Samsung has recently started sourcing ammonium hydroxide, often referred to as ammonia, from ENF, according to TheElec. SK Hynix is also considering sourcing ammonia from a global supplier, possibly BASF of Germany, the source said.
The moves by the South Korean chipmaker threaten the position of Dongwoo Fine-Chem, which was once the sole supplier of ammonia to the two companies.
Ammonia mixed with H2O2 or ultrapure water becomes a cleaning agent during chip production.
The market for this water in South Korea is currently worth less than 100 billion won (about 544 million yuan), but it is expected to grow bigger as chips advance and more ammonia is used.
Dongwoo Fine-Chem is a wholly-owned subsidiary of Sumitomo Chemical in Japan. It started producing ammonia in Iksan, South Korea in 1996 and has dominated the market since then.
When Samsung was building its chip factory in Xi’an, China, Sumitomo formed a joint venture with the city-based China Sumika to supply the chip giant with ammonia.
One of the reasons for Dongwoo Fine-Chem’s dominance is its price competitiveness. It sells ammonia for 700 won to 800 won per liter, a price no other company can match.
But chipmakers such as Samsung and SK Hynix have been stepping up efforts to diversify their suppliers amid growing supply chain concerns in recent years.
The Russia-Ukraine conflict has also increased the cost of ammonium, so prices have risen, making chipmakers more concerned about steady supply than pure price.
