Hu Shiming, Guo Lingyan from CNCIC
Core raw materials urgently need to accelerate localization
Chips were China’s largest imported commodities in 2018-2020, with an annual import value of over US$ ($) 300 billion. The US’ ban and restrictions prompted Huawei and some other companies to reserve chips in advance. In 2020, China’s import value of integrated circuit climbed to more than $370 billion, up by 15% year on year and accounting for around 18% of China’s total import value of that year.
China is highly reliant on imports of high-end chips due to its low localization rate and is still facing obstacles in such areas as equipment, materials, design and manufacturing. The chip supply chain security has become the hot spot since 2019. The weakness of the domestic integrated circuit industry chain have become an urgent problem to be solved.
As key materials for chip manufacturing, electronic chemicals are of a wide variety and high technological threshold and their supply is dominated by European, the US and Japanese companies. These pose severe challenges to China’s domestic chip industrial chain. Core raw materials, including photoresist, electronic gas and wet electronic chemicals see faster domestic products substitution.
Strong government support to integrated circuit development
In recent years, the central government gave policy, fund and talent training supports to promote the upgrading of integrated circuit industry, which enhanced the electronic chemical industry development. On the policy side, China’s State Council and the ministries and commissions issued a number of preferential policies to support the development of strategic emerging industries such as integrated circuits. Related supportive policies released since 2020 are listed in Table 1.
Table 1 Government’s policies support electronic chemical industry development
Capital market boosts development of chip manufacturing and upstream electronic chemicals industry
On July 16, 2020, China’s largest chip manufacturer SMIC was officially listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange. SMIC can provide foundry for different technology nodes ranging from 0.35 micron to 14 nanometres. A total of RMB53.2 billion was raised from the listing.
National IC Industry Investment Fund Phase II Co., Ltd. raised RMB200 billion funds, mainly investing in the integrated circuit value chain. Three of its publicly invested projects in 2020 targeted SMIC.
In the past two years, emerging capitals flooded the electronic chemical industry on the back of downstream demand and policy support. More electronic chemical enterprise are expected to leverage the capital market. Table 2 shows the general development of the electronic chemical industry’s capital market.
Table 2 Electronic chemical industry capital market development
1. Red Avenue New Material
Red Avenue New Material Group established its wholly-owned subsidiary Shanghai Red Avenue Electronic Material Co on June 11, 2020. Shanghai Red Avenue acquired a combined 42.26% equities of Beijing Kempur Microelectronics in June, November 2020 and in February 2021 and became the largest shareholder of the latter. Beijing Kempur Microelectronics is a leading domestic semiconductor photoresist manufacturer and main products include integrated circuits g line, i line, KrF photoresist, semiconductor negative adhesives and packaging adhesives etc.
In December 2020, Shanghai Red Avenue Electronic Materials, Shanghai Zhengfang Chemical and Tianjin Xianzhixin Investment Center formed a consortium to jointly transfer the 100% equity of Beijing Asahi Electronic Materials, a wholly-owned subsidiary of BOE through the public delisting from the Beijing Equity Exchange. Shanghai Red Avenue Electronic Materials transferred 45% equity of Beijing Asahi Electronic Materials for RMB191.25 million. Beijing Asahi Electronic Materials is specialised in R & D, production and sales of photoresist for TFT-LCD.
Shanghai Red Avenue plans to invest RMB570 million to build a 11 kt/a semiconductor, photoresist for flat panel display and 20 kt/a supporting reagent project, which has obtained environmental assessment on March 15, 2021 and is expected to launch operation at the end of 2021.
2. Jiangsu Yoke Technology
On February 25, 2020, Jiangsu Yoke Technology’s subsidiary S & Y International Limited and LG Chem signed a business transfer agreement for the purchase of part of the operating assets of LG Chemical's photoresist division at a price of 58 billion won (approximately RMB330 million).
