Reflections on the Development of the Electronic Gases Industry

　　I. Applications of Electronic Gases in the Modern Electronics Industry

　　The modern electronics industry has become a core industrial system that underpins the sustainable development of the national economy and safeguards national strategic security. The advancement of the electronics industry—represented by ultra-large-scale integrated circuits and solid-state semiconductor lighting—has transformed human modes of production, daily life, and thinking, significantly promoting the progress of human civilization and greatly boosting the sustainable growth of the global economy. The level of development and industrial scale of integrated circuit technology have become important indicators for measuring a country’s overall technological prowess, degree of modernization, and economic strength.

　　Electronic gases are the most fundamental materials in the electronics industry, including integrated circuits and solid-state semiconductor lighting. They are often referred to as the "food grain" and "blood" of the semiconductor industry. In the manufacturing processes of microelectronic and optoelectronic devices, numerous steps—such as epitaxy, film deposition, doping, etching, cleaning, and packaging—are involved; virtually every step and every stage is inseparable from electronic gases. Beyond this, electronic gases are also widely used in industries such as solar energy, display manufacturing, national defense, military applications, aviation, and aerospace.

　　II. Current Status of the Electronic Gases Market and Industry

　　Currently, the global semiconductor industry’s center is rapidly shifting toward China. As a result, China’s demand for electronic gases is also showing a significant upward trend. The global electronic gas market is valued at approximately 3 billion U.S. dollars, while the Chinese mainland market alone is worth over 3 billion RMB.

　　China’s electronic gas industry is in its early stages of development. The major domestic enterprises engaged in the production of high-purity electronic gases include the 718th Institute of China Shipbuilding Industry Corporation, Liming Chemical Research & Design Institute Co., Ltd., Foshan Huate Gas Co., Ltd., Luling Gas (Tianjin) Co., Ltd., Zhonghao Guangming Chemical Research & Design Institute Co., Ltd., Dalian Bonded Zone KeliDe Chemical Technology Co., Ltd., Beijing Huayu Tongfang Chemical Technology Development Co., Ltd., the Hangzhou Special Materials Division of Guangming Chemical Research & Design Institute, Baoding Huayu New Electronic Materials Co., Ltd., Suzhou Jinhong Gas Co., Ltd., and over a dozen other companies. Although China’s electronic gas industry has made significant progress in recent years, the products currently being manufactured still fall short of fully meeting the demands of related electronic devices. Moreover, the production capacity remains relatively small, and most of the produced gases can only be used for manufacturing lower-specification products. In particular, gases with purity levels of 6N or higher—essential for the fabrication of ultra-large-scale integrated circuits—still largely rely on imports to meet demand.

　　The domestic electronic gas market is largely monopolized by several major multinational gas companies, such as Air Liquide of France, Praxair, Air Products of the United States, Linde, and Taiyo Nippon Sanso. As international competition in the electronics industry intensifies, products that rely on imported high-purity electronic gases for the manufacture of microelectronic and optoelectronic devices are facing severe market challenges. Moreover, most electronic gases are flammable, explosive, and highly toxic, placing them under strict regulatory control. This makes importing these gases extremely cumbersome and results in lengthy transportation cycles, seriously hampering the healthy and stable development of China’s optoelectronics and microelectronics industries. Furthermore, since electronic gases serve as crucial core raw materials widely used in the defense and military industries, developed countries and regions such as Europe and the United States have designated certain high-purity electronic gases—such as phosphine and arsine—as sensitive strategic materials, imposing technological blockades and embargoes on China. This has severely impacted the development of China’s defense, military, aviation, and aerospace sectors. Consequently, China’s microelectronics industry has long been eager to launch research and production of electronic gases, aiming to address the “source” issue in microelectronics manufacturing, fundamentally alleviating the concerns plaguing the microelectronics manufacturing sector and breaking through the “bottleneck” hindering the development of megabit- and ULSI-level integrated circuits.

