OCI Co., a leading South Korean chemical and green energy company, will team up with chemical giant Tokuyama Corp. of Japan to open a joint venture for polysilicon for semiconductors in Malaysia.

OCI on Wednesday said its board of directors decided in a meeting at its Seoul headquarters to sign a memorandum of understanding with Tokuyama to launch the joint venture.

Tokuyama is the world's third-largest producer of polysilicon for chips.

Both sides will open the new company in Samalaju, Malaysia, in the first half of next year after signing a binding MOU next month and examining the business.

The joint venture's annual capacity will be 11,000 tons of semi-finished polysilicon products for semiconductors.

OCI will import semi-finished polysilicon items for semiconductors produced by the joint venture, post-process them at the company's domestic plant in Gunsan, North Jeolla Province, and sell the finished products to domestic and foreign customers.

The Gunsan plant's annual capacity is 4,700 tons based on finished products. The joint venture will add a post-processing facility for 5,000 tons of OCI's semi-finished products by the end of 2026.

In addition, OCI is considering additional investment to expand domestic operations of polysilicon for chips.

This investment is part of a preemptive response to rising demand due to the growth of the global semiconductor market for boosting OCI's standing as a semiconductor materials company.

"The establishment of this joint venture is the first step for OCI to take a major step forward as a company specializing in high-tech chemical materials like semiconductors and battery materials after its spinoff," Vice President of OCI Kim Teak-joung said. "Based on stable business for basic chemical materials, we will actively promote investment to get stronger as a semiconductor and secondary battery materials company."