The Strait of Hormuz is once again impacting the semiconductor industry through a less-discussed channel: chemical materials. Reports from South Korea indicate a significant price increase for hydrofluoric acid used in chip manufacturing processes. Anhydrous hydrogen fluoride has seen its cost rise by approximately 40% since the beginning of the year. This price hike is expected to affect Samsung and SK Hynix by late June and July, leading to a considerable increase in their memory chip prices. Yes, even further than before.
The issue stems from a direct supply chain originating from Persian Gulf countries, involving sulfur, sulfuric acid, anhydrous hydrogen fluoride, and hydrofluoric acid. According to information from Asia, the closure of the Strait of Hormuz due to the conflict with Iran has cut off over 30% of the global sulfur supply. Sulfur is a byproduct of oil and natural gas refining.
Strait of Hormuz Jeopardizes Chemical Materials for Semiconductor Industry, Including Hydrofluoric Acid and Sulfur
This chain reaction leads to increased costs across the board, as oil is not the only essential commodity for the industry. Sulfur is used to produce sulfuric acid, which in turn is employed to create anhydrous hydrogen fluoride. As China relies on Middle Eastern sulfur and is the world’s largest producer of sulfuric acid, the country has begun to restrict exports to prioritize its domestic industrial demand.
The price impact is already evident: SunSirs reports that sulfuric acid prices in China reached 2,100 yuan per ton in mid-April, a 130% increase from the beginning of the year. South Korea’s vulnerability lies in its external dependence, a situation not shared by China, which unfortunately for the chip industry, impacts its supply chain.
Companies such as Soulbrain, ENF Technology, and Foosung are already sourcing Chinese anhydrous hydrogen fluoride at an increased price of around 40%. These companies then blend it with ultrapure water to produce hydrofluoric acid for semiconductor processes, particularly for wafer etching and cleaning. It’s not difficult to understand that the cost of everything manufactured by Samsung, SK Hynix, and the industry at large will experience a significant price surge.
Memory Chips are the Biggest Consumers of These Compounds
The source indicates that Samsung and SK Hynix will ultimately have to absorb these price increases between late June and July due to the escalating raw material costs. In an industry where DRAM, NAND, and HBM memory are already facing strong demand and supply adjustments, further increases in essential materials will add more pressure to production costs.
Standard hydrofluoric acid for semiconductors is produced by diluting anhydrous hydrogen fluoride with ultrapure water to a concentration of 49% HF and 51% water. When mixed with ammonium fluoride, it creates BOE, a chemical used in fine patterning processes due to its slower and more uniform etching capabilities.
South Korea consumes approximately 60,000 tons of hydrofluoric acid annually and between 90,000 and 100,000 tons of BOE. While the country can produce sulfuric acid, it cannot produce anhydrous hydrogen fluoride on a large scale. This is why 90% of this material is imported from China.
BGF EcoMaterials is investing 150 billion won in a 50,000-ton annual capacity plant in Ulsan, with production expected to commence in the 4th quarter of 2026. Until then, avoiding these price increases appears to be a significant challenge.
