SK Hynix aiming to diversify its ammonium water supply like Samsung

Samsung has recently begun procuring ammonium hydroxide, more commonly known as ammonium water, from ENF, TheElec has learned.

SK Hynix was also considering procuring the water from a global supplier, likely Germany’s BASF, sources said.

These moves by the South Korean chipmakers threatens the position of Dongwoo Fine-Chem which had been the sole supplier of water to both of them.

Ammonium water is mixed with H2O2 or ultra-pure waters to become cleaning agents in the chip production process.

The South Korean market for this water is currently worth less than 100 billion won but is expected to grow larger as more of the water is being used as chips advance.

Dongwoo Fine-Chem is a subsidiary owned completely by Japan’s Sumitomo Chemical.

It started producing the waters at Iksan, South Korea in 1996 and had dominated the market since then.

When Samsung build its chip plant in Xi’an, China, Sumitomo formed a joint venture with China’s Sumika based in the city to supply its waters to the chip giant.

One reason for Dongwoo Fine-Chem’s dominance has been its price competitiveness.

It sold the water for 700 to 800 won per liter and no other companies could match this price.

But due to increasing concerns over supply chains in recent years, chipmakers like Samsung and SK Hynix have been increasing their efforts to diversify their suppliers.

Russia’s invasion of Ukraine has also increased the cost of ammonium, so the price has already gone up, making chipmakers focus more on steady supply than mere prices.