The development of integrated circuits requires a well-established materials system for support.

　　1. Establishing a comprehensive materials system is an inevitable requirement for industrial development.

　　From the perspective of the overall development of the integrated circuit industry, manufacturing is the key to driving the industry’s growth. Only by scaling up manufacturing can China’s integrated circuit materials industry create sufficient market space. However, without a corresponding industrial ecosystem, it will be extremely difficult for the integrated circuit manufacturing sector to thrive in isolation. The industrial ecosystem can be understood as comprising two dimensions—horizontal and vertical. Horizontally, it encompasses integrated circuit design, manufacturing, packaging, equipment, materials, as well as specialized financial and intermediary services. Among these, materials play a crucial role in the ecosystem. Vertically, regarding integrated circuit materials, we need not only large, leading enterprises serving as the industry’s backbone, but also a group of small and medium-sized enterprises working in synergy with them. Additionally, we require a number of specialized universities and research institutions. Only when all these components support each other and work together can we foster healthy, sustainable development across the entire industry.

　　Having a relatively well-developed industrial ecosystem in place is crucial for the safe, reliable development of manufacturing and for sustained technological advancement. Localizing the materials supply chain not only helps control manufacturing costs, ensures rapid and timely service responses, and guarantees the safety and controllability of technologies, but also generates numerous additional benefits through industrial synergy effects. In this regard, the development of South Korea’s Samsung Group serves as an excellent case study. Fast-forward 20 years: Back then, Korean companies were virtually absent from the global integrated circuit materials landscape. Today, however, South Korea’s LG-Siltron has become the world’s fifth-largest silicon wafer supplier, and South Korea’s Dongjin has emerged as a leading supplier of photoresists and related chemicals with significant influence in the Asia-Pacific region. Even more prominently, Samsung has grown to become the world’s second-largest supplier of integrated circuit products—second only to INTEL. For China’s integrated circuit industry to achieve success, it must, starting now, focus on planning, perfecting, and enhancing the entire industrial value chain.

　　Synergistic development of industrial chains should naturally also become a strength of our country. Currently, China boasts a number of enterprises specializing in silicon materials for integrated circuit manufacturing, as well as in masks, electronic gases, process chemicals, photoresists, polishing materials, target materials, and packaging materials. Moreover, China possesses a robust foundation in non-ferrous metals, organic and inorganic chemical industries, and abundant mineral resources—industries that are essential for producing these materials. This comprehensive industrial base is an advantage that other countries and regions in the integrated circuit industry simply do not have. However, the technical requirements for materials used in integrated circuit manufacturing are nearly at the limits of current technological development; quality control must be taken to the extreme, and product prices must remain economically viable. Without exception, all these material products represent the highest-end segments within their respective categories. Our key weakness lies precisely in our insufficient overall strength to advance into these high-end fields.

　　II. The integrated circuit materials industry faces challenges in its transition toward high-end segments.

　　Currently, China has a sizable number of integrated circuit materials companies. However, most of these companies are concentrated in the low-end segment, supplying materials for production lines of 6 inches and below. For materials required by 8-inch and larger production lines, the supply largely depends on international companies. In addition to technical challenges, a common hurdle when moving toward the high-end segment is the enormous capital demand—requiring continuous and substantial investment. For example, a production line capable of manufacturing 100,000 90-nanometer 300mm silicon wafers per month would require an investment of approximately 3 billion yuan. Yet the 90-nanometer silicon wafer market was soon overtaken by 45-nanometer technology, and further advances now call for 22-nanometer or even 14-nanometer processes. Before the initial investment has been recouped, companies must already upgrade and reconfigure critical process equipment and testing instruments. The same holds true for photoresists, process chemicals, and polishing materials: although the scale of investment is not as large as that for silicon materials, the intensity of investment in these high-end materials is still 10 to dozens of times greater than that for comparable materials aimed at the general market.

　　Even more challenging to overcome than funding issues is the high barrier to entry for materials. Since materials play a critical role in ensuring the stable operation of an entire manufacturing production line, manufacturers are reluctant to switch suppliers easily. Currently, China’s high-end integrated circuit production lines rely exclusively on materials supplied by major international companies. Although domestic manufacturers place great importance on the localization of materials and actively support material suppliers’ efforts, the lengthy certification process remains a significant hurdle for material companies. After passing factory inspections, materials must undergo a series of rigorous steps—including single-machine testing, small-batch pilot production evaluations, and user product reliability certifications. On average, it takes between one and a half to two years to successfully complete this entire process. During this period, material companies are unable to generate any sales revenue, yet they must still keep their production lines running smoothly and continuously supply products to users. Many smaller material companies with limited product lines simply cannot afford to endure such a prolonged period.

