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THE INVESTOR
August 18, 2022

Market Now

Posco starts producing neon gas for chips

  • PUBLISHED :January 13, 2022 - 10:25
  • UPDATED :January 13, 2022 - 10:25
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Posco succeeds in producing neon gas for chips. (Posco)

South Korea’s top steel maker Posco said Wednesday that it has succeeded in producing neon, a rare gas mainly used for making chips, at its Gwangyang steel mill, becoming the first Korean firm to do so.

“It is very meaningful to achieve the complete localization of neon, which was a long-cherished task in the industrial gas market, in cooperation with TEMC, a small but strong Korean company,” Vice President Yoo Byung-ok said during the ceremony.

“Through ESG business management, coexisting with small but powerful companies, we were able to completely eliminate the technological dependence of the rare gas on overseas, and contribute to stabilize the domestic supply chain.”

Demands for rare gases such as neon, xenon and krypton have surged on upbeat sales of computer chips recently. Experts say the market for rare gases could reach some 280 billion won ($235.33 million) by 2023, up from 160 billion won in 2020.

Thus far, the nation’s semiconductor industry relies 100 percent on exports to secure supplies of the rare gases. Neon, in particular, is an extremely rare gas that is used to produce excimer laser gas for chips.

The latest breakthrough comes after several failed attempts to produce the rare gas locally amid price hikes and supply shortages.

Posco said it has joined hands with TEMC, a local producer of specialty gas and medical gas, for two years since 2019. TEMC has also succeeded in producing excimer laser gas using neon extracted from the new facility.

The two firms have already completed the test-run of the new facility, including quality review of the neon gases.

They plan to start mass production of the neon gases from this year. The new facility boasts an annual production capacity of 22,000-normal-cubic-meter of neon gases, an amount that meets about 16 percent of domestic demand.

As part of its renewed push to produce environment-friendly gases for the chip industry, Posco also plans to seek new partnerships with smaller rivals here to localize the production of other rare gases like xenon and krypton that are also heavily dependent on imports.

By Hong Yoo (yoohong@heraldcorp.com)

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