| Anand Nambiar, executive vice president and head of the Semiconductor Material Solutions and Electronics Business at Merck, poses at the company's booth during the SEMICON Korea exhibition at COEX convention center in Seoul, Feb 2. Courtesy of Merck Korea |
Merck has vowed to bolster its investments in Korea's semiconductor market even though the global chip industry has been struggling with weak demand, according to the head of the company's chip materials business.
The executive said the Germany-based chip materials company forecasts more applications to require more semiconductors with the development of emerging technologies relying on the internet of things (IoT), 5G and artificial intelligence (AI).
"Our customers, like Samsung Electronics and SK Hynix, have announced major capacity expansions over the next decade. These capacity expansions require more equipment and more materials, meaning the semiconductor industry continues to grow," Anand Nambiar, executive vice president and head of the Semiconductor Material Solutions and Electronics Business at Merck, told The Korea Times during the SEMICON Korea exhibition in Seoul, Feb. 2.
When asked how long the chip industry's slump is expected to last, the EVP said he doesn't know the exact timing, but believes that more chips will be needed in the future.
"We do not know how long the recession in the semiconductor industry will last. Of course, the global economic situation is a key factor in consumer and enterprise spending. We are all very familiar with the semiconductor cycles and just as in any other cycle, I expect consumer demand to pick up and that will bring our business also back to market," Nambiar said.
"Why would it change? I think it's because the semiconductor industry has seen its applications really become very diverse. Initially, we had just a PC. Now we have so many applications across so many different sectors. Particularity the introduction of 5G and the increased computing power for AI are coming out. It's just starting. The revolution of data science and how to use data to make better livelihoods, life decisions and so on. So, the recession may not last for a few months, but the longer-term prospects remain extremely robust."
Nambiar further mentioned that he was impressed with the explosive attention to the chip-related companies during the SEMICON Korea exhibition where Merck also set up its promotional booth.
"At the SEMICON Korea, I see the great energy. I asked myself where the recession is. Everybody sees the long term and believes there will be such a strong long-term opportunity," he said.
With its positive view on the chip industry, Merck already announced in 2021 that it would invest 830 billion won ($660 million) in Korea by 2025. As part of the investment, the company acquired M-Chemical, a chemical business of local chip equipment and materials company Mecaro.
He also said Merck will supply high-k precursors, which are used in the thin film deposition process of chip manufacturing, to the global market.
"M-Chemical has production and research positions in high-K deposition materials that are complementary to our portfolio of offerings," he said. "Merck brings channels to the market for these high-K products. We seek to provide our customers with a broad range of deposition material offerings, with solutions via customer applications support, to match our customers' specific current and future needs. M-Chemical provides Merck with a greater footprint and capacity in Korea to increase our supply chain resilience. Additionally, the M-Chemical integration brings onboard colleagues in production and R&D to support our growth ambitions."