(Report Producer/Author: Founder Securities, Chen Hang)
First, a detailed explanation of the eight major manufacturing materials of semiconductors: from 0 to 1
Knowing the Roots: Explaining Semiconductor Materials in Detail
Semiconductor materials are a type of semiconductor properties (conductivity between conductors and insulators, resistivity in the range of about 1mΩ ·cm ~ 1GΩ ·cm), in general, the conductivity increases with the increase of temperature. Semiconductor materials have the characteristics of heat sensitivity, photosensitivity, doping, etc., are important materials for wafer manufacturing and back-channel packaging, and are widely used in integrated circuits or various types of semiconductor devices in the fields of automotive, lighting, household appliances, consumer electronics, information and communications.
Semiconductor materials and equipment are the cornerstone of the semiconductor industry chain and the engine that promotes the innovation of integrated circuit technology. Fabs must purchase equipment and materials and obtain the appropriate process to function properly. On the other hand, the three restrict each other, and the improvement of materials often requires the synchronization and renewal of equipment and processes in order to effectively avoid the barrel effect.
Semiconductor materials: process upgrades and fab expansion, high prosperity in the industry
The semiconductor materials market is huge and the industry boom is high. The global semiconductor materials market size reached $55.3 billion in 2020, with a CAGR of 5% in the past five years. Semiconductor materials are mainly divided into wafer manufacturing materials and packaging materials, and in 2011, the market share of wafer manufacturing materials and packaging materials was equally divided, accounting for about 50%. In 2020, the proportion of wafer fabrication materials rose to 63.11%, and the proportion of packaging materials fell to 36.89%.
Semiconductor manufacturing materials compared to semiconductor packaging materials: the proportion of manufacturing materials has steadily increased
We believe that in terms of medium-term dimension, packaging materials can achieve domestic substitution earlier based on a higher localization rate. At the same time, the domestic sealing and testing is leading the world, the fixed increase and expansion of production is obvious, and the downstream drive is more direct. In terms of long-term dimension, semiconductor manufacturing materials have higher barriers and localization potential than packaging materials, so the long-term growth space of manufacturing materials is greater.
Semiconductor materials market: a wide variety, single market small
Among semiconductor manufacturing materials, silicon wafers accounted for the largest proportion (about 33%), followed by gases and photoresists and supporting reagents. Among semiconductor packaging materials, the packaging substrate accounts for the largest proportion (about 40%), followed by lead frames and bonding wires. Overall, the market for semiconductor materials in various segments is generally small.
Semiconductor silicon wafers: domestic 8-inch and 12-inch wafers are accelerated to verify, and it is expected to continue to grow at a high level in the future
According to Mordor intelligence data, the global silicon wafer market size of 10.79 billion US dollars in 2020 affected by the epidemic. With the continuous opening of new fab capacity in the future, semiconductor silicon wafers will grow at a compound annual growth rate of 6.1% in the next six years, and the market will reach $15.4 billion in 2026. The market share of 12-inch and 8-inch pieces is expected to be 71.2% and 22.8%, respectively, in 2021.
Semiconductor silicon wafers
8 inches compared to 12 inches: Now the mainstream products in the global market are 200mm (8 inches), 300mm (12 inches) diameter semiconductor wafers, and the equipment investment in the downstream chip manufacturing industry also matches the 200mm and 300mm specifications. 300mm chip manufacturing corresponds to the process of 90nm and below, and the manufacturing of 200mm chips corresponds to the process of more than 90nm. Considering that most of the 8-inch chip production lines were put into production earlier, and most of the equipment has been depreciated, the chip cost corresponding to the 8-inch piece is low, and the comprehensive cost of applying the 8-inch piece in some areas is not higher than that of the 12-inch piece.
Competition pattern and market structure: Since 2008, 12-inch semiconductor wafers have gradually become the core products, and the global silicon wafer market structure (by size) in 2021 has shown a significant growth trend. By 2018, logic circuits and memory accounted for more than half of the global semiconductor market size, and memory contributed to the main increase in the size of the global semiconductor market for two consecutive years. In 2021, 12-inch and 8-inch silicon wafers are expected to account for 71.2% and 22.8% respectively.
