Since 2020, under the influence of the Coronavirus (COVID-19) outbreak and Sino-US trade frictions, China’s display panel, semiconductor and other industries have begun to reconsider their procurement and supply channels from a strategic perspective, such as electronic special gas, target materials, and wet electronic chemistry. Upstream materials such as products and silicon wafers have accelerated the process of domestic substitution.
In the field of high-purity sputtering target materials, China currently has 4 top sputtering target manufacturers, including NBJF Electronic Material Technology Group, BJYY Advanced Material Technology Group, HNLH New Material Technology Group, and FJAS Electronic Material Technology Group.
Among them, NBJF and GJAS both focus on high-purity sputtering targets, while BJYY and HNLH are involved in the high-purity sputtering target business through subsidiaries. Among them, the development direction of BJYY technology mainly focuses on the development of semiconductor targets; HNLH and FJAS mainly focus on the flat panel display field; NBJF focuses on semiconductor targets and is increasing its efforts to develop in flat panel displays and other fields.
Under the Coronavirus (COVID-19) epidemic, rapid growth in performance has become the main theme of Chinese target manufacturers
NBJF, as China's strongest manufacturer of high-end and high-purity sputtering targets, achieved operating income of 533 million yuan in the first half of the year, a year-on-year increase of 53.56%; net profit attributable to shareholders of listed companies was 40.83 million yuan, a year-on-year increase of 196.11%.
NBJF stated that the company’s main products, tantalum target, aluminum target, and titanium target sales continued to grow, increasing by 57.22%, 26.82% and 49.64% respectively over the same period of last year. The company’s other products such as copper targets, tungsten-titanium targets, CMP products, Sales of machine parts and components have also increased, with a total increase of 1.12 times over the same period of the previous year; while the company's target products used in the semiconductor field continue to maintain steady growth, orders for targets in the flat panel display field have increased significantly.
Another semiconductor target manufacturer, BJYY's high-purity sputtering target business is mainly carried out through its subsidiary company YYYJ. YYYJ focuses on the semiconductor field and has achieved integrated operations from ultra-high purity metals to targets.
In the first half of 2020, YYYJ achieved a net profit of 60,931,900 yuan, compared with 23,339,500 yuan in the same period last year, a year-on-year increase of about 158%.
BJYY stated that the company's high-purity metal target industrialization construction project has been completed, the output has been greatly increased, and the main business income has increased significantly. The key products of copper target and anode, cobalt target, etc. have maintained stable batch supply in important chip factories.
According to reports, the YYYJ target industry has successfully broken through key customers and successfully transformed from 4-6 inch products to 12-inch products. The sales volume of 12-inch target products increased by 228% year-on-year. A variety of CuP anodes, 8 -12-inch copper target has passed customer verification and entered the batch supply stage; 12-inch Ti target has been supplied in batches by many customers; 12-inch nickel platinum target, 12-inch high-purity cobalt target, 8-inch high-purity tungsten target Many mainstream manufacturers at home and abroad have passed verification and obtained small-volume sales orders; the target client covers many high-end customers such as SMIC, Dalian Intel, GF, TSMC, UMC, and North China.
The gross profit margin of flat panel display targets continues to decline
In the field of flat panel display, HNLH intervenes in the sputtering target industry through its subsidiaries LYSF and LYJL Optoelectronics. LYSF specializes in high-purity sputtering targets for TFT-LCD/AMOLED and semiconductor IC manufacturing. The products mainly include high-purity molybdenum, copper, and titanium. Other series of products; LYJL Optoelectronics specializes in the research and development, production and sales of indium tin oxide (ITO) target materials. The products are mainly used in the flat panel display industry.
In the first half of 2020, HNLH achieved revenue of 133 million yuan in the field of target materials and ultra-high temperature special functional materials, a year-on-year increase of 333.94%, and a gross profit margin of 22.81%, a year-on-year decrease of 2.73%.
