Korean SME ventures into solar cell material production in Vietnam

SHS Global Chairman, right, shakes hands with GIA Dinh Group Chairman at a memorandum of understanding (MOU) signing ceremony at GIA Dinh Group headquarters in Ho Chi Minh, Vietnam, on July 6. [Photo provided by SHS Global]

South Korea’s SHS Global recently announced that it has signed a memorandum of understanding (MOU) with Vietnam’s GIA Dinh Group to jointly invest in a factory for producing solar cell encapsulation films in Vietnam.

The two companies plan to invest $40 million in the first phase to establish a 5-gigawatt (GW) capacity solar cell encapsulation film factory, which is expected to begin operations in the second half of 2025.

They have further plan to expand the business to a cumulative capacity of 50 GW by 2030.

A solar cell encapsulation film encapsulates and protects solar cells. It is a crucial component that determines the durability and power efficiency of solar modules. While ethylene vinyl acetate (EVA) has traditionally been used as the main material for this film, there has been a growing trend towards using polyolefin elastomer (POE), an environmentally friendly and high-value-added material.

SHS Global is a global sales partner of LG Chem Ltd., which produces POE, a high-value synthetic resin product. The market for POE used in solar cell encapsulation film production is estimated to be worth $6.5 billion or 1.8 million tons worldwide. LG Chem currently produces 300,000 tons of POE annually, representing a significant share of this market.

With the rapid growth of solar power generation, the market for POE used in solar module films is expected to grow by over 30 percent annually until 2025. In response to this trend, LG Chem has been investing in expanding its POE production capacity since 2021, aiming to achieve an annual production capacity of 380,000 tons by the end of this year, making it the world’s second-largest producer.

Under the MOU, SHS Global will be responsible for equity investment, financial procurement, selection of equipment and raw materials, and export activities. GIA Dinh Group will handle equity investment, provide land, obtain permits, oversee local construction, and facilitate the local sales of the manufactured products.

“This project was initiated as part of our efforts to establish a solar supply chain in Vietnam, which is emerging as an alternative production base to China, where over 80 percent of the global solar supply chain is concentrated,” said an official from SHS Global.

GIA Dinh Group is involved in various businesses, including solar power plant construction within Vietnam and local production of footwear for global brands such as Nike and Adidas. The business group has increased its cooperation with Korean companies, as evidenced by the signing of an MOU with the Korean SEP Cooperative in June this year for the development of a carbon-neutral industrial complex in Binh Dinh, a project worth about $200 million.