Global semiconductor silicon wafer market outlook: out of stock price increase continued
According to the announcement of Xinyue Chemical, global semiconductor silicon wafer shipments are increasing year-on-year and month-on-month, and almost all silicon wafer suppliers have a high turnover rate. The demand for new 12-inch tablets mainly comes from logic epitaxial sheets, and 8-inch tablets are in serious shortage due to downstream applications (automotive electronics, etc.) and global economic recovery. SUMCO announcement shows that the spot price of 21Q4 semiconductor silicon wafers continues to rise, and the long-term negotiated price of semiconductor silicon wafers will rise in 2022-2026. We believe that the global silicon wafer shortage will continue at least until the end of 2023.
China's semiconductor wafer industry chain: upstream raw materials rely on imports
China's semiconductor silicon wafer industry chain involves electronic grade polysilicon manufacturing, semiconductor silicon wafer manufacturing, semiconductor device manufacturing and other links, the main types of participants are semiconductor silicon wafer manufacturers, semiconductor industry chain integration manufacturers and multi-field layout of semiconductor material manufacturers.
Electronic gases: high growth under oligopolies
According to techcet data, the global electronic gas market size of 5.85 billion US dollars in 2020 is expected to exceed 8 billion US dollars in 2025, with a compound annual growth rate of 6.5%. In 2020, the global electronic special gas market size is 4.19 billion US dollars, and it is expected to exceed 6 billion US dollars in 2025, with a compound annual growth rate of about 7.5%. In the global electronic gas market in 2020, according to value, electronic bulk accounted for 28.4%, and electronic specialty accounted for 71.6%.
China's electronic special gas market: sustained high growth in the future
Electronic special gas, that is, electronic special gas, is one of the indispensable foundation and supporting materials in the production of electronics industries such as large-scale integrated circuits, planar display devices, compound semiconductor devices, solar cells, and optical fibers. Electronic special gases belong to the varieties with high added value in industrial gases, and the difference with traditional industrial gases is that they are of higher purity (such as high-purity gases) or have special uses (such as participating in chemical reactions).
Domestic electronic gas brief analysis: forge ahead
Most of the domestic special gases rely on imports, and in 2018, overseas large gas companies accounted for more than 85% of the market share, the localization rate was less than 15%, and the import restrictions were more serious. With the gradual breakthrough of technology, domestic gas companies in the field of electric light source gas, laser gas, disinfectant gas and other fields of rapid development, but compared with foreign gas companies, most of the domestic gas companies supply products are still relatively single, the purity level is not high, especially in the integrated circuit, LCD panel, LED, optical fiber communication, photovoltaic and other high-end fields, related special gas products mainly rely on imports.
Photoresist
Classification and three downstream applications: photoresist After decades of continuous development and progress, the application field continues to expand, derived from a very large number of types, according to the application field, photoresist can be divided into semiconductor photoresist, flat panel display photoresist and PCB photoresist, its technical barriers are reduced in turn. Correspondingly, PCB photoresist is currently the fastest domestic replacement progress, LCD photoresist replacement progress is relatively fast, semiconductor photoresist current domestic technology is the largest gap compared with foreign advanced technology.
KrF, ArF as the mainstream: According to the American Semiconductor Industry Association SIA data, in 2018, high-end ArF dry and immersion photoresists accounted for a total of 42% of the market share, And KrF photoresists and g-line/i-line photoresists accounted for 22% and 24% of the market share, respectively. At present, ArF photoresist has become the most demanded photoresist products in the field of integrated circuit manufacturing, with the further development of the integrated circuit industry in the future, ArF and KrF photoresists are facing broad market opportunities.
Photomask version: high market concentration, dominated by foreign companies
The mask plate is the graphic master used in the lithography process in microelectronics manufacturing. The global semiconductor photomask plate market continues to grow. According to SEMI statistics, the global semiconductor chip mask plate market size in 2019 is 4.1 billion US dollars, and it is expected that the market size will reach 4.4 billion US dollars in 2022.
Wet Electronics Chemicals: The demand is dominated by general-purpose wet electronics
Wet electronic chemicals are the key materials of the wet process of the electronics industry, according to the use can be divided into general chemicals (ultra-clean and high-purity reagents) and functional chemicals (represented by photoresist supporting reagents), general wet electronic chemicals refer to liquid chemicals that are widely used in integrated circuits, liquid crystal displays, solar cells, LED manufacturing processes, mainly including hydrogen peroxide, hydrofluoric acid, sulfuric acid, phosphoric acid, hydrochloric acid, nitric acid, ammonium hydroxide, etc.; functional wet electronic chemicals refer to the special function through compound means, Formula or compound chemicals that meet the special process needs in manufacturing, mainly including developers, peeling fluids, cleaning fluids, etching fluids. In 2019, China's demand for wet electronic chemicals was mainly general wet electronic chemicals, accounting for 88.2% of the market share.