HNLH said that in the field of target materials and ultra-high temperature special functional materials, affected by the Coronavirus (COVID-19) epidemic and Western suppression of China's high-end manufacturing industry, China's domestic display panel, semiconductor and other industries have begun to reconsider strategically. Purchasing and supply channels, the company's target business has accelerated the process of replacing imports. In particular, wide molybdenum targets and high-generation line ITO targets have greatly increased their market share as new growth points, and have maintained rapid development overall.
Judging from the above three companies, under the Coronavirus (COVID-19) epidemic, rapid growth in performance seems to have become the main theme of target manufacturers, but FJAS's performance is not satisfactory.
In the first half of 2020, FJAS achieved operating income of 125 million yuan, a decrease of 21.47% from the same period last year. The net profit attributable to shareholders of listed companies was -2.7527 million, a decrease of 129.51% from the same period last year. In terms of sputtering targets, Ashi Chuang achieved RMB 78,715,900 in the first half of the year, an increase of 2.99% year-on-year, and its gross profit margin was 19.10%, down 7.62% year-on-year.
FJAS has a small production capacity in the field of sputtering targets. Although its products have entered mainstream manufacturers such as BOE, Innolux, Huajiacai, and Visionox, it does not have the advantage of large-scale production.
In addition, as early as 2017, in order to restore their import monopoly and prevent the development of domestic targets, foreign target suppliers have cut the price of molybdenum target materials supplied to China by half, and domestic molybdenum target suppliers such as HNLH and FJAS also Had to reduce prices simultaneously to get orders.
In the first half of 2020, the gross profit margin of most products of NBJF, which focuses on semiconductor target materials, showed a slight increase. BJYY did not disclose the gross profit rate; the gross profit margin of HNLH and FJAS, which focused on flat panel display targets, declined.
Affected by the decline in gross profit margin, the increase in expenses during the period and the decline in non-operating income, FJAS's net profit was 41 million, 28 million, and 15 million from 2017 to 2019, respectively, and its operating performance showed a continuous decline.
Metal companies have deployed target business
In addition to the above four target head manufacturers, under the trend of target localization, metal companies such as NXJM Molybdenum Technology Group, YNGY Platinum, YN Tin Co., Ltd. have expanded to the field of target materials.
The largest molybdenum company in Asia, NXJM Molybdenum Technology Group, focuses on the research and development of molybdenum target materials. In 2019, target product sales increased by 222% year-on-year, and target product sales in the first half of 2020 increased by 28.30% year-on-year.
In 2015, the NXJM sheet business unit successfully developed the first G5 generation molybdenum target, and then continued to move towards higher-end markets. In 2018, it successfully developed the first domestic G6 generation super-large high-end molybdenum target for OLED with completely independent intellectual property rights. , Becoming the first manufacturer in the Asia-Pacific region that can produce OLED-specific super-sized molybdenum targets, breaking the monopoly of European manufacturers in this technology, filling the domestic gap, and taking a key step in the localization of core materials in China's high-end display industry chain , And became Samsung's second largest supplier in the world.
NXJM stated that the company will continue to focus on the research and development of molybdenum target materials and actively promote them in the market.
Since 2009, YNGY Platinum, which focuses on the research of platinum group metals, has begun to carry out research on the preparation technology of platinum-containing magnetic targets, and has undertaken a special project of the international cooperation program-"Key technology and industrialization of nickel-platinum targets for semiconductor devices." A demonstration production line with an annual output of 1,000 pieces of nickel-platinum target products has been built, forming three shapes of rectangular, bowl-shaped and round shapes, and 5 kinds of nickel-platinum target products with different Pt content. The technical performance indicators and dimensional accuracy meet the needs of users. Claim. The products have not only realized substitution of imports, but also exported to well-known American semiconductor companies.
At present, YNGY Platinum's nickel-platinum targets have been supplied in stable batches.
In addition, YNXY Tin Industry Technology Group, the world's number one tin industry company, is developing an indium tin oxide (ITO) target business, and has already completed the preparation process on the test platform to further extend to the downstream industry.