Chinese Semiconductor Industry Chain

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I .Overview of the Semiconductor Industry Chain

The semiconductor industry chain is a highly specialized and well-defined industry, covering multiple links from raw material supply, design, manufacturing to packaging and testing.

Core link: integrated circuits are the core of the semiconductor industry, with a market share of 83%. The industrial chain can be subdivided into IC design, IC manufacturing and IC packaging and testing, of which IC design is in the upstream of the industrial chain, IC manufacturing is the midstream link, and IC packaging is the downstream link.

Industrial chain transfer: The global integrated circuit industry has undergone industrial transfer, from packaging and testing to manufacturing, making the division of labor in the industrial chain more clear.

China's semiconductor industry chain: The upstream of China's semiconductor industry chain includes EDA (electronic design automation), IP cores, semiconductor materials and semiconductor equipment; The midstream includes sensors, optoelectronic devices, integrated circuits, and semiconductor discrete devices; The downstream is widely used in consumer electronics, automotive electronics, medical, communication technology, artificial intelligence, Internet of Things, new energy, industrial electronics and other fields.

II.Semiconductor Upstream

1,Design Supports

(1)EDA：

China's EDA market has grown rapidly in recent years, with a market size of about 9.31 billion yuan in 2020 and is expected to reach 12.3 billion yuan in 2023. The global EDA market is highly concentrated and is dominated by a few companies such as Synopsys, Kenteng Electronics, and Siemens EDA.

There are three main listed EDA companies in China:

Empyrean：Empyrean is one of the leading companies in China's EDA industry, focusing on the development, sales and related services of EDA tools.

Primarius：Primarius' EDA products include manufacturing EDA tools, design EDA tools, and semiconductor device characterization test instruments, and its customers include nine of the world's top 10 foundries

Guangli Micro: According to public information, Guangli Micro continues to increase the research and development of EDA tools, and has launched products including process monitoring (PCM), manufacturability (DFM) series EDA software, and one-stop testability (DFT) design solutions.(

2)IP Cores

IP design, also known as Intellectual Property Core design, is an important part of integrated circuit design. An IP core is a hardware description language program with specific functions, which is a validated, reusable, and deterministic module with independent intellectual property rights. IP cores can greatly reduce the design workload, shorten the design cycle, and improve the success rate of chip design.

Domestic IP listed companies：

VeriSilicon：It has six categories of autonomous processor IP, including graphics processing unit (GPU), neural network processor (NPU), video processor (VPU), digital signal processor (DSP), image signal processor (ISP), and display processor (Display Processor)4851. These IP cores are used in multiple market segments, such as consumer electronics, automotive electronics, computers and peripherals, industrial, data processing, and the Internet of Things

2,Semiconductor Materials

Semiconductor materials are the cornerstone of the industrial chain, and the scale of China's semiconductor materials market has grown year by year from 2017 to 2020, and is expected to reach $11.2 billion in 2023. Semiconductor materials are electronic materials that have semiconductor properties. They can be divided into two categories: wafer fabrication materials (front-end) and packaging materials (back-end) according to the application link. Front-end materials include silicon wafers, electronic gases, masks, photoresists and their supporting materials, etc.; The back-end materials include lead frames, package substrates, ceramic materials, etc.

(1)Wafer Fabrication Materials

Semiconductor silicon wafers, also known as silicon wafers, are key materials for making integrated circuits and other semiconductor devices. Domestic listed semiconductor wafer companies mainly include: National Silicon Industry, Microtek, Thinkon Semi, Lion Micro, TCL Zhonghuan, Gritek, etc.;

Semiconductor material special gas (referred to as electronic special gas) is an indispensable raw material in the production of integrated circuits (IC), flat display devices (LCD, LED, OLED), solar cells and other electronic industries. They play an important role in the semiconductor manufacturing process, participating in various links such as etching, cleaning, epitaxial growth, ion implantation, etching, etching, so they are called the "blood" of semiconductor manufacturing. Listed companies of special gases: CSSC Special Gas, Jinhong Gas, Huate Gas, Jacques Technology, Nanda Optoelectronics, Kaimei Special Gas, etc

Semiconductor photomasks, also known as photomasks or reticles, are essential and critical materials in the semiconductor manufacturing process. As the master of pattern transfer, it carries the design graphics, and transfers these patterns to the semiconductor wafer by way of exposure to achieve mass production. The listed companies of photomask include Philip, China Resources Micro, Luwei Optoelectronics, and Qingyi Optoelectronics

Semiconductor photoresist, a key material in the semiconductor manufacturing process, is a light-sensitive, hybrid liquid that transfers fine patterns from the reticle (mask) to the semiconductor wafer during the photolithography process. Eight King Kong Semiconductor Photoresists: Jingrui Electric Materials, Nanda Optoelectronics, Tongcheng New Materials, Chinachem New Materials, Jacques Technology, Rongta Photosensitive, Shanghai Xinyang, Kuangshun Materials.

