HPSP, often referred to as Korea’s ASML, dominates the market for semiconductor annealing equipment, supplying Samsung Electronics, TSMC, and Intel. Its exclusive hydrogen-based process has become increasingly critical as semiconductor manufacturers transition to 2-3 nanometer chips, where conventional annealing techniques risk damaging ultra-fine materials.

The company has experienced exponential growth, with revenue skyrocketing from 24 billion won in 2018 to 1.79 trillion won in 2023, achieving a 53 percent operating margin. Analysts project that HPSP will maintain market leadership until at least 2026, as stringent regulatory barriers make it difficult for competitors to enter the hydrogen-based semiconductor equipment sector.

Despite its strong market position, private equity bidders face valuation challenges. Crescendo is reportedly seeking a 100 percent premium, pushing the total deal value to 2 trillion won, while its stake without premiums is valued closer to 1 trillion won. Given that HPSP is publicly traded, its fluctuating stock price adds further uncertainty to price negotiations.

Some private equity firms have withdrawn from the bidding process, citing concerns over the technical complexity of scaling HPSP’s semiconductor operations. However, with demand for AI-driven semiconductor production surging, private equity interest remains strong.

The final bidding round is expected to commence in the first half of this year, with Crescendo aiming to close the deal before year-end. The outcome will be closely watched, as it could mark one of the largest private equity-backed semiconductor deals in South Korea.