GigaLane’s dominance in semiconductor and RF industries shows technological excellence
Arrival of Jang Il-jun as CEO of South Korean company has seen it streamline itself into two main businesses and focus on increasing profitability
[Country Business Reports interviews and articles by Discovery Reports www.discoveryreports.com]
Listed on the Korean Securities Dealers Automated Quotations, GigaLane is a US$100 million South Korean company running three businesses – semiconductor equipment manufacturing, semiconductor equipment trading and high-frequency radio frequency (RF) connectivity products manufacturing.
GigaLane has a 60 per cent share in the global light-emitting-diode (LED) etcher market, making it the world’s No 1, and is the only company in South Korea able to manufacture RF cables and connectors exceeding 6GHz, which will be used as the main frequency bandwidth in the fifth-generation wireless systems (5G) telecommunications. It is ideally positioned to ride the current wave of huge demand for semiconductors and LEDs, and the 5G telecommunication infrastructure upgrade set to start this year.
GigaLane’s customers include South Korea’s premier companies, such as Samsung Electronics, and more than 200 foreign companies including GLOBALFOUNDRIES, NXP Semiconductors, Boeing and Nokia.
As a global company, GigaLane secures more than two-thirds of its sales from its exports. To expand on this success, GigaLane focuses heavily on research and development (R&D), allocating 20 per cent of its total revenues evenly between capital expenditures and R&D. The result has led to close to 300 patents and more than 200 world-leading products under development.
GigaLane was established with high-frequency bandwidth RF connectivity technology exceeding 40GHz, an area no other South Korean company had tackled.
As the country’s only company with high-frequency bandwidth RF connectivity, it grew by leading the market in smartphones, network infrastructure and defence aerospace RF components.
In 2006, it acquired Maxis, a company with semiconductor etching technology, and entered the semiconductor equipment market. GigaLane successfully launched a series of products, such as through-silicon-via (TSV) and LED etchers, and nano-imprinters, being the first to market among South Korean companies thanks to its corporate spirit of challenging technology. It is now a powerhouse in the global LED etcher market, with a 60 per cent market share.
The company faced lagging sales due to slow growth in smartphones, which was the main market from 2015 to 2016, and delays in proceeding with new projects, such as micro electromechanical systems.
But after new CEO Jang Il-jun joined the company last April, the seven businesses were streamlined into two main businesses – RF and semiconductor etchers – and GigaLane focused on increasing profitability. As a result, GigaLane returned to profitability last year with record high sales.
“This turnover is not just a one-time success,” Jang says. “It refers to a long-term and structural business model change. We will put our utmost efforts on growth in 2018 as a stable and sustainable profit model is secured.”
Semiconductor equipment manufacturing business
GigaLane’s semiconductor equipment manufacturing business already has taken a leading role in the market. Its LED etcher claimed the No 1 position in 2012, capturing 60 per cent of the global market and securing a majority of LED companies as its customers, including Sanan Optoelectronics, Osram, and Seoul Semiconductor.
Orders last year reached more than US$50 million backed by its enormous market-dominating power in the LED etcher market, which recently started to regrow with explosive growth in demand. The company also secured more than 80 per cent of sales from China, the largest LED manufacturing nation. Moreover, GigaLane did not stop with the success of the LED etcher. It launched nano-imprinters for LED, and plans to maximise outcome creation in the LED equipment market.
The nano-imprinter is a piece of equipment that substitutes the existing patterning process using a photo lithography method. It has outstanding productivity – three times greater than the conventional process.
This advantage will be noticeable, in particular, in the 6-inch (15.2-centimetre) wafer production process, to be introduced in the industry this year, which will reduce processing costs per wafer by 40 per cent.
GigaLane’s semiconductor equipment manufacturing business also produces TSV etchers for semiconductors. TSV is a 3D integrated circuit (3D IC) core technology that exponentially enhances semiconductor chip performance by 3D-stacking chips. It has been developing TSV etchers for more than a decade, and commercialisation has been possible through continuous testing with global integrated device manufacturers.
“TSV is a highly promising technology,” Kim Hyun-je, head of GigaLane’s strategic planning office, says. “The entire semiconductor industry has been debating since 2010 about the right time to adopt this revolutionary technology. We now see that the TSV era is finally coming, and we are ready.”
