[KOREA REPORT] Lee Byung-koo CEO of Nepes

■ The Leaders : Nepes CEO Lee Byung-koo

[ KOREA REPORT

는 대한민국 첫번째 글로벌 미디어 채널 SBS CNBC가 한국의 최첨단 기술 소개, 최고의 리더 인터뷰 등 역동적인 대한민국의 참모습을 세계 경제를 움직이는 최고의 경제 채널 CNBC의 글로벌 네트워크를 통해 전달하는 프로그램입니다. ]

Welcome back. As you all know, Korea is a global powerhouse when it comes to semiconductors and display panels. And in this segment I would like to show you a mid-sized Korean company that has major tech players as its partners. The name may not ring a bell... but its technology is known as world-class. We learn the details from Mr. Lee Byung-koo, the CEO of Nepes.

Nepes is a home-grown company that specializes in making core parts of semiconductor and LCD panels. The company in particular, offers one-stop solution in the chipmaking business from manufacturing process to materials.It has partnerships with global tech giants like Samsung, Sony, Hynix Semiconductor and LG Display... among others. And it's currently striving to expand its presence in the global market... operating plants in Singapore and China.

■ Interview

A]

Our main business is flip-chip packaging. This is an intermediate step in the final wafer processing, which we're aiming to become the world's number one in a few years. Currently we're operating factories in Korea, China and Singapore. And we plan to build another one in Japan in the near future. Our clients include major global companies like Sony, Samsung, LG, Toshiba and Broadcom. I think we were able to forge partnerships with them because our technology has always been ahead of what our clients were looking for. And we're constantly seeking to jointly develop new technologies. Most recently we were able to come up with new technologies by joining hands with IBM and Freescale. So we are, in fact, leading the market trend.

A]

When it comes to semiconductors, Nepes(pronounced "net-pass") has both chip processing and materials technologies. There aren't many in the world that possess both of these which are essential in developing cutting-edge technologies. Being able to combine the two, we're seeing great synergy.

A]

Over the past three years we've been focusing a lot on new businesses particularly in the energy sector. But based on our semiconductor parts and materials technology, we don't go too far off our core business. I think last year's performance was the result of our early preparations.

A]

One of our main products is nano material that is used in semiconductor and LCD making processes. And we started our glass material business by applying this technology. We developed a coating liquid that blocks infrared light and heat. You can simply coat the glass with this liquid. And when adding color, ordinary glass plates tend to lose their transparency because usually, color films are used. But our product keeps them transparent while this nano material allows any color you want. We've also developed a new coating technology, which we are proud to say, is the best in the world. Our simulation shows that it saves energy by as much 50 percent in summer and 20 percent in winter. We're getting a lot attention in Russia, China, Singapore and elsewhere, particularly in regions close to the equator like Dubai. Currently our factories are running at full capacity. So we're expecting rapid growth in this business in two to three years.

A]

We also have the touch panel division in our portfolio. And because we handle both the semiconductor processing and materials, we're good in this field as well. Currently, most companies attach two films with patterns to each glass plate. This is the standard in Taiwan, Japan and Korea. But we thought, 'why not draw the pattern directly on the glass without the film?' So we were the first to come up with this new technology. By doing so, the screens got brighter and we were able to reduce the error rate. We were also able to make it lighter and slimmer. The only problem is that we are going too fast. Companies have yet to switch around. I think by next year, our technology will become an industry standard. And right now, as you may know, the global mobile industry is reshaping through active outsourcing led by Apple. In Korea, we have Samsung. And just recently, we saw Google acquiring Motorola. The key point is that there is no major parts manufacturer in the US. It's a structure in which these major companies must rely on outsourcing to Korea, Taiwan and Japan. So as long as we have good technology, our supply network is only going to expand, whether it's linked to Apple, Google, Samsung or Nokia. Of course, the global economic slowdown is a major concern. But I think the smart phone sector will remain bullish.

A]

Since we mainly do parts and materials, we don't directly supply our products to Apple or Google. We provide our technology to those in the middle. So we're expecting more of our products to reach them as they expand their businesses.

A]

From the start, we were actively shipping our products to Singapore and Malaysia. So we have a good knowledge of overseas markets. What I was able to learn from the experience is that you must carefully choose your markets. For example, big countries are good for big companies. Smaller regions are good for SMEs. Based on this, we recently went into the Republic of Moldova where we set up our LED production base.

A]

We do both B-to-B and B-to-C. Our semiconductor parts and materials are all B-to-B, whereas our lighting, glass and others are B-to-C. Our biggest business-to-business market is the US, followed by Korea and Taiwan. China is in our list but it will take time to catch up. Our B-to-C market is mainly Singapore, Moldova and Equador. So as you can see we have different strategies in different regions.

A]

Cooperation. A company is where different people get together and create synergy for the best result. So the question of how you create a cooperative culture is the key to successful management. Another important goal of Nepes is job creation. Hiring and training good people, letting them fulfil their dreams and thereby offering value products to our customers is our goal. The return from the effort will be reinvested in creating more jobs. Our goal until 2030 is to raise the number of our employees to 10-thousand with sales reaching five trillion won.

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