3. Shanghai Sinyang
On August 14, 2020, Shanghai Sinyang announced that its plans to raise funds of RMB1.5 billion. According to the announcement, RMB732 million will be used for the R & D and industrialization project of high-end photoresist for integrated circuit manufacturing. The project mainly develops ArF dry photoresist and KrF thick film photoresist products and is expected to put into industrialization by 2023. Shanghai Sinyang will implement the project. The remaining RMB348 million will be used in the integrated circuit key process material project, to be implemented by Shanghai Sinyang’s wholly-owned subsidiary Anhui Sinyang, to expand the 17 kt/a chip copper interconnection ultra-high-purity copper sulfate electroplating solution series, chip etching ultra-pure cleaning solution series and other products.
4. Shengquan Group
The company plans to raise funds of RMB918 million to build phenolic high-end composite materials and resin supporting expansion project, mainly including 230 kt/a phenolic resin (180 kt/a liquid resin, 50 kt/a solid resin) and 260 kt/a 37% formaldehyde unit.
5. Spectrum Materials
On May 12, 2020, Spectrum Materials Corporation announced that it finished the B round financing, which will be used for product R & D, production line upgrading and expanding key overseas markets, including Japan, South Korea and the US. The company’s products germane, arsine, phosphorane, diborane and other rare gases, and various mixed gases have been successfully applied in 28, 20, 16/14, 10 nanometre and other advanced processes in the field of integrated circuits.
6. GenTech Technology
On August 20, 2020, Shanghai GenTech Co was successfully listed on the science and technology innovation board of the Shanghai Stock Exchange. It raised funds of RMB1 billion, mainly used to improve the key supporting equipment capacity in the semiconductor, new energy, new light source and other industries, as well as the production capacity of process development supporting facilities and the expansion projects of ultra-high purity arsine and phosphine.
7. Greenda
On August 19, 2020, Hangzhou Greenda Electronic Materials was listed on the main board of the Shanghai Stock Exchange. The company is specialised in the R & D, production and sales of wet chemical products. Its core product electronic grade tetramethylammonium hydroxide (TMAH developer) was the outcome of its independent innovative research and development. It raised funds of RMB544 million from this listing and is mainly used in Sichuan Greenda’s 100 kt/a electronic materials and technological centre project.
New Progress made in Three Key Electronic Chemicals R & D
Since 2020, new progress has been made in research and development in three key areas including photoresist, electronic gas, and wet electronic chemicals, with booming capacity expansion. Details are listed in Table 3.
Table 3 Capacity Construction or R & D Overview of Key Electronic Chemicals
Photoresist
1. JingruiChem
JingruiChem’s subsidiary Suzhou Ruihong produces photoresist and supporting chemicals. Suzhou Ruihong Electronic Chemical realised mass production of i line photoresist by participating the national 02 special project. It has completed test of KrF photoresist and the product resolution reaches the technical requirement of 0.25～0.13μm.
On January 19, 2021, the company purchased photoresist equipment ASML XT 1900 Gi and ArF immersion lithography machine, which can be used to develop high-end photoresist with a maximum resolution of 28nm.
On March 30, 2021, the environmental impact assessment (EIA) result of RuijingChem’s high-end photoresist R & D project for integrated circuits was released to solicit public opinions. The company will invest nearly RMB500 million to enlarge an ArF photoresist R & D laboratory building for resin synthesis, photoacid generator synthesis, photoresist preparation and physical and chemical properties testing experiment.
On December 28, 2020, Jingrui (Hubei) Microelectronic Materials Co’s 185 kt/a (phase I 105 kt/a) electronic-grade microelectronic materials project passed EIA. The project produces photoresist and related supporting functional materials, electronic-grade hydrogen peroxide and electronic-grade ammonia, with a total investment of RMB1.52 billion and to be built in two phases. The first phase project will have an investment of RMB650 million.
2. Nata Chem
In November 2020, Nata Chem’s wholly-owned subsidiary Ningbo Nata officially started up the Arf photoresist product development and industrialization project, including the 5 t/a Arf dry photoresist, 2 t/a immersion photoresist and 45 t/a photoresist supporting high-purity reagent. On December 17, 2020, the company announced that its self-developed ArF photoresist product successfully passed customer certification.
