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"Our solution was so unique that it changed the existing CIS production process"

Interview - June 28, 2023

With a business model centered around innovation, Korean firm MTI, a leading developer of materials and chemicals for the semiconductor industry, has developed a unique coating solution to drastically increase the yield of CMOS Image Sensors (CIS) production.

MR. JAMES PARK, PRESIDENT OF MTI CO., LTD.
MR. JAMES PARK | PRESIDENT OF MTI CO., LTD.

As South Korea continues to grow into a key global player in critical technologies, such as semiconductors and advanced machinery, critics claim that the country might eventually find itself ‘sandwiched’ between new and established manufacturing powers or that it will be incapable of creating a supply-chain less reliant on foreign technology. What is your assessment of the strengths of the South Korean industry today? And of the challenges the industry faces?

I would first like to give you some background on the connections that exist between Korea and other manufacturing nations. The growth of the Korean industry was rapid throughout the 1980s and accelerated even more after Korea joined the WTO in 1995. Six years after, China also joined the WTO. After China joined the WTO, international companies began relocating their factories to China. This meant that the equipment and technology of advanced industries, such as Japan and the U.S., were now located in China where they were made available to the market. The relocation of equipment and technologies meant that there now was a gap in the supply chain for the production of semi-finished products. Korean firms filled this market gap which helped the Korean industry to grow at a rapid pace.

During the COVID-19 pandemic, the global supply chain experienced semiconductor shortages. This disruption threatened China's economy and industry, especially as various Chinese companies are unable to maintain their businesses if they do not have access to system semiconductors. Furthermore, the consequences of the current political tensions between the U.S. and China, especially the sanctions on exports of equipment and materials to make 10 nanometer chips, also weakens the Chinese supply chain.

Roughly speaking, semiconductors can be split into 2 groups: memory semiconductors and system semiconductors. Currently, China has the technology to manufacture system semiconductors at a width of 14 nanometers. When it comes to memory semiconductors, they produce at the 28 nanometers level. In contrast, Korea can produce system semiconductors at the 3 nanometer level and our memory semiconductors are now close to 14 nanometers. This statistic embodies the difference in technology between the two countries.

I believe that the U.S. does not care if China manufactures 14 nanometer system semiconductors or 28 nanometer memories. However, the United States does not want to see China capable of achieving greater technology. This political tension is an opportunity and a strength for the Korean semiconductor sector as it slows down a competitor.

The recent export ban of advanced materials and equipment to China also proves that. Do you think that the total amount of semiconductors will change? Personally, I expect to see an increase in production as many chips currently produced in China will soon be manufactured in the U.S., Taiwan, and Korea. America is trying hard to create a semiconductor paradise, as embodied by the large investments made in Arizona. South Korean foundries are following suit, with Samsung and SK Hynix having announced large investment plans to increase fab capacity.

Following important chip shortages experienced during the COVID-19 pandemic, the world’s leading semiconductor foundries have doubled down on investments. During 2021 and 2022, 29 new semiconductor foundries began construction across the globe. What opportunities does this global increase in semiconductor production represent for MTI?

While the world doubling its semiconductor production capacity presents an opportunity for us, we must find an effective strategy to connect our company to new foundries to benefit from the situation.

When looking at new markets, one of the key strategic features to analyze is the national policy of each country. In our industry, I do not think that a company can singlehandedly expand in a market. To be successful, a company’s oversea expansion must be supported by an appropriate political and regulatory environment. Changes in regulations can, from one day to the next, either block a company’s activity or help it to grow. Understanding this dynamic is paramount.

