LG Chem Plans Semiconductor IPA Expansion at Yeosu Petrochemical Complex

LG Chem plans to invest hundreds of billions of won to convert part of its Yeosu petrochemical complex into a semiconductor materials facility, the company said, with the project funded by the 2.5 trillion won ($1.86 billion) raised from last month's sale of shares in its battery subsidiary LG Energy Solution. Mk reported the plan on November 11, 2026.

LG Chem's Yeosu IPA Expansion Plan

LG Chem is considering expanding production capacity for isopropyl alcohol at its Yeosu complex in South Jeolla Province, using land currently occupied by a neopentyl glycol production facility. NPG is an additive used in paints and coatings, and its profitability has deteriorated sharply in recent years as surging Chinese production has driven down prices. IPA is a higher-value chemical widely used in semiconductor manufacturing to remove microscopic impurities and residues from wafer surfaces.

LG Chem supplies the cleaning material to major global chipmakers, including Samsung Electronics, SK hynix and Taiwan Semiconductor Manufacturing Co. The company, the world's largest IPA producer by market share, currently manufactures 165,000 metric tons annually at its Yeosu plant. The planned expansion would add tens of thousands of tons of capacity, strengthening its ability to supply high-purity IPA for semiconductor manufacturing.

According to SEMI, the global market for wet chemicals used in semiconductor cleaning and etching, including IPA, is projected to grow from $3.8 billion in 2025 to $6.5 billion by 2030. The investment comes as South Korean petrochemical producers struggle with persistent oversupply from China and weakening profitability. LG Chem, Lotte Chemical, Hanwha Solutions and Kumho Petrochemical all posted operating losses in the third quarter, despite a temporary improvement in industry conditions linked to the war in the Middle East.

Earlier Moves in LG Chem's Materials Push

In September 2026, LG Chem signed an agreement with China's Zhanghuawei at its Zhenjiang plant in Jiangsu Province, targeting the semiconductor cleaning materials market, Businesskorea reported. In October 2026, LG Chem and Noritake co-developed a silver paste for bonding silicon carbide chips in automotive power semiconductors, Mk reported; the paste stores at room temperature for up to six months. Also in October 2026, LG Chem and Volkswagen Group signed a partnership to develop next-generation eco-friendly mobility materials, focusing on ABS and EP plastics for automotive parts, EIN Presswire reported.

What Comes Next for LG Chem

The proposed IPA expansion would be LG Chem's first major project funded by the 2.5 trillion won share sale. The company said the investment is planned at hundreds of billions of won, with the expansion adding tens of thousands of tons of capacity at Yeosu.