South Korean e-cigarette makers ITM Semiconductor and Elentec haㅍㄷ moved their production facilities in Vietnam to other countries, TheElec has learned.
The move is a response to the Vietnamese government passing a law in January which banned the production, sales, and possession of e-cigarettes, from those heated to vapes.
Due to this, ITM Semiconductor and Elentec, which supply their e-cigarette devices to KT&G, saw their factories in the country halted.
ITM Semiconductor supplies 90% of the liquid cartridges used in KT&G-branded e-cigarette. It shares suppyling of the devices with Partron. Elentec began device supply in 2020 and added cartridges last year.
KT&G devices account for 20% of those used in South Korea as of 2024 and the market has matured somewhat. Elentec recorded 304.1 billion won in revenue from device sales but this dipped to 101.7 billion won last year. It is expected to recover its revenue to 150 billion won this year.
So new growth will be from cartridge sales rather than devices. ITM Semiconductor was the sole supplier of cartridges at the start for KT&G's Lil Hybrid (which combines heated and vapor cigarette features) but Elentec has now entered the supply chain. Hybrid now has a feature that offers tobacco-like experience, which uses more liquid cartridges.
KT&G is planning an active marketing campaign for Hybrid so suppliers that supply more liquid cartridges are expected to expand their revenue.
Liquid cartridges use glycerin, which needs to be injected uncontaminated. This requires complex injection molding so companies are expected to face difficulties in increasing production rate while maintaining a higher yield rate.
Elentec recorded last year 9.1 billion won in revenue from its liquid cartridge sales to KT&G. This is expected to increase to 30 billion won. ITM Semiconductor’s e-cigarette business meanwhile recorded 83.6 billion won in revenue last year.
E-cigarette are comprised of 1865 batteries, protection circuits, and printed circuit boards. They are made in a similar way to battery packs. The battery’s output is temporarily increased to heat the cigarette and people hold it for long times, so safety is paramount. ITM Semiconductor and Elentec have been in the battery pack and protection circuit businesses for a long time before entering the e-cigarette market.
source：https://www.thelec.net/news/articleView.html?idxno=5352
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