On January 15, 2021, Nata Chem got EIA approval for its advanced photoresist raw materials and supporting materials industrialization project, with 1 kt/a photoresist diluent, 137.7 t/a photoresist supporting materials including ArF photoresist resin, KrF photoresist resin, bottom anti-reflective layer resin, functional monomer, photosensitizer and additives.
3. Shanghai Bokang
On June 5, 2020, Shanghai Bokang Corporate Group settled its photoresist equipment and photoresist material project in Gaoling district, Xi’an of Shaanxi province, with a total investment of RMB1.3 billion
Shanghai Bokang’s subsidiary Xuzhou Bokang Information Chemical Co is adjusting and test the equipment of the 1.1 kt/a photoresist material and 10 kt/a electronic-grade solvent relocation and technological reform project, which is expected to start up in June 2021.
4. EMT
On August 22, 2020, Eternal Material Technology (EMT) held a ground-breaking ceremony for its new-type display supporting electronic materials production base project in Hefei, Anhui. Covering an area of 100 Mu, the project will have an investment of RMB500 million and will include a 15 t/a high-purity OLED new material and 4.5 kt/a photoresist and other electronic materials to be put into operation in the second half of 2021.
5. Xiamen Hengkgun
On November 24, 2020, Xiamen Hengkun got EIA approval for its bottom anti-reflective material R & D and industrialization projects suitable for immersion lithography. The project has an original investment of RMB83 million and an additional investment of RMB102 million, with a laboratory area of 260 square metres and 1 t/a semiconductor photoresist material.
6. Sunmun Technology
On January 18, 2021, Sunmun Technology used its own or self-raised funds of RMB220 million to develop and build 56 kt/a advanced photosensitive materials and 1 kt/a photoresist nano-pigment dispersion project. Products include 30 kt/a photopolymerizable monomers, 20 kt/a high-performance resins, 10 kt/a photoresist nano-pigment dispersion and 6 kt/a UV nano-pigment paste. The project is expected to be completed and put into production by the end of September 2022.
7. Kelaifu
On January 23, 2021, Shandong Weihai Nanhai New District held projects signing ceremony for 2021. These projects include Shandong Kelaifu Optoelectronics Technology’s 1.6 kt/a photoresist key materials for display, colour paste and photoresist industrialization project, with a total investment of RMB150 million. Products cover 100 tons of photoresist key materials, 300 tons each of red, green, blue and black paste (a total of 1.2 kt) for display and 300 tons of photoresist.
Electronic gas
1. Liming Research Institute
On June 3, 2020, the sub-project “High-purity Carbon Tetrafluoride and Sulfur Hexafluoride R&D and Pilot Test” of the national science and technology major special project “Very Large Scale Integrated Circuit Manufacturing Equipment and Complete Process” undertaken by ChemChina Liming Research Institute passed testing and review of the National Major Special Project Team. It marked the localization of high-purity fluorine-containing electronic gas which is needed by China's very large-scale integrated circuit industry.
2. Haohua Gas
On October 22, 2020, ChemChina Haohua Gas was founded in Luoyang, Henan and the 4.6 kt/a special fluorine-containing electronic gas project was also started. The project, with a total capacity of 4.6 kt/a will have an investment of RMB914 million and will adopt independent research and development patent technology to produce special fluorine-containing gas. Products will include 3 kt/a nitrogen trifluoride, 1 kt/a carbon tetrafluoride and 600 tons/a tungsten hexafluoride.
3. HBIS Group Hansteel Company
In April 2020, the high-purity special gas project laboratory built by HBIS Group Hansteel Company passed the acceptance of Hebei Development and Reform Commission. The laboratory independently developed a set of automatic gas distribution device and used HBIS Group Hansteel Company’s self-produced high-purity rare gas to formulate two kinds of electronic mixed gas.
4. Linggas
On May 18, 2020, Linggas Group Tianjin Linggas Co held a ground-breaking ceremony of its electronic R & D industrialization base project, with a total investment of RMB320 million to build 6 kt/a, 47 kinds of electronic special gas products.
