As China exerts its power, the craziness of semiconductor equipment will continue

Release time:

2023-12-01 15:24

Editor's note: This year marks the 66th year since China made semiconductors an important national development field in 1956. Looking back on 66 years of development, from scratch, from small to large, the semiconductor industry has experienced ups and downs while bursting with infinite vitality. As China's "14th Five-Year Plan" puts forward the digital economy development plan and targets strategic fields such as integrated circuits, the semiconductor industry has launched a series of special topics on "Localization Process" to describe the development process of various fields of China's semiconductors today and analyze the new trend of localization. This issue is the second article of the semiconductor industry chain special topic "Localization Process": Semiconductor Equipment.

——Semiconductor Industry Editorial Department

 

The global supply of chips exceeds demand, making the production capacity of wafer fabs a hot commodity, and corresponding business opportunities are also being transmitted to the upstream of the industrial chain, especially semiconductor equipment, with revenue reaching new highs. According to SEMI statistics, total global front-end wafer fab equipment spending will increase by 18% in 2022 from the previous year, reaching a record high of US$107 billion. This has been a significant increase for three consecutive years. SEMI pointed out that wafer foundries will be the largest equipment spenders in 2022 and 2023, accounting for about 50% of total global spending, followed by storage, accounting for about 35%.

 

A rising tide lifts all boats, and the production capacity of semiconductor equipment manufacturers has also increased. SEMI data shows that the global equipment industry's production capacity has increased year after year. After increasing by 7% in 2021, it will increase by 8% this year, and it is estimated that there will also be a 6% increase in 2023.

 

As the world's main consumer market for semiconductor equipment, mainland China's sales in 2020 were US$18.72 billion, a year-on-year increase of 39.2%, accounting for 26.3% of the global market, becoming the world's largest semiconductor equipment consumer market. According to this development momentum, it is expected that mainland China's global share of semiconductor equipment sales is expected to increase from 28% in 2021 to 32% in 2023. Based on this calculation, mainland China's semiconductor equipment sales in 2021 will be approximately US$28.78 billion, a year-on-year increase of 53.7%, and are expected to reach US$34.3 billion in 2022, a year-on-year increase of 19.2%.

 

Global pattern
 

Semiconductor equipment can be divided into wafer manufacturing (front-end equipment) and packaging and testing equipment (back-end equipment). Front-end equipment mainly includes photolithography machines, etching machines, thin film deposition, heat treatment equipment, ion implanters, CMP (chemical mechanical polishing) equipment, cleaning machines, front-end inspection equipment, etc. Among them, thin film deposition, photolithography and etching are the three core processes of front-end wafer manufacturing.

 

In the global semiconductor equipment industry structure, front-end equipment accounts for about 85% of total sales, back-end test equipment accounts for about 9%, and packaging equipment accounts for about 6%. These three figures will be fine-tuned every year. , but there is not much change, and the fundamentals are stable. At present, the global front-end equipment market is mainly dominated by American, Japanese and European companies. Several major head equipment manufacturers, such as the American AMAT (Applied Materials) account for about 17%, the Dutch ASML about 16.6%, and the Japanese TEL (Tokyo Electronics) about It is 12.5%, the US Lam Research is about 11.2%, and the US KLA is about 6.3%, accounting for a total of nearly 64%.

 

In each segment, there is still an oligopoly situation.

 

Lithography machines, especially EUV, are mainly monopolized by ASML, accounting for 83% of the market; the etching market is mainly controlled by Lam, TEL and AMAT, with shares of 45%, 28% and 18% respectively; the ion implantation market is mainly dominated by AMAT, Axcelis and SMIT are controlled by three companies; in terms of thin film deposition, the PVD (physical vacuum coating) market is mainly monopolized by AMAT, with a market share of 85%, and the CVD (chemical vacuum coating) market is mainly controlled by AMAT, Lam and TEL, with a share of They are 30%, 26% and 17% respectively; the heat treatment market is controlled by AMAT, TEL and Kokusai; the glue development/degumming market is mainly monopolized by TEL, with a share of 91%; the cleaning equipment market is dominated by SCREEN, TEL and Lam. monopoly.

 

The global testing machine market is monopolized by Advantest, Teradyne and Lam, with market shares of 50%, 40% and 8% respectively; the global packaging equipment market is mainly dominated by ASM Pacific, K&S, Shinkawa and Besi.

 

China’s semiconductor equipment supply side needs to be improved urgently
 

Mainland China is one of the three largest semiconductor equipment consumer markets in the world. However, the market share of local equipment manufacturers is very low. Taking 2020 as an example, the total equipment procurement of domestic wafer fabs (including wafer fabs of major international manufacturers such as Samsung, TSMC, and SK Hynix in mainland China) is approximately US$15.4 billion, of which the procurement of domestic equipment is only 990 million US dollars. The U.S. dollar accounts for only 7%. The localization rate is low and the monopoly by foreign giants is very obvious.

