On March 10, 2025, the South Korean semiconductor industry witnessed a significant acquisition event: SK Keyfoundry announced its plan to acquire 98.59% of the shares in SK Powertech from SK Inc. for KRW 25 billion. The acquisition is expected to be completed in the first half of 2025, subject to regulatory approval.

Background and Company Profiles

SK Keyfoundry is a company specializing in 8-inch wafer foundry services. It was spun off from Magnachip Semiconductor in September 2020 and became a subsidiary of SK Hynix in August 2022. The company has been committed to expanding its foundry business, particularly in the development of gallium nitride (GaN) process technology, where it has made significant progress.

SK Powertech, formerly known as Yes Power Technics, was acquired by SK Inc. in 2022. The company is renowned for its expertise in the design and manufacturing of silicon carbide/SiC power semiconductors. SiC power semiconductors are highly valued for their durability and efficiency, especially in high-power and high-temperature applications, making them an ideal choice for electric vehicles and renewable energy systems. According to global market research firm Omdia, the SiC semiconductor market is expected to grow rapidly at an annual rate of 31%, reaching USD 23 billion by 2030.

Strategic Significance of the Acquisition

The acquisition comes at a time when the utilization rate of the 8-inch wafer foundry market is increasing, providing SK Keyfoundry with an excellent opportunity to enhance its competitiveness. By integrating SK Powertech's SiC technology with its own semiconductor mass production capabilities, SK Keyfoundry aims to create significant synergies. The CEO of SK Keyfoundry stated, "This equity acquisition is aimed at strengthening our competitiveness in next-generation compound semiconductor business. We believe that SK Keyfoundry, with its expertise in semiconductor mass production, can create synergies with SK Powertech, which possesses SiC-based power semiconductor technology."

Moreover, the SK Group has already vertically integrated a SiC industry chain centered around "SK Siltron (SiC substrates) → SK Powertech (SiC devices) → SK Signet (electric vehicle chargers)." This acquisition will not only help SK Keyfoundry expand its business scope and enhance its technological capabilities but also provide strong support for the SK Group to build a complete SiC industry chain.

Market Prospects and Challenges

Despite the promising market outlook, SK Powertech has faced some challenges in recent years. Due to the slowdown in the demand for new energy vehicles, the company's performance has declined. According to financial reports, from 2022 to 2023, SK Powertech's operating losses increased from KRW 11 billion to KRW 20.3 billion, while its revenue decreased by 43.4% during the same period. However, SK Keyfoundry remains optimistic about the long-term growth potential of the SiC power semiconductor market and believes that its technological capabilities and resource integration abilities can help SK Powertech overcome difficulties and achieve sustained growth.

After the acquisition is completed, SK Keyfoundry plans to integrate SK Powertech's SiC power semiconductor technology with its own foundry business to create a new specialized power semiconductor foundry. This will provide customers with more comprehensive and efficient services and further enhance SK Keyfoundry's competitiveness in the next-generation compound semiconductor business. Additionally, with the continuous development of the electric vehicle and renewable energy markets, the demand for SiC power semiconductors is also growing rapidly. Through this acquisition, SK Keyfoundry will not only consolidate its position in the semiconductor industry but also lay a solid foundation for future market competition.

Conclusion

SK Keyfoundry's acquisition of SK Powertech for KRW 25 billion is a significant step in its semiconductor business. The acquisition will help SK Keyfoundry expand its business scope, enhance its technological capabilities, and inject new vitality into future market competition. It also provides strong support for the SK Group to build a complete SiC industry chain. With the completion of the acquisition, SK Keyfoundry is expected to achieve greater breakthroughs in the SiC power semiconductor field and offer more competitive products and services to the global market.

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