
Looxent successfully completed a Commercial Due Diligence (CDD) project for a leading domestic manufacturer of semiconductor process consumables used by global semiconductor companies. These consumables play a critical role in determining the yield and quality of finished semiconductors, making the market highly competitive with significant barriers to entry and high value addition. The target company specializes in engineering plastic-based process consumables, holding the top market position in South Korea. The CDD focused on evaluating the growth potential of the semiconductor market, the sustainability of the consumables segment, the company’s competitive positioning, and mid- to long-term revenue projections.
Key Findings from the Due Diligence
Semiconductor Market Outlook:
Given that the target company supplies to a concentrated group of global semiconductor leaders, the due diligence assessed the growth potential of its customers and the overall semiconductor market’s projected growth rate. Particular attention was given to the heavy reliance on specific processes and the technical feasibility of substituting these consumables.
Market trends indicate strong demand growth in the NAND and DRAM segments driven by the proliferation of data centers, 5G, IoT, and AI technologies. NAND consumption is surging due to increasing content storage requirements in mobile markets like smartphones, while DRAM adoption is accelerating in high-performance and large-capacity products for smartphones and servers. When translated into wafer demand forecasts, 3D NAND is poised for substantial growth, and DRAM demonstrates stable upward trends. Additionally, the increasing process steps due to NAND stacking are expected to drive further demand for process consumables.
Disruptive Technology Risks:
With the semiconductor industry continuously introducing new technologies, understanding the potential impact of disruptive innovations is critical. This CDD evaluated two primary risks:
- Whether the consumables could be eliminated or replaced within existing processes.
- Whether the process itself could be supplanted by alternative technologies.
These risks were rigorously cross-checked with experts from downstream industries and former professionals from global equipment manufacturers to ensure comprehensive verification.
Competitive Positioning:
The CDD thoroughly assessed the target company’s proprietary patents and technical capabilities. Specific focus areas included:
- The competitiveness of the target company’s products compared to original components from global equipment manufacturers.
- The company’s barriers to entry against local competitors in South Korea.
Commercial Recommendations and Outcome
The due diligence concluded with positive insights into the target company’s sustainable client relationships, competitive advantages, and market positioning. Based on this analysis, a revenue growth projection was developed with an average annual growth rate. The client ultimately decided to proceed with an investment in the target company, leveraging the findings of the CDD.
Looxent’s Expertise in B2B Commercial Due Diligence
Conducting effective CDD in B2B industries requires deep technical understanding of the product and its applications. This includes evaluating manufacturing processes, operational facilities, and the inherent barriers to entry. Looxent’s extensive experience in operational optimization across various industries was instrumental in this project, enabling precise insights and actionable recommendations.
The client recognized and valued this expertise, acknowledging that Looxent’s contributions played a significant role in completing the funding process successfully. This project further demonstrates Looxent’s ability to deliver tailored solutions that drive strategic investment decisions in complex and technical markets.
Looxent successfully completed a Commercial Due Diligence (CDD) project for a leading domestic manufacturer of semiconductor process consumables used by global semiconductor companies. These consumables play a critical role in determining the yield and quality of finished semiconductors, making the market highly competitive with significant barriers to entry and high value addition. The target company specializes in engineering plastic-based process consumables, holding the top market position in South Korea. The CDD focused on evaluating the growth potential of the semiconductor market, the sustainability of the consumables segment, the company’s competitive positioning, and mid- to long-term revenue projections.
Key Findings from the Due Diligence
Semiconductor Market Outlook:
Given that the target company supplies to a concentrated group of global semiconductor leaders, the due diligence assessed the growth potential of its customers and the overall semiconductor market’s projected growth rate. Particular attention was given to the heavy reliance on specific processes and the technical feasibility of substituting these consumables.
Market trends indicate strong demand growth in the NAND and DRAM segments driven by the proliferation of data centers, 5G, IoT, and AI technologies. NAND consumption is surging due to increasing content storage requirements in mobile markets like smartphones, while DRAM adoption is accelerating in high-performance and large-capacity products for smartphones and servers. When translated into wafer demand forecasts, 3D NAND is poised for substantial growth, and DRAM demonstrates stable upward trends. Additionally, the increasing process steps due to NAND stacking are expected to drive further demand for process consumables.
Disruptive Technology Risks:
With the semiconductor industry continuously introducing new technologies, understanding the potential impact of disruptive innovations is critical. This CDD evaluated two primary risks:
These risks were rigorously cross-checked with experts from downstream industries and former professionals from global equipment manufacturers to ensure comprehensive verification.
Competitive Positioning:
The CDD thoroughly assessed the target company’s proprietary patents and technical capabilities. Specific focus areas included:
Commercial Recommendations and Outcome
The due diligence concluded with positive insights into the target company’s sustainable client relationships, competitive advantages, and market positioning. Based on this analysis, a revenue growth projection was developed with an average annual growth rate. The client ultimately decided to proceed with an investment in the target company, leveraging the findings of the CDD.
Looxent’s Expertise in B2B Commercial Due Diligence
Conducting effective CDD in B2B industries requires deep technical understanding of the product and its applications. This includes evaluating manufacturing processes, operational facilities, and the inherent barriers to entry. Looxent’s extensive experience in operational optimization across various industries was instrumental in this project, enabling precise insights and actionable recommendations.
The client recognized and valued this expertise, acknowledging that Looxent’s contributions played a significant role in completing the funding process successfully. This project further demonstrates Looxent’s ability to deliver tailored solutions that drive strategic investment decisions in complex and technical markets.