|Kai Beckmann, CEO of Merck Electronics, and Wookyu Kim, managing director of Merck Korea, inspect the company's facility in Sihwa, Gyeonggi Province, Oct. 7. Courtesy of Merck Korea|
By Baek Byung-yeul
Germany-based Merck has contributed greatly to the development of high-tech industries such as semiconductors and displays, providing electronic materials to prominent tech companies in the global market.
In particular, Merck's electronics business sector has been strengthening ties with the high-tech sector in Korea, a powerhouse in the semiconductor and display industries. These efforts are in line with the Korean government's "K-semiconductor" strategy, which is aimed at establishing the world's largest semiconductor and display supply chain by 2030.
On Oct. 7, Kai Beckmann, CEO of Merck Electronics, visited the company's facility in Korea and announced a massive investment of 600 million euros ($693 million) into the electronics sector by 2025.
The CEO of Merck's electronics business said the company has decided to increase its investments here to beef up cooperation with Korean companies that are gradually expanding their production capacity for semiconductors and OLED displays.
"Korea is one of the leading countries in technology and one of the most important customers worldwide. We want to be very close to our customers in Korea and this is why we invest in Korea and try to serve them as close as possible," the CEO told The Korea Times during an interview in Seoul, Oct. 8. "Six hundred million euros is a huge number if you compare that to our total investment, which is not small."
The company said Korea is one of its key focus countries for investment in electronics. Such an investment is an essential part of the business sector's "Level Up" growth program, which seeks growth opportunities that come along with significantly accelerating global demand for innovative semiconductor and display materials.
Merck believes that this soaring demand is driven by the exponential growth of data use and new technologies, such as the internet of things (IoT) and 5G. Thanks to these changing trends, Merck's electronics business is aiming for a compound average growth rate of 3 percent to 6 percent between 2021 and 2025.
The CEO said that increasing investment in Korea is in line with the company's business strategy for a post-pandemic world.
"The global megatrend of evolving digitization and data growth has been expedited by COVID-19, which has triggered some long-lasting changes in consumers and enterprises' digital behavior. These growing trends confirm that there will be future growth in the semiconductor and display businesses. Both Merck and Korea are well-positioned to contribute to its innovations," Beckmann said.
"We recognize that Korea is a big driving force in the electronics industry, and Korean display and semi manufacturers are among the leading players in our industry. Our strategy is to be the company behind the company, supporting Korea's electronics industry to continue to excel in the next data-driven megatrends," he said.
The CEO added that Merck's investment can be interpreted as a localization strategy being pursued in Korea to respond actively to demand from customers here.
"The 600 million euro investment announcement demonstrates that we are very much interested in localizing our core supply chain. For several reasons, we have to be fast in responding to customers' needs. Second, of course, we need to become more independent from supply chain struggles," he said. "The more you localize, the less you are exposed to these kinds of challenges."
As part of Merck's effort to enhance cooperation with Korea, Beckmann also had a meeting with the industry minister to discuss the nation's high-tech industry vision and ways to secure a stable supply chain for high-tech materials.
Industry Minister Moon Sung-wook said after meeting with Beckmann, Oct. 8, "The investment from Merck will allow Korea to secure a stable supply chain for semiconductor materials, advanced technologies and skilled labor."
"Merck's investment in Korea will be a win-win for Korea in terms of securing stable supply chains, advanced technologies and manpower, and Merck will also establish stable business relationships with companies here," Moon added.
Merck established its Korean subsidiary in 1989 and operates 11 research and production sites here. The company's Korean branch has 1,350 employees in electronics, healthcare and life sciences.
|Kai Beckmann, CEO of Merck Electronics, speaks during an interview with The Korea Times at the Grand InterContinental Seoul Parnas hotel, Oct. 8. Courtesy of Merck Korea|
Achieving carbon neutrality by 2040
With regards to environmental, social and corporate governance (ESG) management, which has increasingly emerged as a set of core values for achieving sustainable growth, Beckmann emphasized that ESG principles have always been part of Merck's business strategies.
"Sustainability has always been a very important topic," he said, saying that the company will achieve climate neutrality by 2040 and reduce its resource consumption.
Among the company's business divisions, Merck Electronics wants to contribute to the sustainability of material innovation, he added.
"We believe that this sustainability can be realized with our accumulated scientific knowledge and responsible entrepreneurship. In that sense, energy efficiency and green technology, the biggest issues for sustainability, are important keywords for us, and provide an important direction for the development of the materials we are providing," he said.
As one example of a way the company has tried to improve in terms of ESG standards, the CEO introduced its ultra-brightness fringe field switching (UB-FFS), a display technology that enhances any device with a brighter display, longer runtime and better viewing angles.
"Our UB-FFS technology is a good example. UB-FFS is a liquid crystal technology that has been commercialized in smartphones and tablets, but has recently expanded its application to large TVs. UBplus, this extended technology, is a liquid crystal technology required to meet energy efficiency guidelines as TV resolutions increase from 4K to 8K.
"Our UBPlus technology improves luminous efficiency by 15 percent compared to IPS or FFS LC technology. As a result, energy consumption and CO2 emissions can be reduced. If all the TVs in the world were operated with 15-percent higher light efficiency, we could reduce CO2 emissions by the equivalent of 900 airplanes annually," he said.