 

Before 2008, my country's semiconductor equipment basically relied on imports. Therefore, the country established a major national science and technology project - the Very Large Scale Integrated Circuit Manufacturing Equipment and Complete Process Technology Project (referred to as the 02 Special Project) to develop localized equipment. However, due to the relatively high technical and financial requirements for equipment manufacturing, only a few key companies such as Northern Huachuang, China Microelectronics, and Shanghai Microelectronics can undertake the 02 special research and development work, and the concentration of the entire industry is relatively high. Although my country's semiconductor equipment has been developed from scratch with the support of Special Project 02, the self-sufficiency rate is seriously insufficient compared with the huge domestic market size.

 

Even in the field of IC packaging and testing with a relatively high level of development, there is still a large gap between my country and advanced international levels. The single crystal furnace, oxidation furnace, CVD equipment, magnetron sputtering coating equipment, CMP equipment, photolithography machine, coating/development equipment, ICP plasma etching system, probe station and other equipment markets are almost occupied by foreign companies. .

 

At present, domestic semiconductor equipment is in a state of partial breakthrough, but overall it is relatively backward. Especially compared with international giants, the strength of local equipment companies is still weak. Most companies cannot reach the international 7nm process level that has achieved mass production. Some companies have broken through to 28nm or 14nm processes, but they are not as stable as in use. There is a large gap between international giants. It is difficult to enter mass production lines in large quantities, and it is also difficult to enter the production lines of international OEM giants.

 

The technical barriers to the semiconductor equipment industry are very high. As the manufacturing process becomes more and more advanced, higher and higher requirements are placed on the performance and stability of semiconductor equipment, requiring a large amount of investment in research and development. Applied Materials has always maintained high investment in R&D. 30% of its employees are professional R&D personnel. It holds nearly 12,000 patents and applies for more than 4 new patents every day on average. It is this continuous high R&D investment that promotes internal innovation of Applied Materials and constitutes high technical barriers.

 

Due to the long research and development cycle and large investment in semiconductor equipment. Although domestic equipment companies have made breakthroughs in process research and development, there is still a certain distance between them and stable mass production. A very critical point is to have the opportunity for trial and error. The trial and error cycle usually lasts for one year or even several years. , and because the market has long been occupied by major international manufacturers, it is difficult for domestic equipment manufacturers to obtain application opportunities and development space.

 

Equipment parts have shortcomings
 

Manufacturing semiconductor equipment requires a variety of components, and the market size of semiconductor equipment components and related raw materials is also considerable, expected to exceed US$30 billion in 2022.

 

According to VLSI statistics, semiconductor equipment includes 8 types of core subsystems: gas-liquid flow control system, vacuum system, process diagnostic system, optical system, power supply and gas reaction system, thermal management system, wafer transfer system, other integrated systems and key components , each subsystem contains a large number of components.

 

At present, the semiconductor equipment parts market is dominated by American, Japanese and European companies, with the United States accounting for 44%, Japan accounting for 33%, and Europe accounting for 21%. Major manufacturers include MKS, ICHOR, UCT, AE, Ferrotec, etc.

 

China's semiconductor equipment parts require a large amount of imports. Currently, only mechanical parts such as cavities and racks are domestically produced, while electrical parts, gas delivery systems, vacuum systems, sensors, instruments, pneumatic systems and other parts are mainly imported. In the semiconductor wafer manufacturing process, parts such as valves, sealing rings, electrostatic chucks, and ceramic vacuum pressure gauges have a large share of imports. Among them, the cost of valves accounts for about 10.6% of the cost of consumables. There is a large market demand, but the domestic supply side is still blank in this field.

 

Among the semiconductor equipment parts suppliers in mainland China, the top seven are: Wanye Enterprise, Fuchuang Precision, Xinlai Materials, Zhongkeyi, Jiangfeng Electronics, Huazhuo Jingke, and Shengong Co., Ltd. Wanye Enterprise's revenue in 2021 is about 920 million yuan, and the second-largest Fuchuang Precision is about 840 million yuan.

 

So, where do these companies stand among similar global manufacturers? Take Fuchuang Precision as an example. The company is one of the few manufacturers in the world that can provide precision components in batches for 7nm process equipment. The company's revenue in 2021 will exceed US$100 million, but compared with the global ranking of MKS's 2.95 billion US dollars, the gap is huge, even compared with Ferrotec (approximately US$1 billion), which ranks fifth in the world, the gap is not small.

 

Opportunities and hopes for the development of domestic equipment
 

Although the technology and market share of mainland China's semiconductor equipment manufacturers are still unable to compete with major international manufacturers, the huge domestic market demand, strong support from national policies and funds, and the strengthening of domestic substitution awareness and willingness in recent years, It has provided strong impetus and optimistic market expectations for the development of the local semiconductor equipment industry, and has achieved outstanding results in multiple equipment fields.

