South Korea’s largest chemical company LG Chem is looking to pivot from its petrochemical business toward AI-driven growth areas, citing slow profitability. In a town hall meeting Monday, LG
South Korea’s largest chemical company LG Chem is looking to pivot from its petrochemical business toward AI-driven growth areas, citing slow profitability.
In a town hall meeting Monday, LG Chem disclosed it’s allocating 15 trillion won ($9.74 billion) in research and development to expand its business portfolio. About 70% of the fund will target semiconductor, mobility, and robotics materials.
The company also plans to acquire leading technologies and develop AI-based applications, according to the report.
LG Chem’s plans to diversify the business come amid the prolonged margin squeeze across the global petrochemical sector.
Traditional petrochemical businesses have been faced with declining profitability due to global events and intensifying competition. This has been a business that has historically defined LG Chem’s revenue base.
“We will upgrade our business portfolio by fostering semiconductor, mobility, and robotics materials, as well as anticancer drugs, as our core future growth businesses,” said LG Chem CEO Kim Dong-chun.
Earlier this month, LG Chem established a CEO-led new business development unit to accelerate the move.
In semiconductors, the company intends to focus on advanced packaging materials, as well as expand development of adhesives and low-dielectric materials, among other things. LG Chem targets a 2 trillion won (roughly $1.3 billion) revenue for its electronic materials division by 2030.
In mobility and robotics, LG Chem plans to move beyond electric vehicle battery materials into robot structural components and high-precision motion and bonding materials.
The leading Korean chemical company aims to hit a double-digit operating margin by 2030 from all of these moves.
LG Chem’s interest in semiconductors, AI, and robotics is not surprising. Korea currently sees a growing demand for semiconductors, largely driven by AI growth.
Earlier in February, Cryptopolitan reported that South Korea’s exports soared by a record 44% year-over-year, reaching $21.4 billion, following a massive surge in demand for semiconductors.
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