[영상] SK’s large-scale investment Yesty affiliates Yes Power Technics SiC semiconductor competitiveness

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Han: Deputy General Manager Lee Soo-hwan. Hello.

Lee: Hello. This is Lee Soo-hwan.

Han: The companies we are going to talk about today are going to talk about SK Co., Ltd. and Yesty, and Yes Power Technics, an affiliate of Yesty. Before talking, on January 24th, SK released a press release. SK will create a specialized investment company centering on the four core businesses and accelerate investment. It says here are the 4 core businesses. “Advanced materials, green, bio, digital”. There is a semiconductor and a battery on the high-tech material side. It must be clear why semiconductors and batteries are in the high-tech materials side. Are not all of the SK affiliates there?

Lee: Especially, what Chairman Tae-won Choi emphasizes is that the company called SK has held a large portion of the energy business for a long time and even now. In the end, this energy business is a crude oil business. It’s a business that generates a lot of carbon. As this business is increasingly being replaced by eco-friendliness, we have established a strategy and plan to change our business portfolio.

Han: So after making such an announcement on January 24th. Today’s filming date is January 28th. On the morning of the 28th, SK Group released a data. SK Corp. entered the electric vehicle power semiconductor market. I did this to preoccupy the future car material market. If you look at the contents, it is called SiC (Silicon Carbide). Under the goal of fostering SiC power semiconductors in the domestic ecosystem, it invests 26.8 billion won in Yes Power Technics and acquired a 33.6% stake. A 33.6% stake in 26.8 billion won is roughly 100 billion won in value.

Lee: It’s a company worth about 100 billion won.

Han: I invested in acknowledging the value. When we first saw this material, we know a company called Yesty. The data are written a little strangely, as if you just bought a stake for Kuju. Because it is not possible to know whether this is a new stock issue or an old stock. After this article came out in the morning, Yesty’s stock price fell a lot. I think I’ve been missing more than 10%. Then, as time passes, “No. We received investment by issuing new shares.” I will talk about that specific stake later. First of all, I think that SiC power semiconductors made by Yes Power Technics use silicon when we say semiconductors. What is the difference between SiC (Silicone Carbide) and Silicon?

Lee: Since it’s complicated to talk about electric, Si is silicon. I mean sand silicon and SiC is silicon carbide. In Korean, it is called silicon carbide. The crucial difference is the material difference. Due to the difference in materials, the efficiency of power conversion has been greatly improved. It is a raised semiconductor. If you think about it this way, you will understand quickly.

Han: When we switch the voltage, there is a loss.

Lee: There is a lot of loss. It happens a lot more than you think.

Han: They said there were many. Silicon loses a lot when power is reduced from a few volts to a few volts. Silicon carbide has an efficiency of almost 98%. SiC (Silicone Carbide) has such a characteristic that the loss rate is only 2% and works very well at high temperatures and at high voltages. So we know. There are no companies in Korea that do this well.

Lee: There are companies that do this well, such as Infineon. If you look closely, these companies are companies that have very strong strengths in the power business. The same is true of Japan, and companies such as Hitachi and Toshiba are doing power semiconductors. In Germany, Siemens runs the electricity business, followed by German companies like Infineon that supply it behind the scenes.

Han: In Germany there is Infineon, and in Europe, it is said that it is Europe, but STMicro is a joint venture between Italy and France. ST Micro is also very good, a company called Kree in the US and Rohm in Japan. Is it ROHM?

Lee: It’s resistance.

Han: The company is doing this well. Now that Tesla Model 3 has SiC power semiconductors, they are in the spotlight and demand is increasing. But in Korea, where are the companies that can do this properly? Looking for it like this, it looks like a place called Yes Power Technics came out and made an investment there.

Lee: If I can tell you simply, it’s easy to compare electric vehicles, but when we look at home appliances these days, we often use the terms air conditioners, washing machines, refrigerator inverters, right? Before that, constant speed motors were used. That constant speed motor is literally a frequency. When we give it a certain frequency, it rotates only at a certain speed. However, the inverter can change the frequency and adjust the frequency at will, and the power semiconductor efficiency is very important. Otherwise, we waste a lot of energy.