To give you an example of the importance of national policy: Before COVID-19, our industry knew no borders. With a simple phone call, I could bring material or equipment from the US, EU, and Japan in a matter of days. In 2018 however, the former administration of Japan, then led by Prime Minister Shinzo Abe,  imposed trade sanctions on Korea, effectively blocking Korean firms from importing certain advanced materials and equipment required for semiconductor production. While this trade friction led to more clearly defined borders, it also provided the Korean industry with an interesting opportunity. This conflict highlighted the fact that while Korea had companies to make advanced semiconductors, it lacked corporations that could produce certain equipment and materials. This realization led the Government to increase its support to companies in our field, which allowed us to grow at a fast pace. Ever since Japan's sanction in 2018, the Korean government has decided to strengthen the country’s supply chain by providing important assistance to equipment and material makers.

Five years after this trade friction, what is your assessment of the progress made by the South Korean industry to lessen its dependence on imported materials and equipment?

Do you think that 5 years is enough to come up with technologies that can fully replace foreign ones? How long do you think it took to develop EUV technology? In the semiconductor industry, 5 years is not enough time to come up with meaningful advances. That being said, the support of the government will allow us to advance fast. By actively relaxing regulations and lifting sanctions, the Government has the power to meaningful strengthen the national semiconductor supply chain. In all honesty, without a Government capable of providing an adequate business environment, not a lot can happen. This is why understanding government policy and the connection between the public and private sectors is important when looking at international markets.

The changes brought about during the COVID-19 pandemic are providing Korean makers with an opportunity to become leading suppliers of semiconductor equipment and materials.

For MTI, what markets have the highest growth potential?

MTI’s core area of expertise is in CMOS Image Sensors (CIS semiconductors). As part of a private-sector investment plan supported by the Korean Government, Samsung announced that they would invest 300 trillion KRW (230 billion USD) over the next 20 years to become the world's top system semiconductors maker in the world. Part of this investment will deal with CIS, where our strength, expertise, and focus reside. Most of our future strategies, both domestically and internationally, are centered around the development of CIS technologies.

Can you tell us more about your personal story, and why you decided to establish MTI?

I started my career working as a process engineer for a technology company. Back in the day, you could go on the rooftop of the office to smoke. From up there I could see all the suppliers and the cars they drove. Working for a company, I often thought about moving to a different firm or starting my own business. When I was thinking about opening my own business, I wanted to start something that would allow me to have the nice cars that the suppliers drove!

When you start something new, you have to follow a logical sequence of events. First, you need to figure out in which area you may be successful. Then, you need to analyze if you are indeed capable of doing that type of work. Once you start, your thoughts then need to evolve from "can I do it?" to "I must do it!". After that evolution takes place, it becomes important to differentiate between “what I can do” and “what I must do.” Looking back at the past, I think I was lucky to understand the importance of respecting this sequence.

The turning point occurred when I successfully found the area that worked for me. This allowed me to start with something I was good at. In 2008, my thinking evolved from “I can do this” to “I must do this,” and that was another important moment. I started dealing with chemicals and my very first product was Hyper-Pro®, a Wafer Blade Sawing Solution utilized during the dicing process.

After the wafer exits the foundry, the next fabrication step is called wafer backgrinding, at which stage wafer thickness is reduced to allow for stacking and high-density packaging of ICs. Once this step is completed, we move to the dicing process, where the wafer is sawed and each individual chip cut out.

Back in the day, one of the main reasons for low semiconductor production yield was the appearance of foreign particles during that process. To a large extent, this problem still remains to this day. In 2008, we discovered that chemicals could reduce the number of foreign particles during the dicing process, effectively increasing production yield. With the help of detergent and cleaning chemicals, we could suppress the creation of particles even further.

As such, I began by importing chemicals from Taiwan. As the needs of my clients became more diverse, especially as each customer required something slightly different from the other, I soon realized that my suppliers could not answer quickly enough to these demands. In 2009, I therefore decided to make my own products.

With technological advancements, the architecture of semiconductor and electronic devices is becoming increasingly complex. As devices become finer and more layered, the types and shapes of foreign substances that can disrupt production are growing more diverse. This trend is presenting challenges to the development of coating materials, which serve to temporarily protect device surfaces, and is increasing the importance of cleaning processes and chemicals. How are these challenges impacting the product development strategy of MTI?

