"The strength of the integrated circuit and flat panel display industries must rely on the strength of the materials industry. China's flat panel display industry has already risen, and although the integrated circuit manufacturing industry is still relatively weak, it will soon become strong with national support. While the downstream industries are advancing rapidly, the upstream electronic chemical new materials are also entering a period of great development," said Zhou Zixue, Chairman of SMIC, at the recent establishment conference of the China Electronic Chemical New Materials Industry Alliance.

  Strong Market Demand

  Electronic chemical new materials are crucial foundational materials that span the electronics and chemical industries, and are one of the key materials prioritized by countries worldwide for developing their electronics industries. With the rise of China's flat panel display and integrated circuit industries, there is an urgent market demand for high-end electronic chemical new materials.

  "The electronic chemicals used in integrated circuit manufacturing could grow by several hundred percent annually," said Zhao Haijun, Executive Vice President of SMIC, with great confidence. He calculated: "SMIC's current annual capacity is equivalent to 300,000 8-inch wafers, with 90% of the materials being imported. The procurement of domestic materials is only 450 million yuan. If most materials were domestically sourced now, the procurement amount would be 4.5 billion yuan, and SMIC alone could support many material companies. Moreover, whether according to the goals set by the 'National Integrated Circuit Industry Development Promotion Outline' or to meet the rapidly growing demand of the integrated circuit design industry, SMIC needs to continuously expand production, which is a significant push and a huge market space for the materials industry."

  Wu Gongyuan, Chief Procurement Officer of BOE Technology Group, introduced that the global semiconductor display market is steadily growing, with LTPS TFT-LCD and AMOLED showing annual compound growth rates of 13% and 10%, respectively. As important raw materials in the semiconductor display industry, electronic chemicals/special gases are widely used in the manufacturing process. With new panel factories in mainland China gradually starting production, related demand will rise sharply, with a large market capacity. The annual growth rate of chemical demand exceeds 20%, and the annual growth rate of special gas demand also exceeds 20%.

  Wu Zhou'an, Chief Engineer of Juhua Group, which is transitioning to the high-end electronic chemical field, is also optimistic about the market prospects. He said that the "2014-2016 New Industry Display Innovation Development Action Plan" encourages the FPD industry to become stronger, larger, and better, with continuously optimized product structures. If calculated by area, China's liquid crystal panel shipments will rank second in the world, with an overall industry scale exceeding 300 billion yuan. This will be a strong driving force for the growth of electronic chemical new materials.

  Industry is Starting Up

  As BOE's Chief Procurement Officer, Wu Gongyuan is well-versed in the development of the domestic chemical industry. He believes that domestic chemical manufacturers have grown rapidly in recent years, accounting for over 20% of the chemical procurement of domestic panel companies. As the domestic large-size panel industry is transitioning from aluminum to copper processes, copper-related chemicals will still be dominated by foreign suppliers in the short term. It is expected that the proportion of domestic materials will slightly decrease in 2015 and 2016, then gradually increase. He also said that domestic special gas manufacturers have made significant progress, accounting for over 40% of the special gas procurement of domestic panel companies in 2015. With the further release of domestic nitrogen trifluoride manufacturers' capacity and the entry of domestic manufacturers into silicon and chlorine gases, the overall domestic special gas market share will continue to rise.

  Yin Fuhua, Chairman of Jiangyin Jianghua Microelectronics Materials Co., Ltd., who has been in the electronic chemical materials industry for over 20 years, said that Jiangyin Jianghua Micro is a wet electronic chemical manufacturer. After years of effort, 80% of its products are used in microelectronics, semiconductors, and flat panel displays, with extensive use in 6th and 8.5th generation lines.

  Although the petrochemical industry is currently affected by the overall economic environment, the segmented new chemical materials industry has maintained good growth. As a large chemical enterprise, Juhua Group leverages its deep technical accumulation in the chemical industry to transform and upgrade towards the electronic chemical new materials industry. Although this industry currently accounts for a small portion of its total revenue, its high added value is very prominent.

  Hu Zhongming, Chairman of Juhua Group, told the "China Electronics News" that the company is increasing investment in the electronic chemical new materials field: in the near future and during the "13th Five-Year Plan" period, the company plans to invest 1.1 billion yuan in high-purity electronic gases, 300 million yuan in electronic wet chemicals, 300 million yuan in new energy materials, and 500 million yuan in other new materials.

