According to the semiconductor Industry Association (SIA) report, global semiconductor sales in the second quarter of 2021 were US$133.6 billion, an increase of 29.2% over the same period last year and an 8.3% month-on-month increase. Driven by a series of new technologies and market demands such as 5G commercialization, data centers, Internet of Things, smart cities, and smart cars, the semiconductor industry has been given new momentum. It is expected that semiconductor demand will continue to rise sharply in the long run.
On the other hand, the epidemic broke the rhythm of supply, superimposed the outbreak of demand, and the world fell into a serious shortage of goods. At the end of 2020, all kinds of chips were out of stock, and the foundry continued to start the expansion cycle under full load.
According to the SEMI report, 29 new fabs are expected to be built around the world in the next two years, with an additional capacity of 2.6 million wafers/month (converted to 8-inch wafers) after completion. The active expansion of global fabs will drive the rapid growth of the semiconductor equipment market, and the semiconductor equipment will start an upward cycle.
Number of new foundries by region in 2021/2022 (units)
(Source: SEMI, Minsheng Securities Research Institute)
Semiconductor equipment refers to the equipment required for the production of various semiconductor products and belongs to the supporting link of the semiconductor industry chain. From the perspective of process classification, semiconductor equipment can be mainly divided into silicon wafer production process equipment, wafer manufacturing process equipment, packaging and testing equipment. process equipment, etc. These devices correspond to processes such as silicon wafer manufacturing, integrated circuit manufacturing, packaging, and testing, and are used in different processes of the integrated circuit production process.
According to SEMI data, global semiconductor equipment sales in 2020 will reach a record high of US$71.2 billion. China is the world’s largest semiconductor equipment market, and its market share in the world is increasing year by year.
Quarterly global semiconductor equipment sales (billion US dollars)
(Source: wind, Guosheng Securities Research Institute)
From 2016 to 2020, the size of China’s semiconductor equipment market has grown from US$6.46 billion to US$18.72 billion, and the global market share has risen from 15.7% to more than 25%. On the whole, the market size of semiconductor equipment continues to increase, and the industry has huge potential.
Domestic semiconductor equipment “breakthrough war”
According to statistics from the China Electronic Special Equipment Industry Association (CEPEA), the sales of domestic semiconductor equipment in 2020 will be about 21.3 billion yuan, and the self-sufficiency rate will be about 17.5%. If only integrated circuit equipment is considered, the domestic self-sufficiency rate is only about 5%, and it only accounts for 1-2% in the global market.
There is a big gap between the supply and demand of domestic semiconductor equipment
(Source: SEMI, Guosheng Securities Research Institute)
It can be seen that my country’s semiconductor equipment is still relatively dependent on imports, and the domestic self-sufficiency rate is low. Looking at the global semiconductor equipment market, the entire industry presents a situation of high monopoly and the strong are always strong. According to Gartner data, in 2020, the top three companies in the world will collectively account for more than 70% of the market share. The industry Matthew effect is very obvious and the market is highly concentrated.
Semiconductor equipment has high technical threshold requirements, and it is difficult for domestic companies to achieve technological breakthroughs. But at present, China’s semiconductor equipment industry is also in the process of rapid development. From a market perspective, domestic breakthroughs have been made in cleaning equipment, furnace tube equipment, dry degumming equipment, etching equipment, polishing equipment, and copper plating equipment. In the whole process of replacement, a group of enterprises have taken solid steps and achieved certain results.
Taking cleaning equipment as an example, cleaning equipment is one of the most important equipment in the new production line of the fab. It performs non-destructive cleaning on the surface of the wafer according to the needs of different processes, so as to remove particles, metal contamination, Organic matter and other impurities. It can be said that semiconductor cleaning equipment directly affects the yield of integrated circuits, and its importance is self-evident.
According to SEMI, the global semiconductor cleaning equipment market will reach US$3.587 billion in 2021. Judging from the current global cleaning equipment market, the market share is mainly monopolized by Japanese Dience Semiconductor (DNS), Tokyo Electron (TEL), Lam Research and other companies.