Wet electronic chemicals are chemicals used for cleaning and etching in semiconductor manufacturing processes and are critical to ensuring the performance and yield of semiconductor devices. Listed companies of wet electronic chemicals: Jianghua Micro, Jingrui Electric Materials, Shanghai Xinyang, etc.;

Sputtering targets are a key material used in physical vapor deposition (PVD) technology, mainly for the preparation of thin film materials. Sputtering targets are widely used in the electronics and information industry, such as integrated circuits, information storage, liquid crystal displays, laser memory, electronic control devices, etc. Listed companies of sputtering targets: Jiangfeng Electronics, Research New Materials, Ashtron, etc

Polishing materials play a vital role in semiconductor manufacturing, especially in the process of chemical mechanical polishing (CMP) China's CMP polishing materials industry is constantly developing, and some companies have achieved technological breakthroughs, breaking the monopoly of foreign CMP polishing materials and realizing domestic substitution. Polishing materials listed companies: Anji Technology, Dinglong shares;

(2)Packaging Material

Semiconductor lead frames are key structural components used in integrated circuits and semiconductor packages. Its function is to act as the carrier of the chip, and realize the electrical connection between the lead end of the internal circuit of the chip and the outer lead wire through bonding materials (such as gold wire, aluminum wire, copper wire) to form an electrical circuit. Domestic semiconductor lead frame listed companies mainly include Kangqiang Electronics

Semiconductor substrate is the basic material for manufacturing semiconductor components and printed circuit boards, which mechanically protects and supports the chip, and is also the main way for the chip to dissipate heat to the outside world. Domestic semiconductor substrate listed companies mainly include: Shennan Circuit, Suntak Technology, Xingsen Technology, etc

Semiconductor ceramic materials are a class of ceramics with special electrical properties, and they play an important role in the electronics industry. Semiconductor ceramics are widely used in electronic products, semiconductor industry, lighting, automobiles, medical equipment and other fields. Semiconductor ceramic materials: China Magnetics, CCTC

Semiconductor probes are key components used in the semiconductor chip testing process, mainly to realize the connection between the pins of the chip and the functional modules of the testing machine. Domestic listed company: UIGREEN.

3,Semiconductor Equipment

Semiconductor equipment refers to the production equipment required for the production of various semiconductor products, and they are the key support links in the industrial chain of the semiconductor industry. Technological advancements in semiconductor equipment are important factors driving the development of the semiconductor industry, and they play a vital role in chip design, wafer fabrication, and packaging and testing. Semiconductor equipment can be mainly divided into silicon wafer production process equipment, wafer manufacturing process equipment, packaging and testing process equipment, etc.

Among the wafer manufacturing equipment, lithography, etching, and thin film growth equipment account for the highest proportion, accounting for more than 70% of the total market, and semiconductor equipment is widely used in integrated circuits, advanced packaging, LED, MEMS, power electronics, flat panel displays, photovoltaic cells and other semiconductor-related fields. The global semiconductor market will shrink by 12% year-on-year in 2023, but semiconductor equipment sales in the Chinese market are expected to exceed $30 billion, a record high.

Etching equipment is one of the key equipment in the semiconductor manufacturing process, which is mainly used to selectively remove unwanted materials on silicon wafers by chemical or physical methods to form the desired circuit pattern. Listed companies of etching equipment: NAURA,AMEC,THINKON Semi.

Lithography machine is one of the three major pieces of semiconductor equipment, known as the "crown jewel of the semiconductor industry", the technical content and value content is extremely high, the lithography machine adopts similar to the technology of photo printing, and the fine graphics on the mask are printed on the silicon wafer through light exposure, the global lithography machine market concentration is high, ASML, Nikon, Canon market share is more than 90%, of which ASML monopolizes the EUV lithography machine, the domestic lithography machine industry started late, and there is a gap with overseas. However, in recent years, domestic enterprises such as Shanghai Microelectronics Equipment Co., Ltd. (SMEE) have made some progress in the field of lithography machines, lithography equipment plays a vital role in semiconductor manufacturing, with the development of technology and the growth of market demand, the lithography equipment industry is expected to maintain a growth trend, while domestic lithography equipment manufacturers are also actively enhancing their competitiveness to meet the growing market demand. The listed companies with the concept of domestic lithography machine mainly include: ZJ Hi-Tech, MLOPTIC, Optotec, Fujing Castech.

