Japan's Mitsui Mining & Smelting Co., Ltd. (Mitsui Kinzoku) has announced a price increase for copper foil, a critical material used in semiconductor package substrates. With Mitsui Kinzoku controlling over 90% of the copper foil market for semiconductor package substrates, a ripple effect is expected across South Korea's electronics and semiconductor industries.

According to industry sources on the 13th, Mitsui Kinzoku recently raised its copper foil prices by 10%, citing higher labor and material costs. The price hike affects the supply to copper-clad laminate (CCL) manufacturers, who will see increased procurement costs.

The decision to implement a double-digit increase is seen as unusual. An industry insider noted, "Typically, price adjustments are made after thorough negotiations and are usually in the single-digit range. A 10% hike at once is rare, likely due to Mitsui Kinzoku' dominant market position."

Copper foil, made from copper, is a crucial material for producing CCL and printed circuit boards (PCBs). When copper foil is layered onto an insulating layer of resin, fiberglass, and fillers, it forms CCL, which is then used to manufacture PCBs. In PCBs, copper foil acts as the electrical pathways (circuits) for components like semiconductors to transmit signals.

The significance of Mitsui Kinzoku' price hike lies in its substantial influence over the domestic market, potentially triggering a chain reaction in the semiconductor sector. Sources indicate that Mitsui Kinzoku holds over 90% of the market share for copper foil used in semiconductor package CCLs, particularly in the ultra-thin range of 2 to 5 micrometers. This dominance in the ultra-precision substrate field has earned the company a reputation as a "super-power" in the copper foil industry.

In South Korea, key CCL producers such as Doosan Electronics and LG Chem, as well as flexible copper-clad laminate (FCCL) manufacturer NexFlex, rely heavily on copper foil from Mitsui Kinzoku. This makes them particularly vulnerable to the recent price hike. Additionally, PCB manufacturers like Samsung Electro-Mechanics and LG Innotek, which depend on the "copper foil-CCL-PCB" supply chain, could also face increased costs, potentially leading to a domino effect of price hikes throughout the industry.

However, analysts believe that South Korean CCL manufacturers may find it difficult to pass on the higher costs to their customers, as they lack Mitsui Kinzoku' dominant market position. Another industry source commented, "Unlike Mitsui Kinzoku, domestic CCL companies do not hold a commanding market share, making it challenging to raise product prices."

The industry is closely monitoring the potential impact of Mitsui Kinzoku' price hike. Reports suggest that other Japanese copper foil manufacturers are also considering similar price increases, which, if implemented, could have even broader repercussions on the market.