Han: Sometimes they turn less, sometimes they turn more.

Lee: You will play that role, but another analogy is a smartphone. DC/DC converter in smartphone. Why use a DC/DC converter? Why should I change DC to DC?

Han: It’s complicated if you go too far. If you want to use something that came in a few V, you have to change it to 3.3V, which causes a loss in the process of changing it.

Lee: There is a loss. If the efficiency improves, the device can be downsized.

Han: So, if this goes into an electric car, isn’t it possible to extend the driving time further?

Lee: Not only can it be extended further, but for example, this is also possible. Isn’t charging too important? But if you want to recharge quickly, don’t you think you have to put it in very strongly. For example more than 600V. Such is the case with the Porsche Taycan. To do that, you need to use a power semiconductor with good power conversion efficiency to accept high voltage. So, SiC has become an essential item.

Han: It’s been hot recently. In addition, a company called Yes Power Technics has the only facility in Korea to design and produce SiC power semiconductors. SK acquired the stake because it has process equipment and process technology. It acquired some shares and made investments.

Lee: It’s an investment.

Han: I made an investment. First of all, this company mixes two in Pohang, based on 100mm and 150mm, and 14,400 sheets per year. Based on wafer input. Not that many levels. It is said that it is about 140,000 electric vehicles, so it is not yet a lot of orders. Now that I hear what I’m talking about, the only thing in Korea that this company can do from design to production, and now the product lineup consists of 8 to 9 types of lineups such as SiC MOSFETs, and there are 70 types of SiC diodes. The lineup is organized according to the number of bolts (V). Actually, I seem to be talking closely with Hyundai Motor Company. Another BYD to China. BYD also uses electric vehicles.

Lee: BYD is a very unique company. BYD makes not only electric vehicles, but also electric buses and electric tractors. It is a company that does everything from the front industry to the rear industry for electric batteries.

Han: That’s why we are affiliated with Yes Power Technics. The reason why it is called an affiliate rather than a subsidiary is that Yesty owns a 29% stake in Yes Power Technics as of the end of the third quarter of last year. The owner, which is the largest shareholder of Yesty, has a 35% stake. CEO Jang Dong-bok has it. And some of the rest of the stakes are owned by employees, and Doha Kim, the CEO, also owns.

Lee: So how was this company founded?

Han: If you look for news in 2017, a company called Maple Semiconductor appeared in the media in July 2017. “Export fraud” says that the company is doing SiC power semiconductors, and it has received a lot of investment here and there, and is also making results. There is also a lot of sales. It was decided that sales came out like this by several ten billion won. That was all an export scam now. In simple terms, it’s not actual sales, it’s like China and now.

Lee: I established a ghost company and exported it there.

Han: When they received an export order there, they received bonds and sold them at a discount to financial institutions in Korea for about 400 billion won. In fact, even before that, a company named Monuel did export fraud in that way, so even if I looked at Maple Semiconductor’s cash flow statement properly at that time. The cash flow statement continued to be negative, but only sales and the income statement showed sales and performance. It was said that it was going well, but in fact, those who know well in the power semiconductor field at that time kept tilting their heads, saying, “It’s weird,” but eventually it turned out to be a fraud, so the management was arrested, and now it takes a lot of time. Flowed. But at that time, the company wasn’t without technology at all, and there was a problem at the management level, and it had the technology and patented it. There was actually a product made. So, I know that Eun-sik Jeong, who was in charge of R&D at Maple Semiconductor at the time, is now the CTO. After the management left, the technicians regrouped and the company was established in November 2017. Since I created a company, I went to get investment because I had no money and nothing I could do, but I met Yesty’s CEO Jang Dong-bok. At that time, I was also writing an article about the company under the name of Power Technics in June 2018. Can I write this before writing the article? I also leaned, saying that there would be no problem even if I wrote an article about the fact that people who had been in a company that had been cheated in the past came out and created a company. Anyway, at that time, I also went to meet many people, and I kept talking at that time, so I ended up writing an article. CEO Jang Dong-bok said, “Isn’t this a scam?” He thought this way. So, after thinking and meeting for a long time, I made an investment with my own money with the confidence that I had the technology. So at that time, nearly 60% of CEO Jang Dong-bok owned the stake. It wasn’t Yes Power Technics at that time, it was called Power Technics. At that time, there were about 20 technicians with over 30% of them, and I knew that they also owned a stake, and that CEO Doha Kim owned about 5%. After that, when the capital increase is made, Yesty also participates in the capital increase and puts in funds.

