Page 18 - investor presentation

Our Investment

SK materials 1 Semiconductor Materials

Deal Making (’14 ~ ’15) Value Up (’16 ~ on-going)
Capacity Expansion Product Diversification

Identified the increasing need of advance materials for semiconductor
Target manufacturing process in early stage, based on SK’s industry knowledge Post acquisition, increased the portion Increased the number of products from
Sector • SK Hynix confirmed the use of specialty gas (NF3) has been more than doubled in the of long term contracts (20% 75%) 3 to 69 in less than 5 years through JV
semiconductor manufacturing process due to increased scaling and stack-up in 3D leveraging SK Hynix and expanded and bolt-on acquisitions
NAND to increase density of memory chips
capacity for pre-emptive demand
Product Note
Debottlenecked the process to further
expand capacity without cost 1 Industrial Gas Acquired Airgas
Leveraged SK Hynix supply chain network to identify potential investment
target that is not readily available in the market yet
Deal • Identified OCI Materials, world’s No. 1 NF3 manufacturer with 40%+ market share, where Capacity (ton/year)
Sourcing OCI was considering the divesture of non-core business to focus on its new growth Product 2015 2018 2 Pre-cursor JV with Trichem in Japan
business such as solar panel
• Understood OCI had preliminary talks with Praxair (world’s No. 3 specialty gas supplier), NF3 8,600 12,100
Linde (German’s industrial gas player), Goldman Sachs and Carlyle, all foreign investors 3 Etching Gas JV with Showa in Japan

WF6 600 1,500
4 Wet Chem JV with LTCAM
Validated Target’s competitive position leveraging SK Hynix Vendor Quality
Deal Assurance results, and made quick investment decision SiH4 2,000 2,000
Review
& • Based on SK Hynix in-house view of industry forecast, SK decided to invest in Nov. 2015 Si DCS 150 800 5 L-CO2 Acquired Hanyu Chemical
with confidence of rebound of semiconductor cycle in 2016 onwards
Execution • Convinced OCI that Target is a strategic asset in Korea, and SK is the only domestic player
with strong industry expertise, to acquire majority stake (49.1%) without control premium
i2H6 8 14 6 Photo resist Acquired Kumho PR

KRW 393,000
4.3 x
6
Acquired 49.1% at
Share Price KRW 90,700/share 1 2 3 4 5
(2011=100)
EBITDA 153 299 326
(US$ million) 201 203 252
NF3 EBITDA 104 129 111 104 91 69
’11 ’15 ’16 ’17 ’18 ’19 ’20

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