SP Samhwa, a paint company with 80 years of history, is accelerating its transformation into an advanced materials supplier. The shift comes as prolonged weakness in the construction sector continues to drag on its core paint business, prompting the company to seek new growth drivers through business restructuring, according to industry analysts.
According to industry sources on Wednesday, SP Samhwa has recently established full-scale mass production of epoxy molding compound (EMC), a key semiconductor packaging material, and will begin supplying components for mobile devices. EMC is an essential material that protects semiconductor chips from external factors such as heat, moisture, and physical impact. SP Samhwa has achieved commercialization seven years after first entering EMC research and development in 2018.
SP Samhwa has continued developing advanced materials despite deteriorating earnings because the construction downturn has weakened its core paint business. Revenue from architectural and industrial paints, which accounts for more than 70% of total sales, has been declining—from 449.5 billion won in 2023 to 445.5 billion won in 2024 and 435.9 billion won last year. The business outlook continues to worsen as rising raw material import costs due to the strong dollar combine with supply uncertainties stemming from Middle East risks. While cost pressures have increased, price hikes remain difficult due to the government's price stabilization policy. Profitability has also deteriorated significantly. SP Samhwa's operating profit fell 63.17% last year to 9.5 billion won from 25.8 billion won in 2023.
SP Samhwa is focusing all efforts on advanced materials development to overcome the crisis. Despite weakening earnings, research and development spending has steadily increased—from 15.3 billion won in 2023 to 15.6 billion won in 2024 and 16.2 billion won last year.
The expanded R&D investment is yielding results in semiconductors and secondary batteries. SP Samhwa is mass-producing three of five EMC products, with the remaining two having achieved production-ready quality levels. In the secondary battery sector, the company has developed 14 types of materials, two types of electrical infrastructure materials, and four types of dispersion technologies.
Industry observers expect SP Samhwa's business transformation into an advanced materials company to accelerate, given its strong expertise in epoxy resin manufacturing technology, which is core to advanced materials. Last year, the company obtained a patent for "organic-inorganic composite materials for semiconductor packaging" that maximizes thermal conductivity while maintaining electrical insulation. Epoxy resin has broad applications including adhesives, coatings and paints, and electronic circuit boards due to its excellent heat resistance, chemical resistance, material adhesion, and water resistance. SP Samhwa has been developing EMC for semiconductor packaging processes since receiving original epoxy resin manufacturing technology from the Korea Institute of Industrial Technology in December 2020.