Brookfield's DIG Airgas Play: Cementing Infrastructure Dominance in Semiconductors and Green Energy

South Korea's industrial gas sector is the unsung backbone of its $200 billion semiconductor industry and nascent green energy revolution. Now, Brookfield Asset Management (BAM) is poised to seize a pivotal position in this critical infrastructure space through its potential $3.6 billion acquisition of DIG Airgas—the third-largest industrial gas producer in South Korea. This move isn't just about buying a gas supplier; it's about locking in exposure to two of the most lucrative, regulation-backed sectors of the 21st century: semiconductors and green hydrogen. Let's dissect why this deal could be a masterstroke.

Brookfield's Industrial Gas Blueprint: From SK Airplus to Semiconductor Supremacy
Brookfield's existing investments in South Korean industrial gases—most notably its 2022 acquisition of SK Airplus—have already positioned it as a critical partner to tech giants like SK Hynix. The SK Airplus facility supplies oxygen, nitrogen, and argon to SK Hynix's M15 and M16 semiconductor plants under 20-year “take-or-pay” contracts, ensuring steady cash flows. By 2024, Brookfield expanded this footprint by acquiring SK ecoplant's gas facilities and its Renewtech CO₂ business, which produces ultra-high-purity carbon dioxide for semiconductor photolithography—a process essential for chip manufacturing.

Why DIG Airgas? The Intersection of Semiconductors and Green Energy
DIG Airgas isn't just another gas player. Its portfolio includes:
- Semiconductor-critical gases: Pure CO₂ and specialty gases for photolithography and etching.
- Green hydrogen infrastructure: Growing demand for hydrogen in fuel cells and decarbonization projects aligns with South Korea's goal to produce 1.2 million tons of green hydrogen annually by 2030.
- Diversified contracts: Supply agreements with petrochemical, medical, and automotive clients provide revenue stability.

Crucially, Brookfield's bid for DIG Airgas would consolidate control over ~40% of South Korea's industrial gas market. This scale creates operational synergies with its SK Airplus assets, enabling cost efficiencies in logistics, maintenance, and regulatory compliance.

Valuation & Stability: 18-20x EBITDA Isn't a Risk—It's a Roadmap
The deal's valuation multiple of 18-20x EBITDA initially raises eyebrows. But consider the math:
- Contracted cash flows: 70% of DIG Airgas's revenue comes from long-term, fixed-price contracts with semiconductors and petrochemical clients.
- Regulatory tailwinds: South Korea's “Green New Deal” mandates energy transition investments, shielding gas suppliers from demand volatility.
- Inflation hedge: Industrial gas prices are often tied to commodity indices, making them a natural inflation protector.

Brookfield's infrastructure portfolio thrives on such “regulation-backed, recession-resistant” assets. At 19x EBITDA, this deal is cheaper than its SK Airplus acquisition (21x EBITDA in 2022), reflecting a buyer's market in a post-pandemic world.

South Korea's Tech/Green Playbook: Brookfield as a Financier of National Strategy
South Korea's tech and energy policies are laser-focused on reducing reliance on foreign chipmaking and green energy imports. By backing Brookfield's acquisition, Seoul ensures:
1. Supply chain sovereignty: Domestic gas producers shield semiconductor giants from global shortages (e.g., 2021's chip crisis).
2. Carbon neutrality: Hydrogen production from DIG Airgas's facilities could feed into South Korea's planned green hydrogen corridors.
3. Capital recycling for SK Group: SK ecoplant's sale of non-core assets to Brookfield frees up ~$2.3 billion in capital for SK Group's core businesses and its 2026 IPO.

Investment Thesis: Buy the Infrastructure Play, Not Just the Gas
This isn't a bet on gas prices—it's a bet on Brookfield's ability to monetize infrastructure in high-growth sectors. Key catalysts ahead:
- DIG Airgas deal closure: Final regulatory approvals expected by Q4 2025.
- SK Hynix's chip capex: SK Hynix plans $100 billion in semiconductor investments by 2030, directly boosting gas demand.
- Green hydrogen demand: South Korea's hydrogen subsidies and infrastructure projects could triple gas utilization rates in industrial sectors.

For investors, Brookfield's industrial gas portfolio now offers a rare combination: low-risk, high-visibility cash flows (via contracts) and high-growth tailwinds (via tech/green policy). The 18-20x EBITDA multiple is a floor, not a ceiling—especially if Brookfield leverages DIG Airgas to enter adjacent markets like LNG or carbon capture.

Final Verdict: This Deal Is a Buy
Brookfield's potential acquisition of DIG Airgas isn't just a corporate move—it's a strategic stake in the twin engines of South Korea's future economy. For long-term investors, this is a chance to own a piece of infrastructure that's as essential to semiconductors as electricity itself. While the 19x EBITDA multiple may seem rich today, the stability of its contracts and the secular tailwinds of tech and green energy make this a compelling buy-and-hold opportunity.

The next time you read about a new chip breakthrough or a green hydrogen milestone in South Korea, remember: Brookfield's gas pipelines will be powering it.