In the face of giants, and looking back at the domestic market, in terms of cleaning equipment, there are mainly Shengmei Semiconductor, NAURA and Xinyuan Microelectronics, but the three business focuses are different, and the products are quite different. The main products of Shengmei Semiconductor are single-chip/slot type and single-chip slot-type combined cleaning equipment in the field of integrated circuits. The product line is relatively rich. The main products of North Huachuang are single-chip/slot type cleaning equipment; the main applications of Xinyuan Micro’s current products Monolithic scrubbing equipment for integrated circuit manufacturing. At present, in the domestic domestic cleaning equipment market, Shengmei Semiconductor occupies about 80% of the market share. It is currently the cleaning equipment company with the largest domestic market share and the most complete products, and undertakes the heavy responsibility of localization of cleaning equipment.
Regarding the industry structure and development status of semiconductor equipment, Wang Hui, chairman of Shengmei Semiconductor, said, “From the perspective of the development history of the global semiconductor equipment industry, the main features are that first, the life cycle of leading equipment companies is particularly long, and second, leading equipment companies have The early layout and the mastery of crucial IP technology make latecomers inevitably encounter IP obstacles in the development process, which is also the biggest challenge for domestic equipment companies in the development process.”
It is understood that the main products of Shengmei Semiconductor include semiconductor cleaning equipment, semiconductor electroplating equipment, vertical furnace tube dry process equipment and advanced packaging wet process equipment. Shengmei Semiconductor adheres to the development strategy of differentiated competition and innovation. Through years of technology research and development and process accumulation, it has successfully developed SAPS/TEBO single-chip megasonic cleaning technology and Tahoe single-chip groove combination cleaning technology, which can be applied to 28nm and below. In the field of wafer cleaning technology nodes, it can effectively solve the cleaning problems of organic contamination and particles after etching, and greatly reduce the use of chemical reagents such as concentrated sulfuric acid, which can help customers reduce production costs and meet the requirements of energy saving and emission reduction. .
In addition, Shengmei Semiconductor is also actively deploying in electroplating technology, stress-free polishing technology and vertical furnace tube technology, providing customized equipment and process solutions to global wafer manufacturing, advanced packaging and other customers, effectively improving customers’ Production efficiency, improve product yield and reduce production costs.
Domestic companies represented by Shengmei Semiconductor have achieved breakthroughs from 0 to 1 in semiconductor cleaning equipment. Looking back at the development history of Shengmei, it can be traced back to 1998. At that time, Dr. Wang Hui established ACM Research in Silicon Valley of the United States, mainly engaged in the research and development of semiconductor-specific equipment, and invented the multi-anode local copper electroplating and stress-free copper polishing technology and process. Among them, stress-free polishing equipment is sold to Intel and LSI Iogic. However, because the technology is too advanced and far ahead of the market demand at that time, it has not been industrialized.
Although he has experienced the embarrassing situation of “advanced technology is useless”, today, regarding the relationship between technology and the market, Dr. Wang Hui still believes that small companies should focus on advanced advanced technologies, and large companies do not have the energy to consider or look at it. Seize the opportunity in the above subdivisions, first get the ticket to enter the market through differentiated technology, and then further expand the company by focusing on emerging markets and markets that are in the development momentum.
In 2005, as the global semiconductor production line shifted to the domestic market, the demand for semiconductor equipment began to increase. At the same time, Shanghai vigorously developed the semiconductor equipment industry. As a key enterprise, ACMR became a new development opportunity. In 2005, ACMR invested and established a joint venture company, Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. in Shanghai, and invested the semiconductor-specific equipment related technologies formed in its early research and development into the joint venture company, using the world’s most advanced copper interconnect process technology. and equipment to fill the gap in Shanghai’s semiconductor equipment industry.
Shengmei Semiconductor Equipment (Shanghai) Co., Ltd.
(Source: company official website)
After years of hard work, Shengmei Semiconductor finally ushered in a technological breakthrough in 2008, and the megasonic cleaning technology SAPS was successfully developed. In 2009, Shengmei Semiconductor’s first 12-inch single-chip cleaning equipment entered the SK Hynix (Wuxi) factory, and the following year successfully entered the South Korean SK Hynix to carry out product verification. Used by leading semiconductor chip manufacturers. In 2011, Shengmei Semiconductor officially received an order from SK Hynix, and in 2013, it received multiple repeated orders. It took Shengmei Semiconductor 24 months from entering the factory for verification to the official order.
