For a long time, China has not only lagged behind overseas giants in chip design and manufacturing, but also the underlying raw material, silicon wafer, is also a key link that is “stuck in the neck”. If domestic substitution can be achieved on this track, it will not only help reduce the cost of domestic chip manufacturing, but also strategically help build a complete chip industry chain.
Silicon Industry Group is a leading manufacturer of semiconductor wafers in China. Through the technical research and development and mass production of its subsidiaries, it has not only reached the international advanced level in 200mm silicon wafers, but also took the lead in realizing large-scale sales of 300mm silicon wafers in mainland China.
Silicon wafers are the raw materials of chips. For economic reasons, the larger the area of a single silicon wafer, the more chips can be cut out. If Chinese manufacturers want to catch up on 7nm or even 5nm process chips, larger-area silicon wafers are essential raw materials. The domestic commercialization of 300mm silicon wafers in the silicon industry is of great significance to the domestic substitution of my country’s chip manufacturing industry.
However, the semiconductor industry is obviously cyclical. The silicon wafer industry has now entered a period of oversupply adjustment, with high customer inventories and declining demand. Both sales and sales of the silicon wafer industry declined in 2019. Through fundraising on the Science and Technology Innovation Board, can the silicon industry continue to increase capital investment in the counter-cyclical period to catch up with the next recovery in the industry?
Dislocation competition based on 200mm silicon wafer
Due to its late start, China’s pursuit of the semiconductor industry covers almost all aspects of the industry chain, and it is not a one-day effort: in the downstream links such as chip design, it has to face the patent network built by developed international manufacturers for many years; upstream In terms of materials, it is also necessary to fill the gap of backward manufacturing technology.
Going back to the most upstream of the chip manufacturing process, the semiconductor silicon wafer commonly known as “wafer” is the raw material for making chips, and it is also one of the links in China’s semiconductor industry chain with the largest gap between the international advanced level. Based on silicon wafers, various circuit component structures can be fabricated, so that silicon wafers can eventually become integrated circuit products with specific electrical functions.
From sand and stone raw materials to metallurgical grade silicon and Electronic grade silicon, the raw materials are continuously purified, and finally high-purity polysilicon is formed. High-purity polycrystalline silicon is also grown into single crystal silicon through processes such as melting. After that, single crystal silicon is formed into single crystal silicon rods under the Czochralski method and other processes, and then through the processes of cutting, rolling, slicing, chamfering, polishing, laser engraving and other processes to form silicon wafers.
According to the size of the silicon wafer, mainstream products can be divided into 150mm (6 inches), 200mm (8 inches), 300mm (12 inches) and so on. With the improvement of chip technology, the requirements for the size of silicon wafers are also higher and higher due to cost considerations. Under normal circumstances, 90nm and below process chips mainly use 300mm silicon wafers, while 90nm and above processes mainly use 200mm and below silicon wafers.
After decades of catching up, Chinese manufacturers are not only competent in the manufacture of 150mm silicon wafers, but also the leaders in the silicon industry and other industries have reached the international advanced level in the 200mm size, which has made great contributions to the domestic substitution of key semiconductor materials in my country. .
Founded in 2015, the silicon industry group has built a complete product line in sizes of 200mm and below, covering polished wafers, epitaxial wafers and SOI silicon wafers, through strategies such as equity investment and mergers and acquisitions.
From a process point of view, polished wafers need to meet the increasing demand for silicon wafer flatness of integrated circuits; epitaxial wafers are epitaxially grown on the basis of polished wafers to meet the production needs of specific devices; SOI (Silicon-On- Insulator) silicon wafer is to introduce a layer of oxide insulating buried layer on the top layer of silicon and the back substrate, so as to realize the dielectric isolation of components in the circuit and prevent leakage.
Through strategies such as technical cooperation, research and development and investment, the silicon industry and its subsidiaries have achieved leapfrog growth in business, and have also formed their own advantages in technology, standing out from a number of domestic manufacturers. In addition to the business of the subsidiary Xinao Technology, the silicon industry accounted for 2.18% of the global silicon wafer market sales, and the domestic market accounted for 26.32% in 2018.
The proportion of global semiconductor wafer industry sales in 2018
External mergers and acquisitions and cooperation are one of the secrets for silicon industry groups to master advanced technology and achieve rapid growth. In 2016, the silicon industry acquired Okmetic, which brought the Finnish wafer manufacturer into the bag, and also mastered its industry-leading crystal pulling technology.
Crystal pulling is one of the core processes in the production of monocrystalline silicon. The efficiency of crystal pulling and the stability of technical indicators of intermediate products will directly affect the yield and quality of silicon wafers. Thanks to the blessing of crystal pulling technology, Okmetic’s revenue growth rate has been maintained at more than 15%, and its net profit has also increased from 79 million yuan in 2007 to 128 million yuan in 2018, becoming the fastest growing silicon industry. engine.
In 2016, the silicon industry invested in Soitec and laid out SOI silicon wafers. The latter is not only the world’s seventh largest semiconductor wafer manufacturer, but also the world’s largest SOI wafer manufacturer. In the same year, the silicon industry invested in Xinao Technology, thereby entering the domestic SOI silicon wafer market, and now holds an 89.19% stake in the latter.
In terms of business operation, Xinao Technology has formed a synergy with Soitec and obtained the authorization of Smart CutTM technology. Smart CutTM is one of the most advanced thin-film SOI silicon wafer production processes in the world. Its patent is unique to Soitec and is only licensed to Shin-Etsu Chemical, Universal Wafer and Xinao Technology in the world.