　　Another issue is the insufficient willingness of materials companies to move toward the high-end market. Small, specialized materials firms, constrained by their limited scale and financial resources, dare not take the risk of developing high-end products and tend to focus primarily on the low-end market, leading to product homogenization and price-cutting competition. In contrast, traditional large-scale chemical and nonferrous metal companies—possessing advantages in both basic materials production and financial strength—are well-positioned to shift toward the production of sophisticated, high-value-added products. Although high-end, sophisticated products such as integrated-circuit materials offer higher profit margins than basic products, they also present significant challenges: these products are technologically complex, demand stringent quality control, require highly efficient operational management, call for meticulous and comprehensive customer service, and heavily rely on top-tier talent. For companies accustomed to producing and selling bulk commodities, such a transition is difficult, yields slow results, and faces insufficient market capacity; in the short term, the input-output ratio is unbalanced. The current situation is that international giants import low-priced raw materials from China, leverage their advanced technologies and management expertise to produce sophisticated, high-end products, and then export these products at premium prices to Chinese manufacturing enterprises.

　　III. China’s integrated circuit manufacturing materials industry is entering a historic period of breakthrough development and unprecedented opportunities.

　　With support from national science and technology programs such as the “02 Special Project,” some materials have begun to enter mass production at 8-inch fabrication plants. Polishing slurries for CMP processes, sputtering targets, copper electroplating solutions and additives, high-purity nitrogen trifluoride, and tungsten hexafluoride have already been applied in 12-inch production lines, while another batch of materials is currently undergoing application certification and evaluation. While paying close attention to technological development, relevant enterprises have also stepped up efforts to enhance their capabilities in quality control, lean management, and customer service, leading to an overall improvement in the industry’s comprehensive strength. The issuance of the “National Outline for Promoting the Development of the Integrated Circuit Industry” will steer manufacturing into a new wave of intensive facility construction. According to the development goals outlined in the “Outline,” integrated circuit industry sales revenue is expected to exceed 350 billion yuan by 2015, and the industry’s annual average growth rate of total sales revenue is projected to surpass 20% by 2020. This implies that the materials market will expand by more than 50% over its current size and will continue to grow at an annual average rate of 20%, presenting enormous market potential and promising development prospects.

　　Even during the酝酿 stage, before the official release of the Outline, it has already played a significant guiding role in the materials industry. Private high-tech enterprises engaged in advanced materials have strengthened their confidence in business development, and private investment institutions have increasingly focused on material companies with strong growth potential, actively seeking opportunities to collaborate with such firms. Meanwhile, some privately listed companies have also turned their attention to the integrated circuit materials sector, alleviating the financing difficulties faced by small businesses to some extent.

　　Some large, financially strong basic raw materials enterprises have also begun to pay attention to the high-end integrated circuit materials sector. Certain chemical companies have even established dedicated subsidiaries or business units specializing in integrated circuit materials. The original basic raw materials industries of these companies continue to face challenges such as environmental pressures, limited room for product value appreciation, and intense homogeneous competition. As a result, these companies themselves need to adjust their product structures and upgrade their technologies. At the same time, the regions where these companies are located are also facing demands for economic transformation and development. The entry of these large enterprises will significantly reshape the industry structure of integrated circuit materials and inject new momentum into the industry’s development.

　　The emergence of new types of industrial organizations, such as industry alliances, is playing a supportive role in the development of the materials industry. The practice over the past year and more since the establishment of the Integrated Circuit Materials Industry Technology Innovation Strategic Alliance—jointly initiated by domestic integrated circuit manufacturers, various materials producers, related research institutions, and universities—has demonstrated that industry alliances have begun to exert their influence in accelerating the formation of an industrial ecosystem, promoting collaborative innovation and business cooperation across all links in the industrial chain, and facilitating future international cooperation and industrial integration.

　　China’s integrated circuit materials industry is now at a strategic juncture marked by opportunities for high-end development. At this critical moment, industrial funds should focus on providing targeted support, driving and guiding social capital investment, further stimulating enterprise vitality and creativity, intensifying efforts in independent technology development and international technological cooperation, and promoting coordinated development across the entire industrial chain. This will enable material products with the necessary conditions to be planned, certified, and mass-produced in parallel with the development of the integrated circuit manufacturing industry, thereby partially reversing the passive situation of first importing advanced technologies and then gradually replacing them with domestically produced alternatives. With the combined efforts of supportive national policies, market demand-driven forces, enterprises’ own initiatives, and close collaboration within the industrial chain, China’s integrated circuit materials industry is fully capable of achieving leapfrog development and becoming a major global player in the international integrated circuit materials sector. (Reprinted from China Electronics News)