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Title [Biz Interview] “SurplusGLOBAL will become a mecca for used semiconductor equipment”
Source Chosun Biz Date

Creating ‘Used Semiconductor Equipment Cluster’ of KRW 70 billion in Yongin, Gyeonggi-do in Korea
“Aims to create business value worth KRW 1 trillion by 2025”
An used semiconductor equipment warehouse located in SurplusGLOBAL headquarters in Osan, Gyeonggi-do. Its size is 11,500 square meters (3,500 Pyeong) and it is filled with about 500 white, blue, and gray semiconductor equipment. Logos from various semiconductor equipment manufacturers, including Applied Materials, are attached to each semiconductor device. It is the place where domestic and foreign buyers of SurplusGLOBAL always visit. 



SurplusGLOBAL is the No. 1 used semiconductor equipment company in the world and it owns a total 1,100 pieces of equipment at three warehouses (HQ, 1st, and 2nd warehouses). Bruce (Jung-woong) Kim (51) said, “SurplusGLOBAL has 20% of the world’s used semiconductor equipment.”
On October 26, Chosun Biz met with Bruce at the SurplusGLOBAL headquarters and heard the direction of the used semiconductor equipment market and SurplusGLOBAL’s goals. Bruce established SurplusGLOBAL in 2000 and he has been engaged in the business of selling and buying used semiconductor equipment, acting as a sales agent, providing technical support, and leasing equipment, together with about 50 employees.
SurplusGLOBAL deals with global semiconductor companies such as Samsung Electronics, SK Hynix, Intel, DB HiTek, TSMC, and SMIC. It was listed on the KOSDAQ market in January this year. In the third quarter of this year, SurplusGLOBAL reached sales of KRW 29.41 billion and operating profit of KRW 7.45 billion on a consolidated basis. 
 “Important infrastructure of the semiconductor market but less known…”
When Bruce was asked about the used semiconductor equipment industry, he said, “The used semiconductor equipment industry is a very important infrastructure (on social production basis) in the semiconductor market.” He added, “Even though there are more than 2,000 employees working in this industry in Korea, but they are less known for their work.”
The used semiconductor market is closely related to the semiconductor equipment market. The global semiconductor equipment market is usually valued at 40 billion dollars (about KRW 44.6 trillion). Also, its value is expected to grow to 50 billion dollars (about KRW 55.8 trillion) due to the semiconductor boom. The leading semiconductor equipment manufacturers such as Applied Materials, ASML, LAM Research, KLA Tencor, and Tokyo Electron account for 50 to 70% of the total market. 
The used semiconductor equipment market has been valued at about 3 billion dollars (about KRW 3.35 trillion) annually. The used semiconductor equipment industry can be largely categorized as ‘Fab-to-Fab trading market’ and ‘dealer trading market’ like SurplusGLOBAL. 
Fab-to-Fab trading indicates that the deal of selling and buying used semiconductor equipment occurs between semiconductor equipment manufacturers such as Toshiba and TSMC.
Used semiconductor equipment dealers such as SurplusGLOBAL buy legacy tools (mature semiconductor process), which is greater than 40nm, from semiconductor companies such as Samsung Electronics, SK Hynix, Intel, and Micron as well as from OEMs such as Applied Materials and ASML. Then, they sell these tools again. The customers range from SMEs to global companies. 


Bruce said, “10 years ago, the used equipment market was small, but now it has become competitive in terms of quality and price, and the market has become larger. Particularly, there are cases that some legacy tools are not manufactured anymore and therefore they are only available in the used equipment market.” He added, “Semiconductor equipment over 130nm can be installed at a price level of 50 to 60% of the new equipment.”
In the used semiconductor equipment market, there is a market that is twice as large as a fab-to-fab deal and a deal between dealers. It is a service and parts market worth about 2 billion dollars (about KRW 2.2 trillion). The market includes equipment maintenance, repair, equipment refurbishment, and equipment transportation. 
Bruce said, “As the quality of service and parts has been improved and the market is growing, there is an increased demand for used semiconductor equipment.” He added, “Especially, as there are many engineers who have worked in popular semiconductor equipment companies in Korea, and the semiconductor market is large, used semiconductor equipment market is expected to grow as well.”
◆ Dreams of becoming a mecca with used semiconductor equipment cluster
SurplusGLOBAL acquired EQ GLOBAL to enter the semiconductor service and parts market. EQ GLOBAL is a company which is specialized in the development and production of printed circuit boards (PCBs), automatic test equipment (ATE), and radio frequency (RF) generators for semiconductor and display equipment. SurplusGLOBAL is planning to expand its business to provide services such as equipment maintanence and repair, excluding refurbishment.
Bruce said, “Out goal is to provide a high-quality solution when our customers visit SurplusGLOBAL.” He added, “We will continue to acquire companies that provide semiconductor-related services in order to provide one stop solution from equipment to service and become the mecca of used semiconductor equipment.”
SurplusGLOBAL is building the world’s largest used semiconductor equipment cluster of 61,487m2 (about 20,000 Pyeong) in Yongin-si, Gyeonggi-do in Korea. Through this cluster, SurplusGLOBAL is planning to establish a supply system for used semiconductor equipment, refurbishment service, and turnkey solution for parts by the first half of 2019. In the process, it aims to attract global OEMs and distributors to collaborate. 
Bruce said, “In the used semiconductor equipment cluster, we will try to provide all the solutions for used semiconductor equipment with about 30 companies including famous OEMs moved in.”
Bruce’s aspirations are based on a database of the demand forecast of semiconductor equipment which has been accumulated over the past 17 years. Bruce said, “Employees in SurplusGLOBAL have broadened their insights for the semiconductor equipment market by visiting various places in overseas.” He emphasized, “We are constantly managing the demand and supply of equipment by established database through experiences of evaluating equipment value.” 

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