[Edaily Reporter Kim Sae-mi] Pharmaceutical and biotech companies are expanding their reach into markets for advanced industrial materials—such as artificial intelligence (AI), semiconductors, and electronic materials—by leveraging the fine chemical capabilities they have accumulated through their active pharmaceutical ingredient (API) businesses.

#Pamisell, which started as a stem cell therapy developer, has expanded its business scope from API production to industrial fine chemical products such as electronic materials and flame retardants. #Kukjeon is also leveraging its API business to expand into advanced materials such as semiconductors and electronic materials. A common thread between the two companies is their effort to transfer their pharmaceutical fine chemical capabilities into the industrial materials market.

Pamisell: From Stem Cell Company to AI Materials… Earnings Soaring High

Pamisell is a biotech company that manufactures and sells HatiCellGram-AMI, the world’s first stem cell therapy. After acquiring IDB Chem in December 2012, it expanded its business scope to include industrial fine chemicals such as active pharmaceutical ingredients (APIs) and electronic materials. While sales of nucleosides—a raw material for diagnostic kits—drove its performance during the COVID-19 pandemic, the company is now being reevaluated as an NVIDIA-related stock after securing an exclusive supply contract with Doosan Electronics BG for low-dielectric-constant materials.

The low-dielectric-constant electronic materials produced by Pamisell are used in cutting-edge information technology (IT) infrastructure, such as AI accelerators, 5th-generation (5G) network equipment, and base station antennas. In particular, it is reported that these materials are used exclusively in the manufacture of copper-clad laminates (CCLs) for NVIDIA’s Blackwell AI accelerators. With global investment in AI infrastructure expanding, analysts suggest that Pamisell’s sales of low-dielectric-constant electronic materials have entered a phase of structural growth.

In fact, Pamisell achieved its best-ever performance last year since its founding. Last year’s revenue reached 1141억 won, a 75.8% increase from the previous year. Operating profit also surged by 637.5% to 343억 won.

Of this total, revenue from the Biochemical Business Division, which produces low-dielectric-constant electronic materials, reached 111.5 billion won, accounting for 97% of total revenue. Looking solely at revenue from low-dielectric-constant electronic materials, it reached 64.7 billion won, a 118% increase from the previous year’s 29.7 billion won. This figure is estimated to be on par with Pamicell’s total revenue of 64.8 billion won for the previous year.

This growth trend continued in the first quarter of this year. Pamicell’s first-quarter revenue was 36.5 billion won, of which the Biochemical Business Division accounted for 36.0 billion won, representing 98% of total revenue.

Revenue from low-dielectric-constant electronic materials reached 26 billion won, accounting for 71% of total revenue. This means the company achieved 40% of last year’s annual revenue of 64.7 billion won for low-dielectric-constant electronic materials in just one quarter.

Improvements in profitability are also notable. Pamicell’s first-quarter operating profit was 13.1 billion won, with an operating profit margin of 35.7%. Annual operating profit over the past three years has also surged: 1.3 billion won in 2023, 4.7 billion won in 2024, and 34.3 billion won last year. During the same period, the operating profit margin rose from 2.3% to 7.2% to 30.1%. This indicates that the company, originally a fine chemicals firm based on active pharmaceutical ingredients (APIs), is transforming into a high-margin materials company by capitalizing on the demand for AI electronic materials.

A Pamicell official stated, “As demand for low-dielectric-constant electronic materials used in advanced equipment, such as AI accelerators, continues to grow, our profit margins are also improving.” The official added, “Based on our differentiated technological capabilities and competitive quality, we will further strengthen trust with our major clients. At the same time, we will significantly expand our production capacity through our third plant, scheduled for completion in the second half of this year, to solidify the foundation for sustained growth.”

Kukjeon Is Just Getting Started… Shifting Focus from ‘Pharmaceuticals’ to High-Tech Materials

Although Kukjeon has not yet reached the stage where the expansion of its high-tech materials business is reflected in full-scale financial results, the company is continuing its preparations for commercialization by establishing the necessary infrastructure and building a foundation of verified client relationships. Building on the synthesis, purification, and mass production capabilities accumulated over some 50 years in the active pharmaceutical ingredient (API) business, Kukjeon is implementing a strategy to expand into high-value-added fine chemicals, such as semiconductor and electronic materials.

In 2021, Kukjeon established a Materials Technology Research Institute in Hwaseong, Gyeonggi Province, and in 2023, it invested 50 billion won to build an electronic materials factory in Eumseong County, North Chungcheong Province. This factory serves as a hub for the production of high-value-added fine chemical materials—such as organic light-emitting diode (OLED) materials, electrolyte additives for rechargeable batteries, and semiconductor materials—leveraging the company’s 50 years of experience in the API business. Currently, Kukje supplies high-purity functional additives for the manufacture of high-bandwidth memory (HBM) used in AI semiconductors, as well as antistatic agents and OLED common layer materials.

Kukjeon highlights its “Chemical Total Solution (CTS)” capabilities as a key differentiator. The company positions itself as capable of providing end-to-end solutions—from the synthesis and purification of materials requested by clients to scale-up and mass production—going beyond the mere production of specific raw materials. Kukjeon plans to extend the high-purity processes and quality control capabilities required for the production of active pharmaceutical ingredients (APIs) to the semiconductor and electronic materials sectors.

In particular, Kukje is targeting the development of low-dielectric-constant materials, a sector where Pamicell currently generates revenue. The company aims to establish collaborative relationships with clients—specifically, developers of AI semiconductor packaging and substrate materials—and then work together to build everything from specialty material development to mass production processes in line with the clients’ development strategies. Kukje explained that this structure shares similarities with Pamicell’s model.

However, Kukjeon’s electronic materials business has not yet reached a stage where concrete figures are available. This is because the semiconductor and electronic materials sectors require time to secure customers, ensure mass production stability, and enter the supply chain. Kukjeon also anticipates that the contribution of this business to its earnings will begin in earnest in the second half of next year or later. The key focus for Kukjeon at present is whether its fine chemicals capabilities can translate into securing actual customers and generating revenue.

Lee Seon-woo, Director (Executive) of Kukjeon’s Materials Technology Research Institute, stated, “The semiconductor materials industry requires a long-term perspective to secure customer trust and ensure mass production stability.” He added, “Right now, verifying our technology and entering the supply chain are more important than financial results, and we are in the process of building trust with our customers.”