APTC eying Micron, Intel to supply etching equipment

South Korean semiconductor etching equipment maker APTC will be opening up offices in the US to target the industry heavyweights, according to its CEO last week.

“Our Silicon Valley offices will open in October this year,” said Choi Woo-hyoung, head of APTC on Aug. 17. “Our goal is to partner with the largest semiconductor companies in North America.”

He added that the firm will open with a team of experts handling not only sales, but R&D as well. “We plan on using around 20 billion won of our retained earnings to build the right kind of foundation for targeting the North American markets.”

The “largest companies” appear to refer to Micron Technology – the world’s third-largest memory chipmaker after Samsung – and Intel, the No.1 semiconductor company worldwide.

Micron’s business overlaps with SK hynix, APTC’s largest client, a fact that would give the supplier some leverage. Once Micron becomes APTC’s reference, it can woo other firms, such as Intel.

Currently, APTC’s sales are primarily from SK hynix. Many, including the CEO himself, has been calling for more diversity in its portfolio in order to pursue sustainable growth.

It won’t be an easy journey, considering that rivals, such as memory chip-testing equipment makers, have worked to strike a deal with Micron for years, only to fail.

Meanwhile, APTC also plans to solidify its ties with existing customers by stepping up R&D and sales. As a part of such efforts, the firm said it is close to complete developing the LEO WH, an upgraded poly-etching equipment of higher precision and reliability. The equipment – named after the CEO Choi Woo-hyoung – is expected to be used for producing 1zDRAM.

Following pilot tests at the end of this year or early next year, the equipment is to be applied for mass production by the end of 2021 at the earliest.

“Our tests so far show that the equipment measures up to the other new equipment from more advanced North American suppliers,” said Choi.

APTC also plans on renewing the development of the halted project for oxide etching equipment, while pursuing the development of Chemical Vapor Deposition and Atomic Layer Deposition. With them, the firm is looking to establish itself as an all-around semiconductor equipment maker with capacities in both etching and deposition.

In terms of bottom lines, APTC has not been doing all that well. Sales in the first half of the year stood at 34.3 billion won, while operating profit was just over 9 billion won, according to its financial statements. They reflect a 16.2% and 38.6% drop on-year.

But the CEO remained optimistic, mostly on account of the fact one of its key clients will be opening a DRAM plant in the Wuxi region of China.

“The memory chip market could have been better this year,” said the CEO. “Our clients are investing less, which means less business for us. Still, we believe we can maintain the similar record-breaking stats as last year, or even go higher.”

Last year, APTC logged annual revenues of 61 billion won, while its operating profit stood at 21.1 billion won. Operating profit rate hit a whopping 34.52%. Compared to the previous year, sales rose 48.4%, while profit was up 66.1%. Retained earnings were also solid, reaching 32.6 billion won as of the end of June this year.

Other than the Samsung sister company Semes, APTC is the only other etching equipment company applicable for mass production. Worldwide, its rivals are Applied Materials and Lam Research of the US, along with Tokyo Electron of Japan.

The Elec is South Korea's No.1 tech news platform.