Lee: It must have been a little diluted.

Han: As of the third quarter of last year, I had a stake of about 29%. Then, the stake that CEO Jang Dong-bok had is diluted. So, anyway, before the investment from SK, CEO Jang Dong-bok and Yes Power Technics had almost 60% stake, and now they have a 33% stake. Because the company’s management rights and investments are in place, Yes Power Technics’ performance will be captured by Yesty anyway by equity method evaluation. It’s like this. But it wasn’t clear this morning, so I was disappointed that Yesty was just selling the Savior. “Issuing new stocks” But now, that is also an important issue, but now anyway, isn’t it that you have a very strong back ship called SK?

Lee: There are about 130 SK affiliates. There are also big companies like SK Hynix and SK Telecom.

Han: So, SK talked about it this time while publishing the data. While strengthening the unique competitiveness of Yes Power Technics through R&D support and facility expansion investment, etc. It was written that we will strengthen it in a timely manner, but as a second-largest shareholder and “plan to concretely create a synergy plan with the semiconductor wafer business within the group”, the semiconductor is of course talking about SK Hynix, and the wafer is .

Lee: You’re talking about Siltron.

Han: Didn’t Siltron acquire SiC wafer business from DuPont in the US for about 540 billion won early last year? So, there was a market to sell it, and Yes Power Technics actually develops their own chips, but the foundry service is also in business now. Then, I think that it is a picture of what the foundry can do only with power semiconductors by attaching it with SK Hynix.

Lee: Since power semiconductors have an analogue nature and are used in small applications such as adapters that are used in power plants, for example, in power plants, they are used in a wide variety of fields. In the presence of SK Hynix, if a product called power semiconductor is added, it can become a very unique type of integrated semiconductor company.

Han: And it is said to be an affiliate of Yesty. In the case of Yesty, in fact, Yesty has a lot of transactions with Samsung Display, and it mainly deals with foldable autoclave equipment and this company mainly deals with heat treatment equipment related to heat. In fact, in 2017, Samsung Display made a great deal of performance as it carried out foldable post-processing equipment. It was about 150 billion won in 2017. I also have semiconductor equipment here, but the proportion of displays was large. However, it has a large deficit of 92.1 billion won in 2018 and 53.4 billion won in 2019. Because Samsung Display didn’t have much investment.

Lee: Right. There wasn’t much investment.

Han: Some investments have resumed since last year, and I think it will increase slightly this year. According to the reporters of The Elec, we found that sales increased by about 30% last year and profits and profits turned to black. Seeing that you have a business plan this year, your investment will increase by about 30%, right? It seems that I have set an internal goal to grow about 30% of sales. The company also had a brief ups and downs, but it turned around last year and will continue to grow this year. Also, I wondered if the affiliates would also have an opportunity to meet SK, a strong support group, to collaborate with other global automakers for sales or technology development. In addition, because Yesty also does semiconductor equipment, if it receives strategic investment from SK Group, people generally analyze whether there will be an opportunity for a transaction to take place in the SK Group as well as the subject of the investment.

Lee: Isn’t the electric vehicle market so hot these days? There is also a story about Apple. The fact that Yesty entered such a hot market is a result of proactive investment in good markets.

Han: I’ll be here today. thank you.

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