development started last year and the new equipment will contribute to sales starting in the second half of 2021 at the earliest, a Avaco spokesperson said.

The equipment will be unveiled enough reliability has been secured, they said.

The company was entering the semiconductor industry to diversify its revenue stream and clients, it said.

Last year, Avaco posted 226 billion won in sales. OLED equipment accounted for 13.2% of that, or 29.7 billion won, and sputter equipment 57.3%, or 129.4 billion won. 

The display panel industry in South Korea is facing the rise of China. Chinese companies are dominating the liquid crystal display market and they are expanding in the OLED sector.

Avaco this year clinched an equipment deal with China’s CSOT and HKC, worth 18.2 billion won and 5.2 billion won, respectively.

Avaco’s main clients, LG Display and Samsung Display, are also reducing their investments.

LG Display is expected to begin investing again next year after it turns to the black in the third quarter but companies like Avaco can’t simply rely on this hope.

The South Korean equipment maker last month also formed a lithium-ion battery roll-to-roll equipment team.

Avaco is expecting roll-to-roll equipment to contribute to sales starting in October.

A company spokesperson said it hopes that battery and semiconductor equipment will bring in new sales.

Avaco posted 11.1 billion won in operating profits and 87.7 billion won in sales in the first half of 2020, a decline of 47% and 44%, respectively. It posted 23.3 billion won in operating profits and 226 billion won in sales for the full year of 2019.