Shengmei Semiconductor’s SAPS cleaning equipment for SK Hynix’s 12-inch 45nm process
Dr. Hui Wang recalled that this process was not easy. Because the trial and error cost of semiconductor equipment is high, fabs are more willing to use equipment from large companies with mature technology. For a semiconductor equipment startup company, even if the product performance, cost and various parameters are the same as similar products of international large companies, in There is also no opportunity in the market to compete with large international companies. Even if there is an opportunity to compete with large international companies, it does not mean that they can win the competition. Unless it can generate direct economic benefits for customers, large companies have little incentive to switch suppliers.
The reason why SK Hynix purchased Shengmei Semiconductor’s equipment is that its cleaning equipment has been proven to achieve a 1.5% yield improvement in two processes, which means that a production line with a monthly production of 100,000 products can increase by about 1.5% per year. The profit of 70 million US dollars and the visible economic benefits helped Shengmei Semiconductor’s cleaning equipment officially enter the large production line of SK Hynix.
The recognition of major manufacturers has accelerated Shengmei Semiconductor’s innovation in semiconductor cleaning technology, and has since developed TEBO technology and Tahoe technology. In 2015, the megasonic cleaning technology TEBO came out. As the world’s first technology that can realize megasonic non-destructive cleaning on 3D microstructures, it is expected to solve the problem of 14nm and below FinFET microstructure cleaning; in 2018, Shengmei Semiconductor has another success , released the Tahoe single-chip combined cleaning technology, which can be applied to the wafer cleaning field of 45nm and below technology nodes, which can effectively solve the cleaning problems of organic contamination and particles after etching, and can reduce the use of concentrated sulfuric acid compared with single-chip cleaning equipment. It can help customers reduce production costs while meeting the requirements of energy saving and emission reduction.
In the same year, Shengmei Semiconductor began to expand to dry process equipment on the basis of wet process. In 2020, it launched vertical furnace tube equipment, which further enriched the company’s product line and expanded the market coverage of products. At the same time, with the continuous development and iteration of products and technologies, Shengmei Semiconductor has gradually introduced new technological achievements to the market. At present, it has entered the fields of LPCVD (low pressure chemical vapor deposition) equipment, oxidation furnaces and diffusion furnaces, and will enter ALD next year. (atomic layer deposition) equipment field.
Differentiation strategy and diversified product layout
It can be seen that from a single cleaning equipment, to advanced packaging wet equipment, to copper plating equipment and stress-free polishing equipment, and then into the field of dry equipment, Shengmei Semiconductor is constantly increasing its product matrix. The direction of the international company of products is moving forward. With its advanced technology and rich product lines, Shengmei Semiconductor has developed into one of the few semiconductor-specific equipment suppliers in mainland China with certain international competitiveness. Its cooperative customers include international major manufacturers SK Hynix, domestic SMIC, Hua Hong Group, Changjiang Storage, Changdian Technology, Tongfu Microelectronics, Hefei Changxin, Silan Micro, Xinen, Yuexin, Jinghe, Zhuosheng Micro, Jita Semiconductor, Geke Micro, Leon Micro, Shanghai Hejing, Shenghe Jingwei and others are all customers of Shengmei Semiconductor, and its products have been recognized by many mainstream semiconductor manufacturers at home and abroad, and have achieved a good market reputation.
In 2020, the global market share of Shengmei semiconductor cleaning equipment will be about 5%, and it will reach 20%-30% in the domestic market. Among them, Shengmei semiconductor equipment can account for more than 50% of the latest purchase order of Yangtze River Storage. In the future, Shengmei Semiconductor plans to have a market share of more than 50% in cleaning equipment for domestic customers. At the same time, with the gradual and steady breakthrough of foreign customers, the market share in the global market is expected to reach 20%-30% in the future.
Dr. Wang Hui emphasized that in order to compete with international first-line brands, players who enter the game later must do differentiation under the premise of respecting IP, and provide problems that others have not yet solved, such as improving yield and improving economic benefits, etc. Semiconductor equipment companies can only enter the international market by taking the road of differentiation and systematic innovation. For example, Shengmei Semiconductor uses TEBO megasonic cleaning technology to solve the worldwide problem of megasonic damage to patterned silicon wafers, and Tahoe high-temperature sulfuric acid cleaning equipment greatly reduces the amount of sulfuric acid.
