News: Suppliers
2 June 2021
5N Plus invests $8.5m to support demand for II-VI materials
Engineered materials and specialty chemicals producer 5N Plus Inc of Montreal, Québec, Canada, is investing US$8.5m in its Montreal campus to expand the development and manufacturing of critical and strategic materials (including those containing tellurium) for II-VI semiconductor compounds and engineered powders.
The investment is supported by and has received funding from the Ministère de l'Économie et de l'Innovation (Ministry of Economy and Innovation) and the Ministère de l'Énergie et des Ressources Naturelles (Ministry of Energy and Natural Resources) within the province of Quebec, accounting for about a third of the investment.
Alignment between investment and strategy
For over 20 years, 5N Plus has developed ultra-high-purity compounds based on the family of II-VI specialty semiconductor materials at 5N Plus Montreal. With this investment, 5N Plus will expand the capacity of its Montreal campus to address the growing demand for II-VI semiconductor compounds and powders, including those essential for the renewable energy market. The investment in process technology and supply chain optimization will reduce unit cost of production and the overall carbon footprint of the activity. The investment package is expected to be completed by autumn 2022. The firm has indicated that it will be investing near the rate of depreciation over fiscal years 2021 and 2022. This investment package is included in this assumption.
“Following the project’s completion, 5N Plus will have the capacity to competitively produce over half of the world’s high-purity tellurium-bearing II-VI semiconductor compounds, which are essential elements for several critical industries including renewable energy,” says president & CEO Arjang Roshan.
The firm says that, as a global supplier of critical materials for specialty semiconductor devices, it continues to accelerate its semiconductor activities across its sites in Montreal and St George, Utah, USA and recently expanded its II-VI value-chain to include engineered substrates that are essential for optoelectronic applications. This effort has subsequently yielded products that facilitate what is claimed to be unrivalled performance in customer devices used for imaging and sensing applications.
Strategic alignment with AZUR acquisition
While the firm has organically expanded its II-VI semiconductor value-chain, its III-V semiconductor value-chain has required a combination of organic growth initiatives and strategic investments. The announcement in March of 5N Plus’ intent to acquire AZUR SPACE Solar Power GmbH supports its strategic transformation. Given AZUR’s established business in III-V semiconductor materials, the acquisition, along with 5N Plus’ complementary activities in this space, will expand the combined companies’ value-chain and serve as a substantial catalyst for growth, it is reckoned. The synergies of AZUR and 5N Plus should further result in a higher total addressable market beyond the expanded space market, allowing the firm to enter markets such as energy efficiency, electrification, advanced communication, and wireless charging.
“The continued investment in our II-VI and III-V family of specialty semiconductor materials reflects 5N Plus’ aim to be the leading global supplier of these critical materials to the growing markets of the future,” says Roshan. “We are taking a transformational step in building a unique value-chain that will be a long-term, competitive advantage for our company.”
Financial rationale behind investment in sustainability and reliability
The new process technologies facilitated by the $8.5m investment will enable 5N Plus to consolidate and onshore a sizeable portion of its supply chain related to its family of II-VI materials at 5N Plus Montreal, which is powered by hydroelectricity. The totality of this shift will decrease the firm’s carbon footprint per unit of production for II-VI specialty semiconductor materials. Further, these new process technologies will reduce chemical reagent consumption along with processed water and solid by-product generation, contributing to the overall cost reduction per unit of production. With this investment, 5N Plus will also enhance its oversight of the tellurium supply chain and ensure competitive and reliable access to critical products for its customers.
