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POSCO Acquires Stake in Specialty Gas Firm Fuum: Will It See 'Semiconductor Effect'?

[비즈한국] It has been confirmed that POSCO, the operating company of POSCO Group, recently invested in the specialty gas firm Fuum. The move is interpreted as an effort to strengthen its gas business. POSCO has been showing increasing interest in the specialty gas sector lately. The business community is watching closely to see if POSCO Group's efforts to diversify its business portfolio will bear fruit.

POSCO recently acquired a 40% stake in Fuum. Fuum’s primary products are specialty gases for semiconductors. According to its audit report, Fuum recorded 26.6 billion won in revenue and 700 million won in operating profit last year. While the company is not large compared to POSCO, its revenue is on an upward trend, and it has potential, as evidenced by its strategic partnership with China’s Xingfa Group last year.

There are many types of specialty gases, but the energy industry is particularly focused on those used for semiconductors. Semiconductor manufacturing requires high levels of quality and process precision, necessitating high-purity, customized gases produced through advanced manufacturing processes. With high global interest in semiconductors, attention is also shifting toward specialty gases used in the industry.

POSCO Group has been interested in specialty gases for some time. POSCO Zhongtai Air Solution, a joint venture between POSCO Holdings and China’s Zhongtai Cryogenic Technology, began construction of a high-purity rare gas plant in Gwangyang, Jeollanam-do, in November last year. The rare gases produced there are expected to be used primarily in advanced industries such as semiconductors, displays, and satellite propulsion fuel. Lee Hyung-soo, Head of POSCO's Business Planning Division, stated at the time, "Starting with the production of high-purity rare gases, POSCO Group plans to expand its industrial gas business portfolio, including specialty gases utilizing steel mill by-products and the supply of oxygen and nitrogen for secondary battery material production."

In July of this year, POSCO acquired a 100% stake in Chemgas Korea. Chemgas Korea is also a manufacturer and seller of specialty gases, and synergy with Fuum is anticipated. However, POSCO has not acquired management control of Fuum, and as the equity investment is a recent development, no specific roadmap has been announced. A POSCO official stated, "As part of our business expansion, we intend to broaden our portfolio in the specialty gas sector and establish a growth foundation for our industrial gas business."

POSCO Group has been conducting energy business through its existing affiliate, POSCO International047050, but its focus is on liquefied natural gas (LNG) and gas field development, which are different fields from the specialty gas business.

The energy industry views the outlook for specialty gases positively. Park Sung-soon, a researcher at the Korea IR Council, said, "Demand for specialty gases is expected to grow steadily alongside the trend toward miniaturization and higher stacking in semiconductor technology," adding, "The global specialty gas market is projected to reach $26.58 billion (approximately 38.99 trillion won) by 2032, growing at an annual average rate of 8.8% from $13.71 billion (approximately 20.11 trillion won) in 2024."

However, it is difficult to be overly optimistic about the future as competition is expected to be fierce. In South Korea, companies such as SK Specialty, Hyosung Neochem, and Wonik Materials104830 have already entered the specialty gas market. These companies are significantly larger than Fuum or Chemgas Korea. Furthermore, if Chinese firms are included, competition will intensify even further. It is expected that POSCO Group will need significant investment to compete with these players.