Excerpt from Sina Technology, January 7, 2021, article | Kakuya Nishikawa Song Xujun Ye Nan
Two major trends facing materials companies
The semiconductor industry is the core industry in this strategy. According to the plan of “Made in China 2025”, in 2020, the core basic components and key basic materials of semiconductors should achieve 40% independent guarantee, and it will reach 70% in 2025. However, as of 2019, the actual localization ratio is only 15.7%, and it is predicted that it will reach 20% in 2024.
Semiconductor materials can be roughly divided into front-end wafer manufacturing materials and back-end packaging materials. Among them, the wafer materials mainly include silicon wafers, photomasks, photoresists, and polishing solutions. Packaging materials mainly include laminated substrates, lead frames, bonding wires, and thermal interface materials.
Wafer is a key material for manufacturing semiconductors. With the continuous improvement of semiconductor production technology, the overall wafer size has developed to large sizes. The wafer size has grown from 2 inches and 4 inches in the early days to the current 6 inches, 8 inches and 12 inches.
8 inches and 12 inches are the main sizes of wafers currently. Before 2020, 8-inch wafer fabs are the mainstay in China. With the continuous investment of large funds and supporting funds from local governments, a number of 12-inch wafer fab projects have landed in mainland China.
SEMI data shows that between 2017 and 2020, there are 62 semiconductor fabs in production worldwide, of which 26 are located in mainland China, accounting for 42% of the global total.
The good news is that the surge of Chinese fabs will prompt global wafer production to shift to China. According to IC Insight statistics, in 2018, China’s wafer production capacity was 2.43 million wafers per month (equivalent to 8-inch wafers), accounting for global wafer production. Circular production capacity is 12.5%. It is estimated that by 2022, the production capacity of fabs in mainland China will reach 4.1 million wafers/month, accounting for 17.15% of global production capacity.
However, the localization ratio of wafers is only about 5%-10%, especially the 12-inch wafers for cutting-edge fields, which have just begun to form commercial supply.
Kearney believes that it is not only necessary for China to establish its own large-scale wafer fabs to ensure the corresponding output, quality and cost levels, but also to accelerate the integration of 8-inch and 12-inch wafer fabs in China to build competitive large-scale wafer fabs. Round manufacturers.
In 2016, Taiwan’s Global Wafers, ranked sixth in the wafer industry, acquired SunEdison Semiconductor (SEMI), the world’s fourth largest semiconductor wafer supplier, and became the third in the industry.
At that time, 50% of the wafer industry’s market share was occupied by two Japanese companies, Shin-Etsu Chemical and SUMCO. Through the merger, Taiwan Global Wafer broke the oligopoly situation.
Packaging materials, including electronic special gas, CMP polishing materials, photoresist, etc., seem to have suppliers in China, but they have not yet pose a threat to global giants. One of the reasons may be that materials are more difficult to reverse engineer than equipment and equipment. It’s difficult for latecomers to come first.
Packaging materials, including electronic special gas, CMP polishing materials, photoresist, etc., seem to have suppliers in China, but they have not yet pose a threat to global giants. One of the reasons may be that materials are more difficult to reverse engineer than equipment and equipment. It’s difficult for latecomers to come first.
The first major trend is that people will pay more and more attention to the fit between materials and key processes (lithography, etching, coating deposition), and material design will be more valuable if the effects of the front and back processes are taken into account. This means that through the acquisition and integration of domestic and foreign related companies, it will become very important to obtain a rich product line. In particular, the two processes of etching and deposition are carried out at the same time. If these two materials can be provided at the same time, corresponding suggestions will be very helpful to enhance the competitiveness of the material company.
The American material manufacturer Entegris’ intention to integrate Versum is a typical case. Entegris is good at producing gases for coating deposition. In order to complement its business, it planned to acquire Versum, which has advantages in etching gases, and reached a preliminary integration agreement with it. However, Merck later offered better conditions and “snatched away” it. Versum, if Entegris and Versum can be integrated, it will create a material company with strong cross-process capabilities.
The second major trend is that materials companies are getting rid of the mainstream work method of “developing materials according to the specifications proposed by customers”, and actively participate in the process of production process development and specification determination, and cooperate with equipment vendors as needed. For example, material manufacturer Versum and Lam Research (the world’s third largest semiconductor equipment company) have cooperated to solve a major technical problem in the development of 3D flash memory.
China’s material manufacturers also need to cooperate more with equipment manufacturers such as North Huachuang. Since materials researchers often lack a basic understanding of equipment, it is best to establish a corresponding system and knowledge base within the company to master the most basic knowledge so as to cooperate with the outside world. (Originally published in Caijing magazine on January 4, 2021; authors Kakuya Nishikawa and Song Xujun are Kearney global partners, Ye Nan is Kearney partner, editor: Zhou Yuan)
