KKR Plans Gradual Exit from TSMC Supplier LCY After $1.56 Billion Stake
Private equity firm's departure clears way for founding family to accelerate US semiconductor materials expansion.
KKR is unwinding its controlling stake in LCY Group, the Taiwanese semiconductor materials supplier, seven years after leading a $1.56 billion takeover that took the company private in January 2019.
LCY Group Chairman Bowei Lee confirmed the gradual exit in July 2026, framing the transition as a strategic shift that will allow the founding family to pursue more aggressive expansion of the company's US semiconductor materials operations.
Backing Away After Seven Years
The 2019 deal valued LCY Chemical at NT$47.8 billion and gave KKR majority control with the stated goal of scaling the business. LCY produces electronic chemicals, including cleaning agents used in semiconductor processing, and serves as a key supplier to Taiwan Semiconductor Manufacturing Company (TSMC).
The private equity firm's departure returns operational control to the family, which has been preparing for a significant push into the US market. LCY announced a $280 million manufacturing facility in Arizona in 2021, with completion expected around 2028.
US Expansion at the Core
The timing aligns with broader efforts to localize semiconductor supply chains in the United States. As TSMC and other chipmakers build fabrication capacity in Arizona and elsewhere, materials suppliers like LCY face pressure to establish nearby production to support the regional ecosystem.
Family control is expected to enable faster decision-making on capital allocation and expansion timelines compared to private equity oversight, according to Bloomberg.
Leadership Transition
According to Bloomberg's reporting, cited by multiple outlets, former LCY Chemical CEO Vincent Liu retired in June 2026 and now serves as a consultant. This detail could not be independently confirmed due to Bloomberg's paywall but appears consistently across secondary sources covering the announcement.
What's Next
KKR has not disclosed the specific timeline or method for its stake sale. A gradual exit suggests the firm may sell shares over an extended period rather than through a single transaction, potentially positioning LCY for a future public listing or strategic sale once its US operations mature.
For the semiconductor industry, LCY's expansion plans matter. Electronic chemicals represent a critical bottleneck in chip manufacturing, and US-based production reduces supply chain vulnerability for domestic fabs. The Arizona facility positions LCY to serve TSMC's planned Arizona plants alongside other manufacturers building US capacity.
The move also marks another chapter in KKR's Asia private equity activity, where the firm has increasingly focused on technology and industrial investments with clear exit pathways. Seven years falls within the typical hold period for large-scale buyouts, suggesting the LCY investment is reaching its planned maturity.