CMP: Domestic substitution is accelerating, and CMP materials are ushering in development opportunities
CMP polishing materials include polishing fluids (approximately 50% of the entire polishing material), polishing pads and diamond discs. The CMP process is to achieve the removal of different materials in the micro/nanometer scale on the wafer surface through the combination of surface chemistry and mechanical grinding technology, so as to achieve a high (nano-level) flattening effect on the wafer surface, so that the next step of the lithography process can be carried out.
Target material: high localization rate
According to the global semiconductor manufacturing materials of 34.9 billion US dollars in 2020 and the proportion of about 3% of the target materials, the global target market size in 2020 is about 1.05 billion US dollars. According to techcet data, the global target market will grow at a compound annual growth rate of 5% from 2020 to 2024, and it is estimated that the global sputtering target market will be about 1.28 billion US dollars in 2024.
Precursors: Detailed explanation of the main applications
Precursor is the main raw material of the semiconductor thin film deposition process, chemical properties of semiconductor precursors for carrying target elements, gaseous or volatile liquid state, with chemical thermal stability, while having the corresponding reactivity or physical properties of a class of substances.
Semiconductor materials versus semiconductor devices: Demand is rising steadily
As consumables, semiconductor materials are in demand every year, and the overall rise is steady, and the volatility and periodicity are much lower than that of semiconductor devices. At the same time, the global semiconductor materials market size accounts for a relatively stable proportion of the semiconductor market size, maintaining an 11%-13% range level. (Source: Future Think Tank)
Second, the three major catalysts that drive the growth of semiconductor materials
Short-term highlights of semiconductor materials: price increases
We believe that the boom cycle of semiconductors has a general law of "equipment first, manufacturing relay, and material shortage". Considering that domestic fabs have entered the expansion process, and the new production capacity will be opened in 2022. The expansion of wafer capacity will directly lead to a shortage of supply on the upstream material side, resulting in a periodic "silicon crisis". Shin-Etsu Chemical, a major global silicon wafer manufacturer, has issued a price increase statement, saying that it will raise the price of some silicon wafer products in April 2021. At the same time, Li Wei, secretary of the board of directors of the Shanghai silicon industry, said at the SEMICON CHINA 2021 conference that there are currently some categories of price increases, not all, and the company's orders for silicon wafers have exceeded the supply capacity.
Semiconductor material substitution logic: priority to enter the new production line of the fab
From 2012 to 2020, China's semiconductor materials market accounted for a steady increase in the proportion of the world, from 12.28% in 2012 to 17.7% in 2020, ranking second in the world Chinese mainland. This is mainly due to: First, the continuous improvement of the technical level of domestic enterprises, some materials have been able to achieve localization substitution. Second, semiconductor materials have shifted to China with the synchronization of the semiconductor industry, and China has become one of the main battlefields of semiconductor materials.
Medium-term highlights of semiconductor materials: verification acceleration
In general, the downstream certification barriers of semiconductor materials are high and the customer stickiness is large. Customer certification barriers are the main factors hindering the development of domestic semiconductor materials, and there are certain difficulties in the short-term breakthrough of barriers for enterprises, and some enterprises will quickly enter the field of related semiconductor materials through mergers and acquisitions. At present, there are very few companies that can completely break through the barriers, and most of the material segments are controlled by companies in Japan, South Korea, Europe and the United States.
Long-term focus of semiconductor materials: wafer capacity expansion
We have discussed that the revenue of Chinese semiconductor materials is highly positively correlated with the production capacity of Chinese-funded fabs, so the long-term development trend of Chinese semiconductor materials depends on the pace of capacity expansion of Chinese-funded fabs. According to IC insight, in 2020, the size of China's wafer foundry market increased by 26% year-on-year to 14.86 billion US dollars, and the local fabs SMIC, Huahong Semiconductor, and Wuhan Xinxin accounted for only 25% of the domestic share, with huge room for improvement. In December of the same year, Chinese mainland accounted for 15.3% of global wafer production capacity, only 0.5% behind Japan.