5. China Silicon Corporation
On December 30, 2020, China Silicon Corporation officially kicked off the electronic information materials project in Henan MengjinHuayang industry cluster. The project covers an area of 715 Mu and will have an investment of RMB4.15 billion. Phase I project covers an area of around 300 Mu and will have an investment of RMB1.55 billion, expected to be completed in October 2022 to build zone-grade melting polysilicon for integrated circuits, electronic-grade polysilicon, silicon-base electronic gases, high-purity silicon tetrachloride production lines for optical communications, silicon carbon anode materials, octamethylcyclotetrasiloxane and other electronic gas pilot lines, etc. Silicon-based electronic gas products include 80 tons of tetrachloride, 2 000 tons of trichlorosilane, 500 tons of dichlorodihydrosilane, 50 tons of hexachlorodisilane and 500 tons of ethyl orthosilicate.
6. Inner Mongolia Xingyang Technology
In November 2020, Inner Mongolia Xingyang Technology approved and initiated the 1.2 kt/a chip electronic-grade high-tech silicon-base project, including 100 t/a electronic-grade hexachlorodisilane, 500 t/a electronic-grade dichlorodihydrosilane, 100 t/a electronic-grade monochlorotrihydrosilane, 100 t/a electronic-grade disilane and 300 t/a 11N electronic-grade polysilicon. On January 26, 2021, the project carried out the first EIA.
7. Heyuan Gas
On December 4, 2020, Heyuan Gas’ wholly-owned subsidiary Heyuan Qianhong Electronic Special Gas Co got the EIA approval for its 80 kt/a electronic-grade ultra-purity ammonia and 32 000 cubic metre electronic-grade high-purity hydrogen electronic special gas industrial park. The project has a total investment of RMB280 million and will be built in two phases. The phase I project is designed to produce 80 mcm high-purity hydrogen and phase II project will include 80 kt/a ultra-purity ammonia and 240 mcm high-purity hydrogen.
8. Wuhan New Silicon Technology
On January 5, 2021, Wuhan New Silicon Technology’s wholly-owned subsidiary Wuhan New Silicon Technology Qianjiang Co released the EIA for its 14.7 kt/a electronic semiconductor material project to solicit public opinions and entered into the project design phase. The expansion project will have a total investment of RMB210 million, including 50 tons of hexachlorodisilane, 150 tons of ALD/CVD precursors, 1 kt of boron trichloride, 5 kt of ethyl orthosilicate, 3 kt of titanium tetrachloride, 3 kt of trichlorosilane, and 2.5 kt of high-purity hydrogen chloride.
9. Taihe Gases
On April 2, 2021, Taihe Gases (Jingzhou) Co released the EIA result for public opinions of its 3 685 t/a semiconductor special gas project. The expansion project will have a total investment of RMB207 million to produce 100 standard cubic metres/hour of high-purity hydrogen, 12 000 standard cubic metres/year of ultra-purity hydrogen, 3 kt/a hydrogen chloride, 30 tons of titanium tetrachloride, 0.5 tons of hafnium tetrachloride, 0.5 tons of germanium tetrafluoride, one ton of sulfur dioxide and 300 tons of hydrogen bromide.
Wet electronic chemicals
1. Xingfa Group
On April 18, 2020, Xingfa Group announced its initial plan for private placement to raise funds of a maximum of RMB880 million to invest in its subsidiary Xingfu Electronic Materials Co’s 60 kt/a chip-use ultra-high-purity electronic-grade chemical project and 30 kt/a electronic-grade phosphoric acid technology upgrade project.
2. DFD Chem
On July 12, 2020, DFD Chem announced to raise funds of no more than RMB1.15 billion for its 30 kt/a ultra-clean, high-purity electronic-grade hydrofluoric acid project, 30 kt/a ultra-clean, high-purity wet electronic chemical project and 30 kt/a high-performance anhydrous aluminum fluoride technology upgrade project. Of these, the 30 kt/a ultra-clean, high-purity wet electronic chemical project includes 12 kt electronic-grade ammonia, 12 kt electronic-grade nitric acid and 6 kt electronic grade BOE etching solution.
