SK Ecoplant is set to significantly bolster its semiconductor value chain by incorporating two key subsidiaries, a global semiconductor module company and an industrial gas company, as part of its strategic expansion.
Industry sources revealed on August 23 that SK ecoplant unveiled a comprehensive blueprint last month aimed at strengthening its business portfolio through the internalization of high-quality assets.
This strategic move aligns with SK Group’s broader rebalancing strategy, which focuses on enhancing its technological and environmental capabilities. The core of SK ecoplant’s plan involves the incorporation of “Essencore,” a semiconductor module company, and “SK Materials Airplus,” an industrial gas company, as subsidiaries. The incorporation process is expected to be completed within the year.
Essencore, headquartered in Hong Kong, is renowned for manufacturing and selling memory products such as DRAM memory modules, SSDs, SD cards, and USBs worldwide. Since 2015, Essencore has built a familiar image among the public by sponsoring the e-sports team “SKT T1” through the KLEVV brand. This sponsorship has helped Essencore establish a strong brand presence in the competitive e-sports market.
SK Materials Airplus, on the other hand, specializes in the manufacture and supply of industrial gases such as nitrogen, oxygen, and argon, which are essential for the semiconductor industry. The company is evaluated to have a stable profit structure due to its business model of long-term supply of industrial gases and liquefied carbon dioxide.
To facilitate this incorporation, SK will participate in a third-party allotment paid-in capital increase by contributing 100% of the shares of S.E.Asia, an investment purpose company that owns Essencore, to SK ecoplant as an in-kind contribution. In exchange, SK ecoplant will issue new shares for 100% of the shares of its subsidiary SK Materials Airplus.
Industry sources highlighted the potential synergies that could arise from this strategic move. “Essencore can create synergy by refurbishing and selling memory components collected by SK tes or by having SK tes collect and recycle electronic and electrical waste (E-waste) from related companies through ITAD services,” one source noted. SK tes, a subsidiary of SK ecoplant, has the largest global presence in the ITAD and electronic waste recycling sectors, with 46 locations in 23 countries. In March, SK tes completed a hyperscale data center-dedicated ITAD facility in Virginia, in the U.S. further solidifying its market position.
The combination of each company’s global network capabilities and logistics channels is also expected to enhance their business operations. “The synergy between SK ecoplant’s EPC solution capabilities and the construction and operation of industrial gas manufacturing plants is anticipated,” another industry source commented. SK ecoplant, with its strength in EPC (Engineering, Procurement, and Construction), can expand its business by taking on semiconductor EPC projects.
The market has responded positively to SK ecoplant’s external expansion. Earlier this month, during the demand forecast for the public corporate bond issued, funds amounting to eight times the target amount were raised. This strong financial backing underscores investor confidence in SK ecoplant’s strategic direction.
SK ecoplant has also demonstrated robust financial performance, with cumulative sales for the first half of this year amounting to 4.267 trillion won, an 8.6% increase compared to the previous year. The company has successfully increased the proportion of new business revenues, including environment and energy, to over 30% within three years of entering the environmental industry.