It is through this differentiated innovative idea that Shengmei Semiconductor has created the world’s leading technology. From the perspective of Shengmei Semiconductor, the next five to ten years will be a golden period for the development of Chinese equipment companies. Shengmei Semiconductor must down-to-earth to make products well and stronger, and increase the range of processes that can be covered by cleaning equipment from the current 80% increased to more than 90%. In addition, Shengmei Semiconductor will continue to further develop in the market of copper plating, polishing equipment, vertical furnaces and more products with differentiated technologies, speed up the research and development of new equipment and product internationalization, and strengthen the differentiated innovation advantages of all categories. And the cooperative relationship with customers, to grasp the golden period of China’s semiconductor equipment industry development.
Shengmei Semiconductor is also continuing to develop two new devices, which are expected to be introduced to the market next year. The two new devices can cover a market of more than 9 billion US dollars.
Seeking new levels and new exits
Original innovation and differentiated innovation are the stepping stones for Chinese equipment manufacturers to catch up and surpass in Dr. Wang Hui’s eyes. “Technology does not favor large companies or small companies, but favors innovative teams. Therefore, we cannot always follow the mainstream manufacturers, and we must do some differentiated, new technology exploration and original innovation, and advance under the premise of spare capacity and time. Layout and seize market opportunities.”
From being a soldier in the industry to emerging today, behind the achievements of Shengmei Semiconductor, it focuses on innovation, research and development, and application. Based on differentiated innovation, it takes a differentiated product route and strives to be the “only” in the industry, not a follower. Shengmei Semiconductor’s growth path, research and development ideas, and its judgment and grasp of market trends may bring some guiding significance to local equipment manufacturers, and help Chinese semiconductor equipment enterprises enter the global industrial chain and be benign with other international mainstream manufacturers. Compete, share the global market, and provide a trackable development path.
In 2017, Shengmei was listed on the NASDAQ (NASDAQ) exchange, becoming the first domestic semiconductor equipment company listed in the United States. In the globalized industry of semiconductor equipment, listing in the United States highlights Shengmei’s globalization strategy and far-reaching layout.
At present, Shengmei Semiconductor has launched another entry into the Science and Technology Innovation Board. According to the official website of the Shanghai Stock Exchange, on September 30, 2020, Shengmei Semiconductor was approved by the meeting of the Listing Committee of the Shanghai Stock Exchange Science and Technology Innovation Board, and on August 17, 2021, the company was officially registered.
Dr. Wang Hui said that the listing on the Science and Technology Innovation Board will make Shengmei Semiconductor more deeply rooted in the Chinese market and grow together with the Chinese semiconductor industry. In the future, Shengmei will also adhere to original innovation, take a differentiated path, maintain a bilateral listing structure on Nasdaq and the Science and Technology Innovation Board, serve domestic and foreign customers well, and actively expand to the global market, while serving the company’s global customers and bilateral Investors create more value.
write at the end
At present, the mainland semiconductor equipment industry has initially entered the local substitution stage after experiencing the stage of relying on foreign technology and independent research and development. From the perspective of market space, the mainland is already the largest market for semiconductor equipment in the world, and the large-scale expansion of local Foundry and IDM will promote the continuous growth of the market.
With the global shortage of cores since last year, the demand for semiconductor equipment has surged again due to the expansion of global fabs. Domestic semiconductor equipment has also been driven by orders from major manufacturers such as Yangtze Memory, SMIC, and Hua Hong Semiconductor, and has gradually transformed into a multi-faceted demand resonance of various domestic IDM manufacturers and specialty process fabs. The domestic semiconductor equipment industry ushered in opportunity for development.
Large market + low self-sufficiency rate, superimposed on the general trend of domestic substitution, local equipment manufacturers have gradually begun to receive orders, and can take this opportunity to develop differentiated technologies. At the same time, combined with the advantages of domestic semiconductor equipment companies being close to customers and responding quickly, we provide customers with better services. Under this trend and opportunity, the local semiconductor equipment market may usher in a golden growth period.
Shengmei Semiconductor is in the midst of this round of industrial transformation, and has pressed the accelerator button in the new shock and opportunity. The goal is to become the top ten semiconductor equipment companies in the world in the future, and contribute to the development of the global semiconductor equipment industry.