Thin film deposition equipment is one of the key equipment in the semiconductor manufacturing process, which is used to deposit thin films of various materials on the surface of wafers, which can be metal, dielectric or semiconductor materials, and is widely used in various manufacturing stages of integrated circuits. Domestic listed companies: NAURA, PIOTECH, Leadmicro, etc

Cleaning equipment: Shengmei Shanghai, Zhichun Technology, Xinlai Materials, Fuller; Polishing equipment: Huahai Qingke; Ion implanter: Wanye Enterprise; Gluing and developing equipment: Xinyuan Micro; Back-end equipment: Jingce Electronics, Saiteng Co., Ltd., Changchuan Technology, Huafeng Measurement and Control, Weice Technology, Jinhaitong, Helin Micro-Nano, Liande Technology, Nike Equipment; Equipment parts: Jiangfeng Electronics, Fuchuang Precision, Xinlai Materials, Shengong Co., Ltd., Zhengfan Technology, etc.; Clean room construction: Shenghui Integration, Yaxiang Integration, Parsons Brinckerhoff;

III. Semiconductor Midstream

1,IC

(1)Logic Chip

Also known as logic integrated circuit (IC), it is a type of semiconductor device, which is mainly used to perform Boolean logic operations and realize the logic functions of digital circuits. Logic chips contain logic gates (e.g., AND gates, OR gates, NAND gates, etc.) and other logic circuits that are the basis for building more complex digital systems. Logic chips are widely used in computers, mobile devices, automotive electronics, industrial control systems, communication equipment and other fields. Logic chips are indispensable components in modern electronic devices, and they play a key role in achieving digitalization and intelligence. With the continuous advancement of technology, logic chips are developing in the direction of higher integration, lower power consumption and stronger performance.

The central processing unit (CPU) in a logic chip is the core component of a computer system, responsible for executing instructions and processing data in a program. CPU listing: Loongson Zhongke (core first share), Willchip (mainstay chip ), Nationalchip, Rockchip, Jingchen shares,Gosinoic, Giga Device

A GPU (Graphics Processing Unit) is a logic chip specifically designed to process graphics and image data. GPUs have more cores than traditional CPUs and are capable of handling a large number of parallel tasks at the same time, which makes GPUs excel in areas such as graphics rendering, video editing, data analysis, scientific computing, and artificial intelligence. GPU listed companies: Loongson Zhongke Core, Jingjia Micro. Cambricon.

(2)Microprocessor

The microprocessor is the core component of the central processing unit (CPU) of a computer, which is responsible for executing instructions and processing data in a program. Microprocessors of listed companies: Fullhan Micro, Allwinner Technology, Beijing Ingenic

(3)Memory Chips

Memory chips are semiconductor devices used to store data, and they play a vital role in computers and other electronic systems. There are several main types of memory chips, including random access memory (RAM), read-only memory (ROM), flash memory (NAND Flash and NOR Flash), etc. Memory chips are widely used in personal computers, servers, mobile devices, consumer electronics, and industrial control systems. Market size: The memory chip market is a huge industry, and according to market research, the global memory chip market size will be about $100 billion in 2022. The three giants of domestic storage: BIWIN Storage, GigaDevice, Longsys, and Yangtze River Storage and Changxin Storage are not listed.

(4)Analog chips

Also known as analog integrated circuits (analog ICs), they are semiconductor devices designed to process analog signals. Unlike digital chips, analog chips deal with continuously changing signals such as sound, light, temperature, etc. Analog chips can perform amplification, filtering, conversion (e.g., analog-to-digital converter ADCs and digital-to-analog converter DACs), comparison, and other analog signal processing functions. Analog chips are widely used in communication equipment, automotive electronics, medical equipment, industrial control systems, audio and video equipment, power management and other fields. Analog chip design needs to consider factors such as signal linearity, noise, distortion, bandwidth, stability, and power consumption. According to market research, the analog chip market is a growing sector, and the global analog chip market size is expected to reach approximately $70 billion in 2023. Domestic listed companies: Shanghai Belling, Montage Technology, SG Micro.

2,Other Devices

(1),Discrete Devices

Discrete devices refer to electronic components that are manufactured separately in the semiconductor manufacturing process, and they are not integrated circuits integrated on a single chip. These devices are typically used in applications that require high power or high frequencies and can provide higher performance than integrated circuits. Discrete devices include diodes, transistors, MOSFETs (metal-oxide-semiconductor field-effect transistors), IGBTs (insulated gate bipolar transistors), etc. IGBT (insulated gate bipolar transistor) is a three-terminal semiconductor switching device, which combines the high input impedance of MOSFET and the low on-voltage drop characteristics of bipolar transistor, which is widely used in inverters, electric vehicles, power transmission and other fields. The main function of IGBTs is to act as switches in power electronic systems to control the flow of current. It is capable of operating at high voltages and currents, with fast switching speeds and low on-voltage drops. This allows IGBTs to play a key role in the fields of frequency converters, electric vehicles, power transmission and distribution, household appliances, and industrial control. Domestic listed companies: Powersemi, TCL Zhonghuan, Silan Micro,CSMC, Jiejie Microelectronics, Macmicst.

