Vice chairman Won Jin leading the deal
Agreement with Mujin's customer SK Hynix needed
Equipment maker SFA is looking to acquire Mujin Electronics’ wafer cleaning equipment business, TheElec has learned.
SFA is attempting to widen its fab equipment portfolio from the back-end to the front-end.
The acquisition will also allow the company to reduce reliance on its display and battery production equipment further.
The deal is being led by SFA vice chairman Won Jin. However, as Mujin had had a long relationship with SK Hynix, SFA will need to reach an agreement with the memory giant for the deal to pull through.
SFA was formed in 1998, when the automation business unit split off from Samsung Aerospace.
The company offers smart factory solutions as well as display production equipment, its main business, and recently expanded into battery production equipment.
Its semiconductor equipment business currently accounts for a smaller portion of its revenue than its display equipment business. SFA has been developing over head transport (OHT), and its subsidiary SFA Semicon also manufactures semiconductor packaging equipment.
SFA Semicon was formed when SFA acquired STS Semiconductor & Telecommunications from Bokwang Group in 2015. In the first quarter this year, SFA Semicon recorded 139.7 billion won in sales, a 39% increase from a year ago.
SFA vice chairman Won behind semiconductor push
Vice chairman Won is the second son of Won Jong-mok, the current chairman of DY Holdings and founder of Dongyang Elevator. The younger Won went to Waseda University of Japan and Brown University in the US where he studied economics. He started working for the company in the early 2000s. He owns 100% shares of DY Holdings, the parent company of SFA.
The vice chairman had chosen semiconductor related businesses as the group’s future growth engine since he became the leader of the group, people familiar with the matter said. Won was the one who led the acquisition of STS. He had said at the time that the reason why the company was entering the semiconductor market was because it needed a stable profit-making business compared to the display equipment business that were sensitive to market conditions.
Won is also known for his friendship with Samsung Electronics vice chairman Lee Jae-yong. The pair both went to Kyeongbuk High School and are known to be close personally. This close ties allowed SFA to have long business relationships with Samsung Electronics, Samsung Display and other Samsung affiliates.
Mujin Electronics sells wafer cleaners, fab equipment and semiconductor devices. Last year, it recorded 355.3 billion won in sales. Its customers include Samsung Electronics, Samsung Display and SK Hynix. It is one of four official retailers for Samsung’s electronic components. Mujin mostly sells its cleaners to SK Hynix.
SK Hynix also needs winning over for deal
Mujin Electronics were initially not welcoming over SFA vice chairman Won’s overtures for the deal. However, the atmosphere has recently.
This is because Mujin’s relationship with SK Hynix has turned sour. In January, prosecutors in South Korea arrested an Mujin executive for allegedly leaking SK Hynix’s semiconductor manufacturing and cleaner technologies to a Chinese rival. His guilt remains proven but the incident has damaged the relationship between Mujin and SK Hynix.
However, SK Hynix currently has around 350 to 400 cleaners made by Mujin at its fabs, the people said. SK Hynix is finding it difficult to find a different supplier for the cleaners. Tes and KCTech has been considered replacements for the cleaners, but they are yet to report any results with SK Hynix.
For Mujin, selling its cleaner business will allow it to reduce long-term risks, while SFA will be able to expand its semiconductor business areas.
Vice chairman Won has been very aggressive and the acquisition process was going well, but he will still need to negotiate with SK Hynix for terms, a person with direct knowledge of the matter said.
A SFA spokesperson declined to comment on the matter.