Far from the spotlight on semiconductors and artificial intelligence, a crucial industrial shift is underway in South Korea’s chemical sector. The recent acquisition of DIG Airgas by France’s Air Liquide, for approximately €2.85 billion, isn’t simply a corporate transaction; it’s a strategic move that positions Air Liquide at the heart of the Asian technology supply chain.
A €2.85 Billion Investment in South Korea’s Industrial Foundation
On , Air Liquide finalized its acquisition of DIG Airgas. This deal immediately establishes the company as a leading player in South Korea’s industrial gas market, a sector vital to industries ranging from semiconductor manufacturing to electric vehicle production.
Air Liquide has been operating in South Korea for over three decades, primarily supplying medical oxygen and electronics gases. However, this takeover represents a significant escalation in its involvement. Instead of operating on the periphery of high-tech projects, the company now has direct access to the country’s core industrial infrastructure.
DIG Airgas brings substantial industrial assets to the table:
- Approximately 60 production sites across South Korea
- Around 220 kilometers of gas pipelines
- Roughly 550 employees
- 2024 revenue of approximately €510 million
With DIG Airgas, Air Liquide transitions from being a specialist supplier in South Korea to a structural player in its industrial infrastructure.
The acquisition also includes a portfolio of around twenty ongoing industrial projects, providing Air Liquide with multi-year visibility in a market where long-term contracts and reliability are paramount.
Industrial Gases: The Unseen Foundation of Advanced Technology
Discussions surrounding semiconductors typically focus on nanometers, fabrication plants (fabs), and government subsidies. Rarely is attention given to the gases that are essential for chip production.
Why Ultra-Pure Gases Determine Chip Viability
Semiconductor wafer production involves dozens, and sometimes hundreds, of processing steps. Each step relies on specific gases for etching, deposition, cleaning, or protection. Any contamination can render an entire batch unusable.
- Ultra-pure nitrogen prevents unwanted oxidation and maintains a stable “clean room” environment.
- Hydrogen supports deposition processes and certain cleaning stages.
- Rare gases like argon, neon, and krypton are used in plasma etching and lithography tools.
A silicon wafer, only a few tens of centimeters across, can be worth several thousand euros after processing. A single particle or chemical impurity can turn it into scrap, leading to yield losses, increased costs, and shipment delays.
Air Liquide’s acquisition of DIG Airgas is particularly significant given the increasing demands for ultra-high purity gases. The company’s expertise in this area, combined with DIG Airgas’s established network, positions it to capitalize on this growing market.
Strengthening the Asian Electronics Triangle
From Japan to Korea: Completing the Loop
This acquisition further solidifies Air Liquide’s strategic position in East Asia, building on decades of investment in:
- Japan, a leader in advanced materials and chip equipment
- Taiwan, home to some of the world’s most advanced semiconductor foundries
- Mainland China, where electronics and battery manufacturing are rapidly expanding
South Korea occupies a central position within this network. It is the world’s fourth-largest industrial gas market and the sixth-largest industrial economy overall. The country is heavily invested in research and development, particularly in semiconductors, displays, and electric vehicles.
Major Korean companies like Samsung, SK Hynix, LG, and Hyundai operate as largely self-contained ecosystems, relying on extensive supplier networks – including gas producers – to maintain continuous production. Interruptions to gas supply are unacceptable, as they can shut down entire fabs, resulting in millions of euros in losses per hour.
By becoming the leading industrial gas player in South Korea, Air Liquide establishes itself as a long-term partner, rather than a simple vendor. Supply contracts typically span years, often exceeding a decade, and include substantial commitments to new plants and pipeline infrastructure.
Ultra-Pure Gases: A Niche Market No Longer So Small
A Market Quietly Reaching Tens of Billions
Over the past decade, ultra-pure gases have evolved from a niche specialty to a strategic component of the global economy. They are critical to semiconductors, but also to photovoltaic cells, advanced displays, and emerging energy technologies.