  Yuan Tong, Deputy Secretary-General of the China Electronic Materials Industry Association, told the "China Electronics News": "In the past decade, the electronic chemical new materials market has developed rapidly, with a market size of about 140 billion yuan. However, due to high entry barriers, electronic gases, wet chemicals, photoresists, and high-purity functional chemicals are basically monopolized by foreign companies. Domestic high-end electronic chemical new materials account for only about 30% of the domestic market. Most domestic products are mid-to-low-end, and the industry level and development scale are significantly lagging behind the integrated circuit and flat panel display industries. In the future, we urgently need to change the high dependence on foreign products and increase the localization rate."

  Seeking Breakthroughs Together

  "Producing electronic information chemical products is extremely difficult. Enterprises must be patient, endure solitude, and rely on integration capabilities to push the industry forward. Integration is productivity, and the alliance is a platform for win-win cooperation in the industrial and ecological chains," said Zhou Zixue.

  The breakthrough in the localization of electronic chemical new materials requires joint efforts from government, industry, academia, research, and application—none can be missing!

  Xue Jianshe, Director of the Display Technology Research Institute of BOE Technology Group, said: "Now the global flat panel display industry's focus has shifted to mainland China. To reduce costs, a complete industrial chain is essential. Both liquid crystal panel and complete machine manufacturers urgently hope for breakthroughs in upstream materials and equipment to make our country's flat panel display industry highly competitive in cost. We hope the upstream can develop products that satisfy us and use the alliance platform to get things done."

  Zhang Wei, Technical Director of Shenzhen China Star Optoelectronics, believes that the liquid crystal industry is about to face another winter, and industrial chain support is indispensable. China Star Optoelectronics is very open to domestic material manufacturers and actively cooperates in new material development. He hopes material manufacturers focus on online analysis and include packaging materials in their research scope, in addition to electronic chemical gases, solids, and liquids.

  Xiang Chuanyi, General Manager of Tianma Microelectronics Group, said that the flat panel display industry is highly competitive with significant cost pressures, requiring the rapid introduction of low-cost material suppliers. Material localization is an inevitable trend. Therefore, the flat panel industry is willing, motivated, and has the conditions to cooperate with the new chemical materials industry to jointly develop valuable applications. When the OLED technology gap with foreign countries is not large, material manufacturers' support is highly desired.

  "A 1% cost saving may face quality accidents, bringing 100% loss risks." Electronic chemicals and special gas materials are high-risk and complex to test. Wu Gongyuan suggested that upstream material manufacturers focus on product development and quality control to provide qualified, stable, and reliable products for downstream customers; downstream panel manufacturers open their doors to provide online testing and improvement opportunities for material manufacturers, forming a cooperative development mechanism; and government guidance and support are also crucial, enhancing upstream enterprises' investment enthusiasm and reducing downstream enterprises' testing risks and costs.

  As the leader of China's integrated circuit industry, SMIC has been fully supporting material localization. Currently, among SMIC's top seven consumables (accounting for 98% of all materials), silicon slurry, photoresist, chemicals, polishing pads, gases, and targets have started domestic material procurement, with 14 domestic material projects in mass production and 12 passing verification. To further support material localization, SMIC has established a Domestic Material Review Committee responsible for the entire process of domestic material evaluation, verification, procurement, and introduction.

  Zhao Haijun believes that semiconductor material enterprises must not only specialize in their own fields but also become experts in user aspects and carefully build trustworthy brands. He also suggested that support for material localization should shift more from front-end R&D to production verification. He said that material production is very difficult, with long verification cycles and high costs, and material enterprises are generally small and weak. Establishing a verification co-development platform would benefit domestic material enterprises. He also hopes the alliance can become a large virtual group to accelerate the verification and application of domestic materials.

  Li Qifang, Professor at the School of Materials Science and Engineering, Beijing University of Chemical Technology, said that a platform for industry-academia-research exchange is very necessary. Universities and research institutes need to understand the research directions of enterprises, and industry-academia-research communication and cooperation are essential to advance the electronic chemical new materials industry.

  "With passion, there will always be endless things to do." This is the innovation of the semiconductor industry, and this is the choice for the localization of electronic chemical new materials!

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