Technological advances allow us to evolve. The semiconductor industry has always been in a perpetual state of evolution. Honestly, it will never stop advancing and there always will be more things that we have to control.

To remain competitive, our products must evolve in tandem with the market. Our first product, Hyper-Pro®, has lived through numerous evolutions and will continue to do so. Our ability to adapt to the evolution of the market is the reason why our cleaning chemicals enjoy a 90% market share within South Korea.

MTI has a strong company identity that is taken from my obsession with uniqueness and with being the only one. If you compete against others, you will fight to become first, second, or third. In comparison, if you manage to create your own business or your own niche, you will always be the best. This obsession with uniqueness is how I turned MTI into what it is today. I always tell my employees that leaders do not become leaders by miracle. Rather, they cultivate their uniqueness.

MTI currently has two business models. The first one is to develop unique solutions. The second is to acquire a monopoly on a niche technology that already exists. For example, following the trade sanctions between Korea and Japan, we developed the Korea-version of a material that used to be imported from abroad.

We also provide coating materials and cleaning chemicals. To this day, no other company produces these materials as our solution was so unique that it changed the existing CIS production process. This unique solution series is composed of two products, namely a coating material and a peeling technology.

Before the backgrinding process, the wafer must be coated with a material that can handle a pressure equivalent to 3 tons and that is strong enough to resist the dicing process. As such, increasing the yield of production is only possible if the coating material can resist.

If you coat the wafer before the backgrinding and dicing process, aren’t you creating a new challenge as the coating material must then be removed and cleaned?

It should create a challenge, but that is exactly where our technology comes in! When the wafer goes through the backgrinding process, we attach a special tape equipped with a unique adhesive material to further protect the wafer from silicone particles. Right before the last stage of production, which is called Automated Visual Inspection (AVI), where the production yield is calculated, we apply our unique cleaning material to seamlessly get rid of the coating that was previously applied.

For memory semiconductors, the usual production yield is around 99,5%. For CIS, the yield used to hover around 40% and could occasionally drop to 0%. After we applied our special coating material the production yield increased to 99,9%, which is higher than for memory semiconductors. When we showed that technology to Samsung,  they had an orgasm!

How do you market your technologies to new clients?

Many of our sales are conducted through agencies. Because there are only two global CIS manufacturers, namely, Samsung and Sony, the deal that I previously discussed was conducted differently.

Because CIS is a field showing great possibilities, Samsung will not just seek to focus on producing CIS for mobile phones. Not long ago, Elon Musk told the media that TESLA will be using CIS for their vehicles, meaning that autonomous driving technology will be developed using CIS.

If Samsung is willing to invest 300 trillion KRW in new foundries, it is because their focus is not only on mobile phones anymore. They are going to expand their focus on security, autonomous driving, and AI; three areas where CIS technology can be applied.

How do you see the future of your company?

Because we can never predict what will happen in the future, I do not plan to focus on a specific technology. Now is not the time to focus on planning, rather, it is time to focus on responding to changes in the market. As a company, having that sensitivity is key. So while I have no clear goals for now, we do have an agenda that is mainly centered around staying unique.

Based on this philosophy, we will pursue two options. We will either develop unique technologies that belong to a path that no one has walked before, or we will create alternatives to products that have a niche dominance in the market.

While MTI is known as a manufacturer, I consider us a Tech-company wrapped in a manufacturing outfit. For example, while we do have our own chemical production lines, we utilize OEMs for tapes and similar products. Another core value we have is partnerships.

Is there a personal goal that you would like to accomplish?

When you ask people what kind of life they want to live, they often give you the ordinary description of a life that is righteous and good. The truth, however, is that people should want to live the life that they really want to live.

Personally, I do not care if the life that I want is good or righteous in the eyes of others. Rather, I want to live a life that I have sincerely chosen. I want to live a life where I can say that I have everything that I truly want. This concept is called “Homo Ludens,” and I believe this to be the only way to confirm the reason for my existence.

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