Industry estimates place the high-purity gas market at around €18 billion in 2024, with projections of approximately €18.8 billion in 2025 and around €28.8 billion by 2035. Analysts anticipate the most critical ultra-pure segments used in chips and low-carbon technologies will be worth between €7.5 billion and €11 billion by 2030.
- Continued chip miniaturization drives demand for finer lithography and more complex processing steps, increasing gas consumption and tightening purity requirements.
- The energy transition is fueling demand for high-grade hydrogen for electrolyzers and certain battery manufacturing processes.
Ultra-pure gases used to be a technical detail. They now sit on the same strategic list as rare earths or battery metals.
Globally, Air Liquide and Germany-based Linde dominate this field, having invested heavily in purification processes, cryogenic logistics, and large-scale pipeline networks capable of supplying factories continuously over long distances.
Asia’s Central Role and Europe’s Strategic Concerns
Currently, Asia produces over 60% of the world’s ultra-pure gases, with significant hubs in Taiwan and South Korea. This concentration reflects the region’s dominance in advanced chip manufacturing.
For European and US policymakers, this geographic concentration raises concerns about industrial dependency. While gas molecules are easier to transport than entire fabs, the most sensitive applications still favor local or regional suppliers connected by dedicated pipelines. Disruptions in Asia – from natural disasters to trade tensions – could quickly ripple through global electronics supply chains.
Deals like the DIG Airgas acquisition are, in part, aimed at mitigating this risk. By securing production and infrastructure within South Korea, Air Liquide strengthens supply security for its global customer base, including chipmakers operating in Europe and North America who rely on stable Asian operations.
Implications for France, Korea, and the Chip Race
France’s Industrial Diplomacy, Gas Edition
France has ambitious plans for the semiconductor industry, but cannot match the investment levels seen in Taiwan or South Korea. Instead, companies like Air Liquide are establishing positions in critical segments of the value chain.
Supplying ultra-pure gases may not be as visible as building a new fab, but it creates leverage. Once a gas supplier is integrated into a customer’s pipeline network, storage tanks, and process recipes, switching providers becomes complex and expensive. This integration gives France, through Air Liquide, a voice in strategic discussions regarding capacity expansion and new fab locations.
| Actor | Main Role | Strategic Interest |
|---|---|---|
| Air Liquide | Ultra-pure and industrial gas supplier | Secure long-term contracts and regional networks |
| South Korean Manufacturers | Semiconductors, batteries, EVs | Guarantee uninterrupted and ultra-reliable gas supply |
| France | Investor nation via Air Liquide | Gain influence in the Asian tech supply chain |
For South Korea, the deal brings fresh capital and reinforces the reliability of its industrial base. It also introduces another global player with the financial capacity to co-invest in new plants alongside Korean conglomerates.
Key Concepts and Hidden Risks
Two terms frequently appear in this story: “ultra-pure” and “pipeline network.” Both represent significant technical and financial challenges.
- Ultra-pure: Purity is measured in “nines.” For example, 99.999% purity is “five nines.” Each additional nine represents a disproportionate increase in cost and technical complexity, from filtration and distillation to contamination control during storage and transport.
- Pipeline networks: Laying 220 kilometers of gas pipelines, as DIG Airgas has done, requires securing rights of way, monitoring for leaks, and installing redundancy to ensure maintenance doesn’t halt production at customer sites.
The risks extend beyond supply disruption. Long-distance gas networks also raise safety and environmental concerns: leaks of hydrogen or other gases can cause explosions or contribute to emissions if production isn’t decarbonized. Companies like Air Liquide are facing increasing pressure to align industrial growth with climate commitments, for example, by using renewable electricity for gas separation and electrolysis.
For technology and energy companies planning for the next decade, the scenario is becoming clear. Building a new fab or gigafactory will depend not only on subsidies and skilled labor but also on access to ultra-pure gases – their price, carbon footprint, and the resilience of their supply. Regions that can combine strong local gas infrastructure with supportive policies may attract more of the high-value manufacturing that everyone is pursuing.
