LG Chem to turn petrochemical plant into chip materials facility

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LG Chem is planning to invest hundreds of billions of won to convert part of its petrochemical production complex into a semiconductor materials facility, accelerating its shift…

LG Chem is planning to invest hundreds of billions of won to convert part of its petrochemical production complex into a semiconductor materials facility, accelerating its shift toward higher-value products as Chinese oversupply continues to squeeze South Korea’s chemical industry.

The proposed investment would be the company’s first major project funded by the 2.5 trillion won ($1.86 billion) raised through the sale of shares in its battery subsidiary LG Energy Solution last month.

According to industry sources on Tuesday, LG Chem is considering expanding production capacity for isopropyl alcohol (IPA) at its Yeosu complex in South Jeolla Province, using land currently occupied by a neopentyl glycol (NPG) production facility.

NPG is an additive used in paints and coatings, but its profitability has deteriorated sharply in recent years as surging Chinese production has driven down prices.

IPA, by contrast, is a higher-value chemical widely used in semiconductor manufacturing to remove microscopic impurities and residues from wafer surfaces.

LG Chem supplies the cleaning material to major global chipmakers, including Samsung Electronics, SK hynix and Taiwan Semiconductor Manufacturing Co. (TSMC).

The company, the world’s largest IPA producer by market share, currently manufactures 165,000 metric tons annually at its Yeosu plant.

The planned expansion would add tens of thousands of tons of capacity, strengthening its ability to supply high-purity IPA for semiconductor manufacturing.

According to SEMI, the global market for wet chemicals used in semiconductor cleaning and etching, including IPA, is projected to grow from $3.8 billion in 2025 to $6.5 billion by 2030.

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