 

First look at the etching equipment. The etching process is located after thin film deposition and photolithography. The purpose is to use chemical, physical, and optical reactions to remove unnecessary substances attached to the wafer surface. It is repeated many times to finally obtain an integrated circuit with a complex structure. Domestic etching equipment companies are mainly China Micro Semiconductor, Northern Huachuang, Yitang Semiconductor and China Electronics Technology. Among them, China Micro Semiconductor has obvious advantages in the field of CCP etching. In terms of logic chip manufacturing, the company's CCP etching equipment has entered the advanced process production lines of internationally renowned wafer foundries and is used for the production of 7nm/5nm chips; In terms of 3D NAND chip manufacturing, the company's CCP etching equipment can be applied to the mass production of 64-layer stacked chips, and it is developing 96-layer and more advanced etching equipment.

 

In terms of lithography machines, there is a big gap with the international high level. Although Shanghai Microelectronics can produce complete lithography machines, and Huazhuo Precision and Guoke Precision can produce lithography machine parts, they still do not have EUV, and The production capacity of advanced DUV equipment and the high process technology it can support are still 90nm.

 

Thin film deposition is a series of processes involving the adsorption of atoms, the diffusion of adatoms on the surface, and the coalescence of adatoms at appropriate locations to gradually form and grow a thin film. It is divided into atomic layer deposition (ALD), physical vacuum deposition (PVD), Chemical vacuum coating (CVD), etc. The representative manufacturers of thin film deposition equipment in my country are Northern Huachuang and Tuojing Technology. Among them, Northern Huachuang has achieved breakthroughs in PVD, CVD, and ALD equipment in the field of 28nm/14nm technology.

 

In terms of heat treatment, it mainly includes oxidation, diffusion and annealing processes. Domestic oxidation diffusion equipment manufacturers mainly include Northern Huachuang and Yitang Semiconductor. In recent years, Northern Huachuang's market share has increased year by year. For example, as of October 2020, Northern Huachuang's heat treatment equipment accounted for more than 30% of Yangtze River Storage.

 

CMP is a global surface planarization technology. The system mainly consists of three parts: polishing equipment, polishing fluid and polishing pad. Domestic CMP equipment manufacturers mainly include Huahai Qingke and Beijing Shuoke Precision Microelectronics. Huahai Qingke is the only domestic manufacturer that has achieved mass production of 12-inch CMP equipment.

 

In terms of glue removal equipment, Yitang Semiconductor dominates the country. In addition, Xinyuan Micro and China Electronics Technology Institute 45 can also produce glue removal machines. At present, the domestic production rate of my country's glue removal equipment has exceeded 90%, and domestic substitution has basically been achieved.

 

The cleaning step runs throughout the entire semiconductor production process and is used to remove impurities that may exist in steps such as silicon wafer preparation, wafer manufacturing, and packaging testing to prevent impurities from affecting chip yield and performance. Major domestic cleaning equipment manufacturers include Shengmei, Northern Huachuang, Xinyuan Micro and Pure Technology.

 

In terms of back-end equipment, domestic testing machine manufacturers mainly include Huafeng Measurement and Control and Changchuan Technology. Huafeng Measurement and Control accounts for nearly 60% of the domestic analog testing machine market. In terms of packaging equipment, domestic companies with manufacturing capabilities mainly include China Electronics Technology Institute 45, Ecoris and Dalian Jiafeng.

 

Increase investment in research and development
 

In 2021, the total sales of major domestic semiconductor equipment manufacturers will be approximately 24 billion yuan, a year-on-year increase of 56%. The net profits of Northern Huachuang, China Microelectronics Semiconductor, Ame Shanghai, Huafon Measurement and Control, Changchuan Technology, and Xinyuan Micro will increase. The growth rate was significantly higher than the revenue growth rate. Northern Huachuang, China Microelectronics Semiconductor, Shengmei Shanghai, etc. have further increased their sales based on their original mature equipment. Keshitong, a subsidiary of Wanye Enterprise, has achieved a 0-1 breakthrough in ion implanters. Xinyuan Micro's various glue coating and development equipment have made progress on the client side. smoothly.

 

At present, domestic semiconductor equipment manufacturers are in a period of rapid development. The high-tech barrier attributes of semiconductor equipment require manufacturers to continue to invest a large amount of money in research and development. For example, Northern Huachuang invested 2.89 billion yuan in R&D in 2021, which is far ahead in the country. Tuojing Technology's R&D investment accounts for 38%, Northern Huachuang's R&D investment accounts for 30%, and China Micro Semiconductor and Changchuan Technology account for 23%. They are all in the stage of high-intensity R&D investment.

 

In the technology- and capital-intensive asset-heavy field of semiconductor equipment, high investment can produce high output. After the engine accelerates, I believe that domestic equipment can reach a new level in a relatively short period of time.