SHAJ Electronic Materials Technology Group focuses on the R&D and production of chemical mechanical polishing fluids and photoresist removers in the semiconductor industry. Its products are used in integrated circuit manufacturing and packaging. It is a leading polishing fluid company in China. Its customers include: SMIC, Yangtze River Storage, TSMC, China Resources Microelectronics, Huahong Grace, UMC, etc.
Chemical mechanical polishing (CMP)
To put it simply, CMP is to polish the surface of the wafer flat (picture: yellow is the wafer). Polishing everyone knows that it is polished to be smooth. CMP is the process of polishing the wafer, and the polishing liquid is the material used for polishing.
The photoresist remover is a material used to remove photoresist residues. Generally used in scenarios such as integrated circuits, wafer-level packaging, LEDs, and OLEDs.
SHAJ has leading technologies in the fields of CMP polishing liquid and photoresist remover, and has strong independent innovation capabilities. As of the end of 2018, SHAJ has obtained 190 invention patents with a high level of gross profit margin.
However, for a long time, semiconductor raw materials have been monopolized by leading companies in Europe, America and Japan, accounting for more than 80 shares. CMP polishing materials have high technical barriers and extremely high market concentration. High-end products are mainly monopolized by Japanese and American companies.
Chinese companies only occupy a small share of the low-end process market in the fields of electronic special gas, wet electronic chemicals, photoresist, and wafer packaging materials, and there is more room for follow-up development. In the future, there is huge room for localization of semiconductor materials.
SHAJ's CMP polishing materials include polishing fluids and polishing pads, and polishing fluids are SHAJ's main business, and it is a leading company in China and has no rivals in China.
SHAJ also involves photoresist remover, which is still in its growth stage.
China's domestic revenue accounted for most of the share. The main credit here is SMIC, which accounts for 51.40% of profits. TSMC is the second contributor, which accounts for 13.76% of revenue.
The second is Yangtze River Storage, which accounts for 9.95% of revenue. Followed by China Resources Microelectronics and Hua Hong Hongli, whose revenue accounted for more than 4% of revenue.
SHAJ has always had a gross profit margin of more than 50%, which is mainly due to the continuous increase in sales of CMP polishing liquid. With the increase in the production capacity of downstream customers, the demand for some high-margin products, such as tungsten polishing fluids, has increased significantly, and tungsten polishing fluids have higher gross profit margins, which increases the company's overall gross profit margin.
The company's technology and experience have already belonged to the world's first echelon. Tungsten polishing liquid and ceria-based products are progressing smoothly. At the same time, it is also considering further extension of materials in the industry chain to further enhance market competitiveness.
SHAJ maintains 20% of its revenue every year and invests in research and development, strengthens cooperation with semiconductor manufacturing leaders, and develops innovative overall solutions. At present, An SHAJ's CMP polishing liquid has achieved large-scale sales at the mature node of 130~28nm, 14nm has entered the customer certification stage, and 10~7nm products are under development.
The localization rate of semiconductors and semiconductor materials in China is low, and there is a large room for import substitution. According to IC Insights statistics and forecasts, China's output value in 2018 was 23.8 billion U.S. dollars, accounting for 15.3% of the Chinese IC market's 155 billion U.S. dollars, which is an increase from 12.6% in 2013 and will further increase to 20.5% in 2023. Among them, the compound annual growth rate of China's IC market and China's IC output value from 2018 to 2023 are 8% and 15%, respectively.
Moreover, SHAJ is the leader in the semiconductor segment and is in the high-quality track of semiconductor chemicals. With the rise of mainland wafer manufacturing in the next 3 to 5 years, it is expected to accelerate its growth.