OCI Vice Chairman Lee Woo-hyun.

OCI, reeling from falling polysilicon prices, a raw material for photovoltaic power being dumped by Chinese makers, is now making preparations for a leap forward through the restructuring of its business portfolio.

OCI has begun to produce polysilicon for semiconductors, a value-added item in earnest. OCI also plans to establish a joint-venture to produce high-purity hydrogen peroxide with POSCO Chemical.

OCI is involved in an urban development project in Incheon in which apartments will be sold in the second half of this year. OCI has strategies to improve profit by focusing on advanced material and urban development businesses.

OCI converted a photovoltaic power polysilicon plant in Gunsan into a semiconductor polysilicon production facility, and put it into operation on May 1.

OCI’s Gunsan plant once produced small amounts of semiconductor materials on a pilot project, but it is the first time the company has transformed the plant into a semiconductor polysilicon facility.

The plant is evaluated to have settled into semiconductor polysilicon production mode.

OCI’s first plant in Gunsan will increase semiconductor polysilicon sales to 1,000 tons this year. OCI made significant achievements in Korea and Taiwan, an OCI official said.

Semiconductor polysilicon sales are forecast to surge between 10 percent and 20 percent from the third quarter of the year compared to current levels, the official added. Currently, semiconductor polysilicon prices have fetched $30 levels, a four-fold jump over those of photovoltaic power polysilicon.

The more photovoltaic power polysilicon products OCI has sold, the more losses the company has suffered, business sources said. If OCI succeed in supply of semiconductor polysilicon products in the United States and Japan, they said, the company is predicted to maximize profitability.

OCI’s mainstay business of specializing in photovoltaic power polysilicon saw operating profit plunge dramatically due to a supply glut by Chinese companies starting the second half of 2018. The company suffered losses in Q4 2019 for the fifth consecutive quarter.

As a result, OCI announced a plan to stop production of photovoltaic power polysilicon last February.

Instead, the company launched a project to transform part of the Gunsan plant into a semiconductor polysilicon production line.

OCI has a two-tract strategy to operate only a photovoltaic power polysilicon production plant in Malaysia with a competitive edge.

OCI’s process of establishing a joint-venture to produce high-purity hydrogen peroxide with POSCO Chemical is underway. The two companies have already signed a joint-venture deal to build a high-purity hydrogen peroxide with an annual capacity of 50,000 tons.

POSCO Chemical and OCI will make an equity investment with a ratio of 51 percent: 49 percent, respectively.

The joint-venture company will be established in July and a project to build a high-purity hydrogen peroxide will be launched this year, an OCI official said.

Hydrogen peroxide, an eco-friendly oxidizing agent, is in wide use as bleach and cleaning agents. Hydrogen peroxide has proven to be effective in sterilization in efforts to combat the Middle East Respiratory Syndrome (MERS) and Severe Acute Respiratory Syndrome (SARS).

Hydrogen peroxide is also used for sterilizing the COVID-19. High purity hydrogen peroxide is used as an essential material to etch and clean in semiconductors and display production processes.

Explaining the background of their collaboration, the two companies said the establishment of the joint venture is designed to stabilize the supply of the material essential for the Korean semiconductor process, given a market situation in which high-purity hydrogen peroxide demand is on the surge on the back of large-scale facility expansion by major semiconductor makers.

A view of OCI’s plant in Gunsan, Jeollabuk-do. (Photos: OCI)