(2),Optoelectronics

Semiconductor optoelectronics are electronic devices made by using the photoelectric effect of semiconductor materials, and they have a wide range of applications in the field of photoelectric conversion and optical communication. Optoelectronic listed companies: Huagong Technology, Optoelectronics Co., Ltd

(3)Sensor

A semiconductor sensor is a sensor that uses the properties of semiconductor materials to detect and convert various physical quantities (such as light, temperature, pressure, humidity, etc.) into electrical signals. Sensor listed companies: Hanwei Technology, Canrui Technology

3,Manufacturing Foundry

Semiconductor manufacturing foundry refers to companies that specialize in semiconductor manufacturing, and they provide production services to chip design companies that do not have their own manufacturing facilities. Wafer foundry is an important part of the midstream manufacturing field of the semiconductor industry chain, which is greatly affected by the overall prosperity of the semiconductor industry. The world's major semiconductor foundries include TSMC, GlobalFoundries, UMC, SMIC, and Samsung Foundry. The semiconductor manufacturing foundry industry is a technology-intensive industry, with high requirements for process technology, production scale and cost control. With the rapid development of the global semiconductor industry, the wafer foundry market is expected to continue to grow. Listed wafer foundry: SMIC.

Semiconductor compound foundry refers to the process of using compound semiconductor materials for chip manufacturing. Compound semiconductors mainly refer to the second and third generation of semiconductor materials and processes, which have some special advantages over the first generation of semiconductor materials (mainly silicon) and are very suitable for the manufacture of some specific electronic devices. Compound foundry listed companies: Jiejie Microelectronics, San'an Optoelectronics

4,Packaging and Testing

Packaging and testing is an important link in the semiconductor industry chain. It mainly involves the packaging of the produced semiconductor chip and a series of test processes to ensure that the performance, reliability and stability of the chip meet the design requirements. The packaging and testing technology has developed from traditional packaging forms such as DIP and SOP in the early days, to advanced packaging technologies such as CSP and BGA, as well as more advanced packaging technologies such as system-in-package (SiP), flip solder packaging (FC), and bumping on the chip. The global packaging and testing market size was approximately $81.5 billion in 2022 and is expected to reach $96.1 billion by 2026. Packaging and testing is an indispensable part of the semiconductor industry chain, with the advancement of technology and the expansion of the market, the packaging and testing industry will continue to develop and innovate to meet the growing demand for semiconductor products. The four tigers of packaging and testing: JCET GROUP, Tongfu Microelectronics, Jingfang Technology, Huatian Technology

IV,Semiconductor Downstream

The semiconductor downstream market refers to the application fields of semiconductor products, which are very broad, including but not limited to the following main parts: Consumer electronics: including smart phones, computers, TVs, cameras and other electronic products, in which key components such as processors and memories all need to use semiconductor chips.

Automotive electronics: With the development of automobiles towards electrification, intelligence, and networking, semiconductors are becoming more and more widely used in automobiles, such as power control systems, in-vehicle infotainment systems, and autonomous driving systems.

Communication technology: The infrastructure construction and terminal equipment of communication technologies such as 5G and optical fiber communication require a large number of semiconductor devices, including radio frequency chips, optical communication chips, etc.

Artificial intelligence: AI chips are the core of the artificial intelligence field, which is used to perform complex algorithms and data processing tasks, and is widely used in cloud computing, edge computing, intelligent terminals and other scenarios.

Internet of Things: IoT devices require various types of semiconductor sensors, processors, and communication chips to enable smart connectivity and data exchange. Industrial electronics: Control systems, robots, sensors and other equipment used in industrial automation, intelligent manufacturing and other fields all need the support of semiconductor devices.

Medical electronics: Medical devices such as CT scanners, MRI equipment, monitors, etc., rely on high-performance semiconductor devices to provide precise control and data processing capabilities.

New energy: Semiconductor devices are also needed to improve efficiency and reliability in new energy equipment such as solar inverters and wind power control systems. The development of the semiconductor downstream market is affected by many factors such as technological progress, market demand, and policy support, and the downstream market of the semiconductor industry is expected to continue to grow with the development of emerging technologies and the expansion of application fields.