By cooperating with Soitec, Xinao Technology has not only become the only enterprise in mainland China with Smart CutTM technology and the ability to produce world-leading SOI silicon wafers, but also has gradually close business cooperation with Soitec. According to the “License and Technology Transfer Agreement” signed by Xinao Technology and Soitec in 2014, the SOI chips produced by Xinao Technology using Smart CutTM technology can be sold to other domestic customers in addition to Soitec.
In the new agreement in 2018, SOI chips produced by Xinao Technology using Smart CutTM technology must be sold to Soitec first, and then sold by Soitec to third parties. At the same time, Xinao Technology also purchased substrates for SOI silicon wafer production from Soitec.
In terms of business model, the silicon industry makes full use of the procurement characteristics of small batches, multiple batches and various product types in the high-end market segment, and forms a dislocation competition with the industry leaders, thus gaining a firm foothold in the semiconductor silicon wafer market of 200mm and below.
Domestic breakthrough, entering 300mm large silicon wafer
In general, the diameter of a single crystal silicon rod is determined by the pulling speed and rotation speed of the seed grains. The slower the rotation speed in the crystal, the larger the diameter, but at the same time it will bring about defects in the lattice structure due to the unstable rotation speed. From a technical point of view, the larger the area of the silicon wafer, the higher the technical difficulty.
From a market point of view, increasing the diameter of semiconductor silicon wafers is the need for chip manufacturers to pursue Moore’s Law. According to Moore’s Law, the number of transistors integrated on an integrated circuit doubles every 18 months. That is, the integrated circuit is doubled and the cost is reduced by half. For semiconductor wafers, the larger the diameter, the greater the number of chips that can be produced on a single wafer.
Take 300mm silicon wafer and 200mm silicon wafer as an example. Although the diameter of the former is only 1.5 times that of the latter, the actual area is 2.25 times that of the latter. Because the chips are mostly rectangular, the wasted edge of the larger wafer will be smaller. Therefore, under the same process conditions, the usable area of 300mm silicon wafer is more than twice that of 200mm, and the usable rate is about 2.5 times that of the latter. According to SEMI statistics, the global 300mm semiconductor silicon wafer shipment area accounted for 63.83% of the total semiconductor silicon wafer shipment area in 2018.
Therefore, as the focus of market demand shifts, the pace of Chinese manufacturers to catch up also extends to this point, and the silicon industry and its subsidiary Shanghai Xinsheng are no exception. Shanghai Xinsheng first pulled out the first 300mm monocrystalline silicon ingot in October 2016, and opened up the whole process of 300mm semiconductor silicon wafers the following year, and finally achieved large-scale sales in mainland China in 2018.
According to the conventional process, semiconductor silicon wafers need to be certified by chip manufacturers before mass supply, and the cycle is generally 9-18 months. Although Shanghai Xinsheng has not been on the track for a long time, it has now been certified by 49 customers including GlobalFoundries and SMIC.
In addition to promoting customer certification and expanding sales, the “national team” behind the silicon industry is also worthy of attention. The main partner of the silicon industry and its subsidiaries is the Microsystem Institute, which is the controlling shareholder of the Silicon Industry Shareholders Group, as well as the initiator and second largest shareholder of Xinao Technology.
In addition to the R&D cooperation between Xinao Technology and Microsystems on the SOI chip, Shanghai Xinsheng and Microsystems also jointly undertake the two major topics of “20-14nm technology node 300mm silicon wafer research and development” and “300mm single crystal rod growth technology research and development”. , to further improve its technical strength in R&D and manufacturing of 300mm silicon wafers.
The industry’s downward cycle expands against the trend
The semiconductor industry is obviously cyclical. When the economic situation improves, the entire industry chain actively expands production capacity. Then, in order to dilute the cost of expanding production capacity and increase production, product prices fall. After that, the market environment of oversupply made manufacturers unprofitable, and the entire industry waited for the increase in demand to digest production capacity, and then entered the next rising period. This is also the reason why the shipment area of global semiconductor silicon wafers has been increasing year by year, while sales have fluctuated cycles.
Global semiconductor wafer market size
In 2019, the industry entered a downward cycle, with both shipments and sales declining. According to data released by SEMI, global silicon wafer shipments fell by 7% year-on-year in 2019, and sales fell from $11.38 billion to $11.15 billion.
The cooling of the market has also had an impact on the giants. In addition to the growth of Shin-Etsu Chemical and Global Wafer, the performance of SUMCO, Siltronic and Hejing Technology all declined significantly. SUMCO, which ranks second in the global silicon wafer market, and Siltronic, which ranks third, both pointed out in their business reports that the industry is expected to pick up in the second half of 2020 due to high customer inventories and it will take some time to digest inventories.
The silicon industry has also been affected, especially the shrinking downstream demand for 300mm silicon wafers, which has dragged down the performance. From January to September 2019, the net profit of the silicon industry turned from positive to negative, and the performance was under pressure. Among them, the capacity utilization rate of 300mm silicon wafers fell to 44.36%.
At present, the market share of the top five silicon wafer manufacturers has reached 92.57%, and the silicon industry still has disadvantages in the technical indicators of 300mm silicon wafer products. The silicon industry, which has already established a firm foothold in 200mm silicon wafers, still needs more competitive products in order to seize the growth opportunities brought about by new demands such as 5G.
In the downturn of the industry, there is no other way but to wait for the recovery of the entire industry chain. However, the fundraising of the Science and Technology Innovation Board has undoubtedly injected a boost into the way of the silicon industry to catch up. Under the circumstance that competitors are stagnant, it is a good opportunity for the silicon industry to improve its product technical indicators through research and development. Whether it can catch up with the next cycle of industry recovery depends on the present.
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