Third, the investment outlook of semiconductor materials
Summary of Japan's semiconductor material experience: grasp the opportunity of semiconductor industry transfer
In the 1970s, Japan relied on the advantages of the home appliance industry to drive the overall upgrading of semiconductor technology, a number of IDM companies rose with it, and the semiconductor industry shifted from the United States to Japan for the first time. At that time, semiconductor storage, especially DRAM, became Japan's primary industry. In 1986, Japanese semiconductor chips accounted for 40% of the global share, and the highest in the DRAM field accounted for 80% of the share, becoming the focus of global semiconductor chip manufacturing.
Summary of Japan's semiconductor material experience: the combination of production and government
In the 1970s, Japan's Ministry of International Trade and Industry, Fujitsu, Hitachi, Mitsubishi, Nippon Electric, and Toshiba established the VLSI Joint R&D Body, which brings together talents from all over the country and cooperates with industry, government, and academia to jointly develop and develop. The total cost of the project was 73.7 billion yen, of which 29.1 billion yuan was funded by the government, accounting for 39.5%, and about 1,000 patents were obtained during the four years of implementation. The success of the VLSI program gave Japan a head start in the field of VLSI, driving the success of Japanese RAM.
The state has issued a number of policies to vigorously support semiconductor materials
The rapid development of semiconductor materials in China is inseparable from the support of relevant industrial policies. Special policies and large funds have helped the upstream and downstream integration of the industry, and the willingness of mainland independent fabs to certify domestic materials has increased. At the same time, the second phase of the big fund is more inclined to the field of semiconductor manufacturing equipment and semiconductor materials than the first phase, so as to drive the comprehensive development of the entire semiconductor industry chain. In summary, China will firmly grasp the opportunities of this round of semiconductor industry transfer.
Investment strategy of semiconductor packaging materials
Advanced Packaging Perpetuates Moore's Law: Moore's Law's innovation process has made huge advances in semiconductor performance and cost: Since Moore's Law was proposed in 1975, the number of transistors per wafer has increased by nearly 10 million, the processor speed has increased by 100,000 times, and the cost per transistor per wafer has decreased by 45% per annualized compound.
Advanced Packaging VS Conventional Packaging: According to Yole data, the compound annual growth rate of global packaging revenue is 4%. Among them, the annual compound growth rate of the advanced packaging market is 7%, and the revenue of advanced packaging will reach 42.2 billion US dollars by 2025, while the compound annual growth rate of traditional packaging is only 2%. In the run-and-go scenario, the share of global advanced package revenue is expected to rise from 38% in 2014 to 49.4% in 2025.
Packaging substrate: PCB industry after the 1980s, due to the rapid development of IC design and manufacturing technology in accordance with the "Moore's Law", the advent of micro semiconductor components, large-scale integrated circuits and ultra-large scale integrated circuit design appeared, high-density multilayer packaging substrate came into being, so that the integrated circuit packaging substrate was separated from the ordinary printed circuit board, forming a proprietary integrated circuit packaging substrate manufacturing technology.
As a special printed circuit board, the package substrate is a basic component that connects a higher precision chip or device with a lower precision printed circuit board. Compared to the PCB board's line width/line spacing 50μm/50μm parameters, the package substrate can achieve line width/line spacing < 25μm/25μm parameters. The overall refinement of the PCB board improves the cost much higher than the cost of interconnecting the PCB and the chip by packaging the substrate.
Packaging substrate market
According to Prismark data, the global package substrate output value in 2020 was $10.19 billion, an increase of 25.2% year-on-year, and the annual compound growth rate of package substrates in the next 5 years was 9.7%, and the output value of $16.19 billion was achieved in 2025. Shennan Circuit is the largest domestic packaging substrate enterprise, and its packaging substrate business achieved sales revenue of 1.544 billion yuan in 2020, an increase of 32.67% year-on-year, but only accounted for 2.94% of the global packaging substrate.
Packaging substrates started in Japan and then extended to South Korea and Taiwan, where the market share is more than 90%. In recent years, Japanese packaging substrate companies have gradually withdrawn and reduced their scale, focusing on high-end products, represented by Iiden, Shinko, Kyocera, etc. Japanese companies have very strong technical strength, occupying the main market for the substrate required for CPU packaging with the largest profit margin in the packaging substrate, while the large-scale substrate is mainly distributed in South Korea and Taiwan. In the BGA package, the substrate cost accounts for 40%-50%; in the FC package, the substrate cost accounts for 70%-80%.
Excerpts from the report:
(This article is for informational purposes only and does not represent any of our investment advice.) For usage information, see the original report. ）
Featured report source: [Future Think Tank]. Future Think Tank - Official website