Posco succeeds in producing neon gas for chips

South Korea’s top steel maker Posco said Wednesday that it has succeeded in producing neon, a rare gas mainly used for making chips, at its Gwangyang steel mill, becoming the first Korean firm to do so.

“It is very meaningful to achieve the complete localization of neon, which was a long-cherished task in the industrial gas market, in cooperation with TEMC, a small but strong Korean company,” Vice President Yoo Byung-ok said during the ceremony.

“Through ESG business management, coexisting with small but powerful companies, we were able to completely eliminate the technological dependence of the rare gas on overseas, and contribute to stabilize the domestic supply chain.”

Demands for rare gases such as neon, xenon and krypton have surged on upbeat sales of computer chips recently. Experts say the market for rare gases could reach some 280 billion won ($235.33 million) by 2023, up from 160 billion won in 2020.

Thus far, the nation’s semiconductor industry relies 100 percent on exports to secure supplies of the rare gases. Neon, in particular, is an extremely rare gas that is used to produce excimer laser gas for chips.

The latest breakthrough comes after several failed attempts to produce the rare gas locally amid price hikes and supply shortages.

Posco said it has joined hands with TEMC, a local producer of specialty gas and medical gas, for two years since 2019.

The firm plans to start mass production of neon gases from this year at its new facility with an annual production capacity of 22,000-normal-cubic-meter of neon gases, an amount that meets about 16 percent of domestic demand.

By Hong Yoo (yoohong@heraldcorp.com)