Author/Baked bun under the stars
Edit/Spinach Starry Sky
Typography/Fried liver under the stars
If you want to say what word in the technology circle can be on the hot search last year, it must be a card neck, especially in the semiconductor industry, which is known for its high precision.
If you want the crops to ripen, you always have to have a hoe, and if you want a delicious meal, you always have to have kitchen utensils. The hoes and kitchen utensils in the semiconductor industry are not so easy to obtain.
The story of asML and SMIC (00981) about the lithography machine in the Netherlands has been stirred up by the intervention of the lighthouse nation. Polishing machines and ion implantation equipment were monopolized by the Americans. Even the semiconductor test and packaging process, which the Chinese legion is most proud of, has to look at the german face of its equipment.
Is the manufacture of semiconductor equipment really that difficult? Of course, it is not without a glimmer of hope, at least in the field of etching machines, we also have semiconductor heroes such as Zhongwei Company (688012) and North Huachuang (002371), in the trinity of policy, capital, talent, all-round support, and strive to move towards the road of comprehensive domestic substitution.
Physical drawing of the etching machine
First, the importance of etching machine is self-evident
The word etching machine sounds strange at first glance, but I will make you an analogy and you will understand. We say that the process from silicon wafer to chip is like the process of carving a piece of red paper into a window flower, in which the lithography machine acts as a pencil to draw the pattern. The etching machine is the scissors that carved out the window flowers along the pattern.
Wafer Processing (Semiconductor Manufacturing Technology)
Therefore, the accuracy of lithography directly determines the size of the component depiction, and the accuracy of etching determines whether the size of the lithography can be actually processed, and the two links are equally important in the manufacturing process of semiconductors. Which link drags its feet, it will eventually affect the semiconductor process and product yield.
In order to ensure the accuracy of etching, the current etching technology is mainly dry etching, that is, mainly using plasma for etching. Because of the importance of etching machines, it has become the largest sales volume of all semiconductor equipment (slightly higher than lithography machines), becoming the jewel in the crown.
Proportion of sales of various types of integrated circuit equipment (Head Leopard Research Institute)
In 2020, the global semiconductor equipment market reached a new high of $70 billion, accounting for the first time in the world Chinese mainland, and the industry accelerated its transfer to China. The market for etching equipment exceeds $13 billion. In the future, with the large-scale rollout of 5G infrastructure and the popularity of server cloud computing, the demand for related chips will maintain a cyclical upward growth trend. According to the data given by various research institutions, the global market size of etching machines will reach 15 billion US dollars in three years, close to 100 billion yuan, and another 100 billion level market will be born.
Etch Market Size Forecast (Announcement of Zhongwei Company)
Second, the road ahead is long, but full of confidence
If you look at the competition in the etch segment, you will find that oligopolism is the most distinctive feature. Lam Semiconductor, Applied Materials and Tokyo Electronics, the three of which eat more than 90 percent of the pie. Such a mature market pattern also emerged after many rounds of industry reshuffle.
Global etching machine market share (SEMI)
According to the author's rough statistics, in the 80s of the last century, there were at least 20 etching equipment manufacturers in the world, when applied materials occupied the top position in the market, but Lam and Tokyo Electronics made a late attack, in the 90s with a new generation of inductive coupling plasma technology (ICP, high plasma density, independent control of ion density and energy), increasing market share year by year, in 1994 for the first time to win the first position in the market share, laying the position of the leader of etching products, In the nearly 30 years since, Lam Semiconductor has never let Applied Materials catch up with itself, but its throne has become more and more stable.
Comparison of two main plasma dry etching techniques
It can be said that Lam Semiconductor has achieved cornering overtaking with its accurate grasp of next-generation etching technology. At this moment, I think of the story of Canon and Sony on the track of the lithography machine equipment next door.
History is always strikingly similar.
It is said that it is easy to fight the country, but it is difficult to defend the country. On the etch track, the author believes that once the moat is established, the rest is to lie and win.
Having said all that, let's take a look at the few players in The country. It is commendable that Zhongwei Company and Beihua Creation are up-and-coming stars, and some technical levels and application fields have reached international standards for similar products. Zhongwei's etching machines have been applied to the world's most advanced 7nm and 5nm production lines. According to statistics, in 2019, China's localization rate in the field of etching reached 18%, and there is reason to believe that this number will increase in the future.
Then you may ask, how did China's players break through the oligopoly situation formed abroad and achieve a breakthrough? The author briefly believes that there are three reasons:
1. Talent is the first resource of scientific and technological innovation. In 2004, at the age of 60, Yin Zhiyao, with years of deep cultivation in the semiconductor industry, returned to China to establish Zhongwei Company, and successfully developed the first capacitive coupling plasma (CCP) etching equipment in 2007. There were many talents like Yin Zhiyao at that time, such as Zhang Rujing of SMIC and Zhu Yiming of GigaDevice Innovation (603986), who made outstanding contributions to the domestic semiconductor industry;
2. Capital provides fertile soil for the blossoming and fruiting of technology. For example, the previous national big funds and science and technology innovation board, to today's Beijing Stock Exchange, are escorting semiconductor start-ups. According to the author's understanding, Zhongwei Company should be the first investment target of the National Semiconductor Big Fund, and it received an investment of 480 million yuan in 2014. In the semiconductor industry, money is not omnipotent, and no money is a panacea. International semiconductor giant Lam Semiconductor invests more than $1 billion a year in research and development (accounting for 14% of revenue), which can be seen;
3. Monofilament does not form a line, and lone trees do not become a forest. The development of an industry, a single point of breakthrough is certainly not enough, to the industrial chain players upstream and downstream to work together, there is a hope of breaking through the monopoly, analogy power batteries, photovoltaics and other industries, are so over. Of course, semiconductor equipment is more difficult and needs to walk longer. For example, Yangtze River Storage, founded in 2016, is an IDM company (integrated component manufacturer) that develops its own 3D NAND memory. Yangtze River Storage provides support for China's etching machine equipment manufacturers, and the etching machines of Zhongwei Company and North Huachuang account for 17% of the total number of tenders. Therefore, the upstream and downstream are bound to each other, which is definitely a win-win result.
Third, only by facing up to the gap can we rise up and fight back
First of all, from the perspective of the return level of etching machine players, we still have this certain gap with the three international giants, and the return level of overseas leaders is basically 5-6 times that of Zhongwei and Huachuang.
Return data of semiconductor equipment manufacturers (Ta Jian Research)
If you split according to the DuPont three-point method, the author looked at it, and the difference in returns is mainly in two aspects:
1. Net profit margin on sales. The net profit margin of Zhongwei and Huachuang is at the level of about 10%, while this data is shown in the statements of overseas giants at about 20%. After all, the high moat is there, and the people in the city, although they can't sit back and relax, have a lot of say;
2. Total asset turnover. Applied Materials and Lam Semiconductor have a turnover rate of 0.79 times, while Huachuang has only 0.34. What does it say? Domestic players will relax the equipment use verification period to attract downstream customers, so a large number of sales equipment is in the stage of customer verification, this part of the equipment will be recorded as inventory, pulling up inventory at the same time, pulling down the turnover rate.
Nevertheless, the real start of China's etching equipment is the beginning of the 21st century when a group of overseas talents return to China to start a business, and in less than 20 years, it has achieved breakthroughs in some equipment models, breaking the monopoly and blockade of foreign technology. This is already a very rare thing. We often think that the steps from 0-1 are not easy, and the relative traces of 1-10 are full of hope for Chinese semiconductor equipment suppliers.
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.