Ukrainian neon maker moves production to South Korea

According to South Korea news portal SE Daily and other South Korea media, Odessa-based Cryoin Engineering has become one of the founders of the Cryoin Korea company, which will produce inert and rare gases, with reference to the JI Tech company (the second partner in the venture, with a 51 percent stake in the venture).

JI Tech, said: "the establishment of the joint venture will give JI Tech the opportunity to realize the local production of special gases for semiconductor processing and expand new business." Ultrapure neon is mainly used in lasers used in lithography equipment, which is an important part of the microchip manufacturing process.

the new company was launched a day after Ukraine's SBU security service accused Cryoin of Engineering cooperation with the Russian military industry-that is, supplying neon gas for tank laser sights and high-precision weapons.

NV Business explains who is behind the venture and why the Koreans need to produce their own neon gas.

JI Tech is a South Korea manufacturer of raw materials for the semiconductor industry. Last November, the company's shares were listed on the KOSDAQ index on the South Korea stock exchange. In March, the price of JI Tech shares rose from 12,000 won (9.05 dollars) to 20,000 won (15,08 dollars). There was also a marked increase in the volume of mechanic bonds, which may be related to new joint ventures.

the construction of the new facilityCryoin Engineeringand JI Tech programs are expected to begin this year and continue until mid -2024. Cryoin Korea will have a production site in South Korea capable of producing all types of rare gases used in semiconductor processes: xenon, neon and krypton. JI Tech plans to offer a special gas production technology through "a technology transfer deal in a contract between the two companies.

According to South Korea media reports, the Russian-Ukrainian war promoted the establishment of this joint venture, which reduced the supply of ultra-pure gas to South Korea semiconductor manufacturers (mainly Samsung Electronics and SK Hynix). Notably, in early 2023, South Korea media reported that another South Korea company, Daeheung CCU, would join the venture. The company is a subsidiary of Daeheung Industrial Co., a petrochemical company. In February 2022, Daeheung CCU announced the establishment of a carbon dioxide production plant in the New Wanjin Industrial Zone. Carbon dioxide is an important part of ultra-pure inert gas production technology. In November last year, JI Tech became an investor in Daxing CCU.

If JI Tech's plan succeeds, the South Korea company could become an integrated supplier of raw materials for semiconductor manufacturing.

Ukraine has proven to be one of the world's largest suppliers of ultrapure noble gases until February 2022, with three main manufacturers dominating the market: UMG Investments, Ingaz and Cryoin Engineering. UMG is part of the SCM Group Akhmetov by the oligarch Rinat and is mainly engaged in the production of gas mixtures based on the capacity of the Metinvest Group's metallurgical enterprises. The purification of these gases is handled by UMG partners.

At the same time, Ingaz is located in the occupied territories and the condition of its equipment is unknown. The owners of the Mariupol plant were able to partially restore part of the production in another region of Ukraine. According to the results of a survey by NV Business 2022, the founder of Cryoin Engineering was Russian scientist Vitaly Bondarenko. For many years he held personal ownership of the Odesa factory until ownership passed to his daughter Larisa. After his tenure at Larisa, the company was acquired by the Cypriot company SG Special Gases Trading, ltd. Cryoin Engineering ceased operations when the full-scale Russian invasion began, but later resumed work.

, SBU reported searchingCryointhe site of the Odessa plant. According to the SBU, its actual owners were Russian citizens who "formally resold the assets to a Cypriot company and hired a Ukrainian administrator to supervise it."

only one Ukrainian manufacturer in this area meets this description-Cryoin Engineering.

NV Business sent a request to Engineering Cryoin and Larisa Bondarenko, a senior manager of the company, regarding the South Korea of the joint venture. However, the NV Business did not receive a response prior to publication. NV Business found that in 2022, Turkey will become a major player in the trade of mixed gases and pure rare gases. Based on Turkish import and export statistics, NV Business was able to piece together the Russian mixture that was transported from Turkey to Ukraine. At the time, LarisaBondarenko declined to comment on the activities of the Odessa-based enterprise, although Ingaz's owner, Serhii Vaksman, denied that Russian raw materials were being used for gas production.

At the same time, Russia has developed a plan to develop the production and export of ultra-pure rare gases-a plan that is under the direct control of Russian President Vladimir Putin.