Let’s get started! Phase II of the large-diameter silicon wafer project for integrated circuits is here!

In 2021, in the first quarter, Zhonghuan Shares achieved and even exceeded its planned progress across all tasks in the semiconductor materials business. In light of the current global and Chinese semiconductor industry trends and to meet the needs of our market customers, we have launched Phase II of the Zhonghuan Leading Integrated Circuit Large-Diameter Silicon Wafer Project, aiming to increase production capacity and broaden product coverage.

Market demand is strong, and the industry is in a boom cycle.

In 2021, driven by the rapid advancement of consumer electronics upgrades, automotive electronics, new-energy vehicles, and the new-energy industry, the global semiconductor market continued to expand, with the industry’s overall production capacity steadily increasing. As the world’s largest semiconductor consumer, China’s semiconductor market experienced particularly robust growth—growing at a rate 3 to 4 times faster than the global average. According to comprehensive third-party market analyses, the semiconductor industry’s strong growth momentum is expected to persist for another eight quarters or so.

Business scale continues to expand, and the development of new products and customer certifications are accelerating.

In the first quarter of 2021, the company saw a shortened commissioning schedule for its new production lines. As the direct yield rate on key product lines increased, the plant utilization rate rose further month-on-month, and both year-on-year and month-on-month operating revenues grew rapidly. Meanwhile, the quality and speed of R&D efforts and customer certifications—particularly for new products such as power semiconductor materials and advanced-process integrated circuit semiconductor materials—improved significantly. With the smooth ramp-up of Phase I capacity for the Zhonghuan-led large-diameter silicon wafer project for integrated circuits and accelerated customer validation, the company’s sales and production volume of semiconductor silicon wafers continued to expand. However, the overall market situation remains one of severe supply shortage. In the first quarter, the company’s revenue from its semiconductor silicon wafer business increased by approximately 80% year-on-year, and the company expects this rapid growth trend to continue throughout 2021.

Diversify the product portfolio and enhance market share.

The company remains committed to becoming the global semiconductor materials enterprise with the most comprehensive product portfolio. Currently, it has achieved large-scale mass production of 4- to 12-inch monocrystalline silicon wafers and polished wafers. By semiconductor silicon wafer size, the company’s capacity stands at 500,000 wafers per month for 6 inches and below, 600,000 wafers per month for 8 inches, and 70,000 wafers per month for 12 inches. The silicon wafer business, primarily serving power semiconductor products in the 5- to 8-inch range, is experiencing accelerated growth. The company provides integrated solutions to global customers and has established a significant lead over its domestic peers in China in terms of production and sales scale, product diversity, product quality, and speed of product certification. Meanwhile, the production and sales volume of silicon wafers for integrated circuit products, mainly in the 8- to 12-inch range, continues to grow rapidly, and validation by strategic customers both domestically and internationally is accelerating, laying a solid market foundation for the continued release of capacity in 2021. Overall, the company’s semiconductor silicon wafers are currently in a state of severe supply shortage.

To systematically enhance the company’s coverage of various semiconductor chips, and building on its already established global-leading and China-leading advantages in a wide range of power semiconductor chips, the company continues to accelerate the implementation of Phase I of the large-diameter silicon wafer project for integrated circuits. Meanwhile, on May 8, the company launched Phase I, Stage 1 of Phase II of the project, which includes a production capacity of 200,000 12-inch wafers per month. This initiative will strengthen the company’s ability to serve advanced-process customers in China, further expand its market share in this field, and to some extent fill gaps in the domestic supply chain.

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