Samsung attempting to reduce reliance
Tokai Carbon Korea will expand its silicon carbide (SiC) ring production starting in mid-2021, thanks to its new factory in Ansung going into operation, according to Japanese media Nikkei.
The expansion is likely due to high demand for the rings from expanded production of NAND flash from major chip makers.
The South Korean subsidiary of Japan’s Tokai Carbon is expected to manufacture 50% more SiC ring in 2021 compared to 2019, the report said.
Tokai Carbon Korea, also known as TCK, in 2018 announced that it would be constructing the new factory with 36.3 billion won. It was completed in the first half of 2020. A TCK spokesperson said the factory went into production in mid-2020, but declined to share its production capacity or plans.
According to TCK’s own business report, its SiC product volume was 53,000 units per year as of 2019. Nikkei 's report means the company will likely add 26,500 units to this this year.
SiC rings are commodities used to fix wafers in place within chambers of etching equipment. SiC has 1.5 to 2 times more durability against plasma compared to silicon or quartz. Due to the increase in process steps during semiconductor production, SiC rings are being preferred over other materials.
The highest demand for the rings were coming from 3D NAND flash, a person familiar with the matter said. A hole is punched through the chip during the etching process, which requires the durable SiC rings. Other rings, such as focus rings, which are more easily worn out, may cause dead zones where the etching isn’t done adequately, they said. This had made SiC ring a must in 3D NAND flash production, they added.
TCK is thought to have over 80% market share in commodities such as SiC rings used within the chamber. It is effectively a monopoly, which allows it to enjoy operating margins of mid-30%.
Its largest customer in South Korea, Samsung Electronics, is attempting to diversify its supply of SiC ring to lower costs. Last year, Samsung registered DS Techno, which succeeded in manufacturing SiC ring, as a supplier. This was done likely to change its worn rings. Samsung is also planning to procure rings from KOSDAQ-listed KNJ. KNJ had previously supplied SiC products to higher-tier suppliers such as SKC Solmics Worldex and Kumkang Quartz. But it has recently decided to strengthen its back-end processing capacity to directly supply SiC rings to customers. Hana Materials is also producing some SiC ring for its second-largest shareholder Tokyo Electron.
TCK has countered these moves with patent lawsuits. In 2019, it filed patent infringement lawsuits against DS Techno. The lawsuit is ongoing. Samsung has delayed procuring rings from DS Techno due to this. TCK has also filed suit against a subsidiary of YMC which coats worn SiC ring to recycle them.