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Expansions: Sumitomo Chemical to build high-purity semiconductor chemical plant in US; Wanhua’s US$2 bn polyolefin project in Shandong approved

Sumitomo Chemical to build high-purity semiconductor chemical plant in US

Sumitomo Chemical’s Sumika Semiconductor Materials Texas subsidiary intends to build a plant to produce high-purity semiconductor process chemicals in the US. It established a new company in Texas in the US through Dongwoo Fine-Chem Co, a wholly-owned subsidiary located in South Korea. The new company, Sumika Semiconductor Materials Texas, will serve as a strategic base in the US market for the group’s semiconductor process chemicals business and work to expand this business in the US by capturing robust demand. The new plant is due to commence operations in fiscal 2024.

Sumitomo Chemical started production of high-purity chemicals used for precision cleaning in the semiconductor manufacturing process in 1978 at its Chiba Works in Japan, and since then has built its supply systems in Asian countries to meet customer demand. It says that its ultra-high purification technology reduces impurities down to a parts-per-trillion level and its quality assurance system based on micro-impurity analysis technology, as well as for its agility in increasing supply capacity in response to market demand.

Growth in demand for semiconductors is expected to continue, driven by market uptake of 5G-compatible devices and progress in the development of advanced technologies, such as AI and autonomous driving. Against this backdrop, governments of various countries have launched industrial policies to enhance semiconductor production capacity, and in the US, major semiconductor manufacturers have, one after another, announced plans to build new semiconductor plants.

To effectively capture this strong U.S. demand for semiconductor materials, Sumitomo Chemical has decided to construct the new high-purity semiconductor process chemical plant. The company has a subsidiary in Arizona, US, Sumitomo Chemical Advanced Technologies, through which it operates a compound semiconductor materials business.

With this new plant coming into operation, the group will have its bases in both Texas and Arizona, the two states where the US semiconductor industry is concentrated, and will further accelerate the development of its semiconductor materials business in the US.

Wanhua’s US$2 bn polyolefin project in Shandong approved

In other news, China’s Wanhua Chemical Group’s plan to build a plant costing US$2.58 billion to make polyolefin materials has been approved, according to local Chinese reports. The Shandong provincial arm of China’s development and reform commission gave chemical firm Wanhua permission for the project that will make 1.2 million tonnes/year of ethylene and polyolefin products along with various intermediates. The plant will produce 250,000 tonnes/year of LDPE, plus two production facilities will be built for ethylene-octene copolymer, or POE, each with capacity of 200,000 tonnes/year.

Wanhua did not give details of the construction schedule, but had said earlier that it would take three years.

Almost 30% of the funding will come directly from Yantai-based Wanhua, while the rest will take the form of bank loans, it said.

A notable difference between this updated plan with the one Wanhua announced earlier is that the capacity of POE, used in making high-end photovoltaic cells, is doubled. To make room for the added capacity, the company has to remove a HDPE production line as well as a PP production facility from its original plan.

Unlike HDPE and PP, the technology to make POE, whose special molecular structure enables it to have the properties of both plastic and synthetic rubber, is still in the hands of a small number of multinational corporations, so the new facility should signify a breakthrough for domestic producers, said Liu Hairong, an analyst at Minsheng Securities.

Yantai Chemical Industrial Park, where the new plant is set to be build, will become one of the world's biggest POE manufacturing hubs, Liu added.


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