OCI Company

OCI (456040) was established through a simple spin-off from OCI Holdings in 2023 and relisted on the KOSPI the same year.

Its business is organized around two segments: Basic Chemicals, which produces semiconductor-grade polysilicon, hydrogen peroxide, chlor-alkali (CA), and TDI, accounting for roughly 36-37% of revenue; and Carbon Chemicals, which produces carbon black, pitch, and BTX (benzene, toluene, xylene), accounting for roughly 62-63% of revenue.

Built on more than 50 years of accumulated technology, the company is the sole domestic producer of ultra-high-purity 11-nine grade semiconductor-grade polysilicon and has supplied SK Siltron since 2012.

More recently, OCI has been expanding into semiconductor and secondary battery materials, exclusively supplying monosilane (SiH4), a core raw material for lithium-ion battery silicon anode materials, to Nexeon of the United Kingdom under a long-term supply agreement, while also carrying out a 30,000-ton expansion of conductive carbon black for EV batteries and electronics, targeting commercial production in the second half of 2026.

In addition, the company has decided to enter the semiconductor packaging wafer recycling business, aiming to complete facilities in the first half of 2027 and generate revenue as early as late 2027.

OCI currently supplies materials for five of the eight major semiconductor process steps—wafer manufacturing, oxidation, photo, etching, and deposition—and the addition of wafer recycling would extend its reach into the packaging process.

The overall strategy leverages the cash-generating capacity of its stable basic chemicals business to diversify the portfolio toward higher value-added semiconductor and battery materials.

Full-year 2025 revenue came to KRW 2.009 trillion, down from KRW 2.215 trillion in 2024, while operating profit collapsed to a near-breakeven KRW 440 million (operating margin of 0.0%), and owner net income swung to a loss of KRW -62.6 billion, a complete reversal from the KRW 96.0 billion profit posted in 2024.

The trough came in the third quarter of 2025, when revenue of KRW 476.4 billion was accompanied by an operating loss of KRW 10.3 billion and an owner net loss of KRW 51.2 billion, the largest loss across the five-quarter window.

The loss trend had already begun in the second quarter of 2025, with revenue of KRW 527.0 billion, an operating loss of KRW 2.3 billion, and an owner net loss of KRW 0.7 billion.

The turnaround began in the fourth quarter of 2025, when the company returned to profitability with revenue of KRW 467.3 billion, operating profit of KRW 2.8 billion, and owner net income of KRW 5.0 billion, and the pace of improvement accelerated sharply in the first quarter of 2026, with revenue of KRW 506.6 billion, operating profit of KRW 27.8 billion, and owner net income of KRW 24.8 billion.

The second quarter of 2026 delivered the best result of the window, with revenue of KRW 535.0 billion, operating profit of KRW 43.3 billion, and owner net income of KRW 30.0 billion.

According to the company, the second-quarter improvement stemmed from simultaneously higher sales volume and prices for petrochemical products amid expanding customer demand, together with improved performance in the semiconductor materials business.

By segment, Basic Chemicals posted revenue of KRW 209.5 billion and operating profit of KRW 18.1 billion, reflecting price increases in some semiconductor material items and higher CA and TDI sales volumes, while Carbon Chemicals posted revenue of KRW 331.5 billion and operating profit of KRW 31.0 billion, supported by wider BTX spreads amid rising oil prices.

Compared with full-year 2023 (adjusted post-spin-off basis) revenue of KRW 1.289 trillion, operating profit of KRW 57.5 billion, and net income of KRW 52.2 billion, the company shows a clear cycle of a 2024 peak, a sharp 2025 downturn, and a recent recovery.

The semiconductor-grade polysilicon market continues to face weak demand due to inventory buildup, but signs of recovery are emerging on the back of rising AI and data center memory demand, with a full-scale demand recovery projected for the fourth quarter of 2026.

Since key customer SK Siltron has stated it plans to double wafer production capacity over the next five years, OCI is positioned to benefit from customer capacity expansion feeding through to Basic Chemicals revenue growth.

The Carbon Chemicals product line—carbon black, pitch, and BTX—is sensitive to oil prices and Chinese coal tar and pitch supply conditions; recently, oil price increases tied to escalating Middle East geopolitical risk widened BTX spreads and lifted TDI prices, benefiting results.

However, the company itself has noted that if geopolitical risk eases and the market enters a seasonally slow period, TDI prices and BTX spreads could normalize lower again.

There are also assessments that current US semiconductor-related tariff policy (Section 232) has so far been favorable to non-Chinese polysilicon, pointing to a trend in which non-Chinese polysilicon is being reclassified from a commodity material to a strategic material.

The conductive carbon black market is expected to grow at roughly a 10% compound annual rate between 2026 and 2034, an area cited as contributing to OCI's push to strengthen its high-value-added product portfolio.

Regarding third-quarter 2026 results, the company has indicated that easing geopolitical risk and entry into a seasonally slow period could cause TDI prices and BTX spreads to normalize lower than in the second quarter.

However, it expects expanded semiconductor materials sales, a recovery in pitch sales, and higher carbon black prices to substantially offset this.

In Basic Chemicals, distribution inventories of related products are gradually declining amid ongoing customer growth and capital investment, leading the company to expect further increases in sales volume and utilization in the second half.

For hydrogen peroxide, the company noted that its Iksan and Gwangyang plants have different raw material and cost structures, giving it the flexibility to run both plants once semiconductor demand recovers.

New business initiatives include a 5,000-ton expansion of phosphoric acid for semiconductor etching, expanded production of the silicon anode material SiH4, and the start of commercial production from the 30,000-ton conductive carbon black expansion in the second half.

The company also plans to complete a semiconductor packaging wafer recycling facility in the first half of 2027 and, following customer quality certification, generate revenue as early as late 2027, though management itself has said this business is not expected to be a major profit contributor in the near term.