3. Denoir Technology
On August 13, 2020, Jiangsu Denoir Technology signed an agreement on investment project in Hubei and planned to invest RMB160 million to build a 300 kt/a ultra-purity electronic chemical project in Qianjiang city of Hubei province to mainly support enterprises such as Wuhan Xinxin and Yangtze Memory. Phase I project’s EIA result was released for public opinions on March 17, 2021, with a total investment of RMB90 million, which will include 135 kt/a electronic wet chemicals, 30 kt/a ultra-purity hydrogen peroxide, 30 kt/a ultrapure ammonia, 15 kt/a ultra-purity isopropanol (IPA), 20 kt/a etching solution, 20 kt/a stripping solution, 10 kt/a developer solution (TMAH), and 10 kt/a thinner.
4. GrandiT
On January 4, 2021, GrandiT released the EIA result of its 149 kt/a ultra-purity electronic chemical project for public opinions. With a total investment of RMB1.34 billion, the project is designed to produce 149 kt/a ultra-purity electronic chemicals, including 60 kt/a sulphuric acid, 15 kt/a ammonia, 24 kt/a hydrofluoric acid, 20 kt/a nitric acid, 20 kt/a hydrogen peroxide and 10 kt/a IPA.
5. Pucheng Wuyue
On March 2, 2021, Pucheng Wuyue Electronic Technology obtained EIA approval for its 80 kt/a ultra-purity wet electronic chemical project, which was already put into construction. With a total investment of RMB160 million, the project will produce 15 840 t/a of hydrofluoric acid, 11 kt/a nitric acid, 2.64 kt/a sulphuric acid, 30 320 t/a sodium hydroxide and 20 200 t/a sodium hydroxide.
6. Pucheng Kunpeng
On March 26, 2021, Pucheng Kunpeng Semiconductor Materials Co got EIA approval of its 100 kt/a high-purity electronic chemical product production base, with a total investment of RMB98.2 million. The project will include the distillation and purification of 30 kt/a hydrofluoric acid, 25 kt/a nitric acid, 3 kt/a NMP, packing 10 kt of hydrochloric acid, 20 kt of sodium hydroxide and other EL grade electronic chemicals.
7. Lianshi Hubei
On March 31, 2021, Lianshi Hubei released the EIA result of its 530 kt/a high-purity electronic chemical products purification and packing project for public opinions. The project will include a 120 kt/a sulphuric acid, 30 kt/a hydrogen peroxide, 30 kt/a ammonia, 20 kt/a hydrochloric acid, 30 kt/a nitric acid, 30 kt/a hydrofluoric acid and 5.6 kt/a ammonium fluoride. The project will be built in two phases, with an investment of RMB500 million and RMB300 million, respectively and construction will cover high-purity reagent production, mixing, and sub-packaging production lines.
8. Jiangyin Jianghua Microelectronics Materials
Jiangyin Jianghua Microelectronics Materials’ phase II 35 kt/a capacity launched production at the end of 2020. Sichuan Meishan base’s 60 kt/a and Jiangsu Zhenjiang base’s phase I 58 kt/a new capacities will start up in 2021. The second phase of the Jiangyin base mainly includes G3-G4 grade stripping liquid, etching liquid, thinner, etc. The main products of the Sichuan Meishan base are G2-G3 grade copper etching liquid, aluminum etching liquid, stripping liquid and other functional wet chemicals, targeting flat panels display customers. Jiangsu Zhenjiang base has a total designed capacity of 228 kt/a and phase I products include sulphuric acid, ammonia and hydrochloric acid, targeting customers from the semiconductor industry. Its products are upgraded and enter into the G4-G5 high-end market.
9. Jaewon Yuneng New Material Technology
Jaewon Yuneng New Material Technology, the joint venture between SHIM Jaewon and BinzhouYuneng Chemical Co made smooth progression of its 169 kt/a wet electronic chemical project in 2020. The project is expected to be completed in June 2021 and products will include 30 kt/a γ-GBL, 3 kt/a semiconductor-grade γ-GBL, 30 kt/a NMP, 7 kt/a propanediol monomethyl ether, 6 kt/a PMA, 2 kt/a n-butyl acetate, 12 kt/a electronic-grade IPA and 6 kt/a BOE etchants.