GigaLane’s semiconductor equipment manufacturing business will intensify its share in the growing LED etcher market and, at the same time, maximise growth potential by commercialising nano-imprinters and TSV etchers.
Semiconductor equipment trading business
GigaLane acquired and merged with South Korea’s No 2 semiconductor equipment trading company last November to broaden its presence in the semiconductor equipment market.
The semiconductor equipment trading market is booming with facility investment expansion due to the fast-growing demand for semiconductors. The East Asian market, especially China, is rapidly growing with the government heavily subsidising facility investments. The market size is expected to reach nearly US$1 billion in 2020.
With regards to the company’s semiconductor equipment trading business, GigaLane has the distinct advantage of providing a turnkey service, which covers all of the processes necessary in building a customised fabrication facility.
Kim recalls one customer in China who wanted to set up a facility for making gyro sensors. With support from its seasoned engineers, GigaLane was able to configure the necessary equipment, design the fabrication lines, identify equipment suppliers, ship the different pieces of machinery to China and install them. The company is one of the few outfits worldwide that can deliver all these services under one roof.
GigaLane’s other strength is its own solid sales pipeline. Already working with numerous prominent global semiconductor companies, including GLOBALFOUNDRIES and NXP Semiconductors, it is discussing order amounts for this year with major semiconductor players around the world.
“GigaLane’s semiconductor equipment trading business is forecast to enter full-fledged growth in 2018 with the thriving market and a differentiated business model,” Jang says. “Our goal is to become the No 1 player in the East Asian market in 2020.”
High-frequency RF connectivity business
A pioneer in high-frequency RF connectivity technology in South Korea, GigaLane provides core RF connectivity components and solutions for fast-evolving wireless communication and network infrastructure utilising its high-frequency RF technology.
GigaLane has been steering 4G telecommunication technology expansion for the past decade with the world’s largest mobile partners. Once again, in the forthcoming decade, GigaLane will ride the wave of global 5G RF connectivity investments estimated to total US$10 billion in 2020.
Compared with the 4G era, 5G requires many changes. From mobile device components to network infrastructure and design, all should be changed to using high frequencies exceeding 10GHz. GigaLane is the only company in South Korea that can provide this high-frequency RF connectivity solution.
“Because we started our business from 40GHz, it is easy for us to provide our clients with the solutions they need to handle the surge in data speed and traffic that come with using the 5G framework,” Kim says. “We expect data usage to multiply far beyond the demands of 5G. As such, we are now focusing our research on the 100GHz range.”
As mobile devices adopt high-frequency RF technology, RF cable and antenna inside the devices face structural limitations in performance.
To overcome these limitations, GigaLane provides flexible RF connectivity (FRC), which is the next-generation RF solution using flexible printed circuit boards. GigaLane is one of only two companies in the world with FRC technology patents, and GigaLane’s FRC solution is expected to be 5G mobile devices’ core RF connectivity component.
In network infrastructure, GigaLane partners with leading global companies to develop key 5G RF connectivity solutions, including board-to-board connectors, antenna modules and low-loss cable solutions. It is expected to benefit handsomely as a provider of total RF connectivity solutions for 5G handsets and 5G infrastructure products.
Vision for next three years
The semiconductor equipment and high-frequency RF connectivity markets are about to face huge turning points this year. Technical mega trends include physical limits in integration into the 2D space, thus requiring 3D-stacked semiconductors, an LED manufacturing process shift from 4-inch to 6-inch production, and 5G telecommunication infrastructure roll-out. These trends are expected to become reality in the next couple of years and disrupt their respective industries.
Most importantly, the direction of GigaLane’s business is aligned precisely with these trends, and its technology and product capabilities have proved that the company will beat its global competitors and benefit fully from the new opportunities.
GigaLane’s key competitive edge is in developing products requested by customers at the fastest speed and providing customers with the highest value for money.
By developing products and providing services that are customised for its customers, GigaLane aims to secure global companies as customers in competition with large businesses, which cannot rival it for flexibility and speed.
The market where this competitiveness will be demonstrated best is where customers will be most accessible – the Asian market, including mainland China, Taiwan, Hong Kong, Japan and South Korea.
By 2020, GigaLane aims to secure sales in excess of US$100 million in each of its three businesses by achieving dominance in Asia.