Samsung SDI has sold off a unit that manufactures ACF (Anisotropic Conductive Film), a key material connecting display panels and electronic circuits, to Kukdo Chemical, according to industry sources on May 24.
They said the deal was inked between Samsung and Kukdo 10 days ago on May 14, after almost 6 months of negotiations. The acquisition price is said to be between 18 – 20 billion won (US$ 15.1 – 16.8 million). Last year, Kukdo’s sales reached 1.28 trillion won, while operating profit stood at 68.6 billion won.
The move comes 15 years after the ACF unit was launched in earnest after starting out as a display material unit under Samsung’s Cheil Industries. A Samsung SDI executive who switched jobs to Kukdo allegedly helped facilitate the deal between the two firms.
Samsung SDI said the ACF unit employees will stay on. They include around 7-8 workers for R&D and 23-25 more for production lines.
Kukdo Chemical reportedly gave a nod to the acquisition based on the fact that ACF can be widely applied to smartphones, tablets and automobiles. Another reason was because it's difficult to attain significant external growth based on conventional chemical products such as polyol, epoxy and hardeners, according to market watchers.
In the latter half of 2018, Samsung concluded that the ACF unit’s sales was too small to be independent, and that it would be impossible to expand, especially since Samsung Display – its main revenue source – is bleeding money on sluggish LCD market conditions.
On average, the Samsung ACF unit has logged an average 15 billion won of revenues. The global ACF market is currently valued at around 300 billion won.