　　III. Reflections on the Development of the Electronic Gases Industry

　　From a technical standpoint, domestic enterprises have basically acquired the capability to produce high-purity electronic gases. The main reasons why domestic electronic gas manufacturers cannot enter fields such as integrated circuits are as follows:

　　First point: Local suppliers of electronic gases are relatively small in scale and unable to provide customers with comprehensive services. Compared with international industry giants, domestic suppliers generally have a smaller footprint. Currently, most of them rely on low-price competition to gain some market share. Competition among local suppliers is intense, leading to rapid price declines, razor-thin profit margins, and even losses in some cases. They lack the financial resources needed to enhance their innovation capabilities and the necessary resources to offer customers comprehensive services.

　　Second point: The issue of quality and stability. Electronic gases—especially high-purity electronic gases—are critical factors that influence the reliability and yield of electronic devices. With the rapid advancement of electronic information technology, the demand for purity in electronic gases is steadily increasing, often requiring purities at or above the 6N level (99.9999% or higher). Consequently, the requirements for the stability of electronic gas quality are becoming increasingly stringent. To illustrate this point, consider that once an electronic gas product has been validated through the integrated circuit manufacturing process, its specified purity and quality standards become firmly established. Chip manufacturers are reluctant to see any changes in product quality—even further improvements in purity could potentially introduce unforeseen issues. Therefore, any changes made during the production process of electronic materials—including switching raw material suppliers or modifying production processes—must be promptly notified to chip manufacturers, who will then decide, based on the specific circumstances, whether to re-validate the product. Domestic enterprises producing electronic gases have experienced multiple quality incidents, which have undermined chip manufacturers’ confidence in locally produced electronic products.

　　Third point: The packaging, storage, and transportation of domestic electronic gas products have failed to align with the requirements of the modern electronics industry. In order to cut costs and compete on price, companies have lowered standards in packaging and logistics, leading to various problems.

　　To promote innovation and industrialization capabilities in China’s domestic electronic gas industry, the National “02” Special Project launched the “R&D and Industrialization of High-Purity Electronic Gases” initiative in 2013. This project aims to develop key high-purity electronic gases for IC manufacturing and enhance the self-sufficiency rate of China’s domestic electronic gas market. Six institutions, including the 718th Research Institute of China Shipbuilding Industry Corporation and Jiangsu Nanda Optoelectronic Materials Co., Ltd., are jointly undertaking this project. The R&D and industrialization efforts cover 19 types of electronic gas products, including nitrogen trifluoride, tungsten hexafluoride, high-purity phosphine, and high-purity arsine.

　　Despite the support provided by the “02 Special Project,” truly achieving large-scale localization of electronic gases and breaking free from dependence on imported materials remains a daunting challenge. On one hand, electronic gas companies must, while respecting the principles of the market economy, carry out mergers and restructuring to reduce wasteful competition and redundant investments, optimize resource utilization, and enhance their innovative capabilities. Companies must also update their business philosophies, adopt advanced quality management systems such as Six Sigma, hire application engineers who understand the process flows of electronic industries like IC manufacturing, and provide comprehensive support and all-around services. On the other hand, the state should actively guide mergers and restructuring through financial incentives and tax policies, helping strong enterprises grow even stronger and enabling weaker enterprises—or those with poor management capabilities—to either merge into stronger companies or naturally exit the market. Moreover, through policy incentives, the state should fully encourage social capital to participate in the development of the electronic gas industry, assisting enterprises in growing bigger and stronger. We are confident that within the next 5 to 10 years, China will have one or two large-scale electronic gas material enterprises—domestically and internationally renowned brands—that offer comprehensive, specialized, and integrated products and services.

　　As one of the implementing units of the national “02 Special Project”—“R&D and Industrialization of High-Purity Electronic Gases”—Jiangsu Nanda Optoelectronic Materials Co., Ltd. has acquired 133 mu of land in Quanjiao County, Chuzhou City, Anhui Province, and established a wholly-owned subsidiary named Quanjiao Nanda Optoelectronic Materials Co., Ltd. The company is dedicated to developing specialty electronic gases such as high-purity phosphine and arsine. Building on this foundation, the People’s Government of Quanjiao County, Chuzhou City, Anhui Province, has designated over 2,000 mu of land for the planned construction of the Quanjiao County New Electronic Materials Industrial Park. We look forward to seeing domestic entrepreneurs, together with the national and local governments, join forces and work collaboratively on this site to jointly develop China’s electronic gases and other new electronic materials. This effort will help achieve large-scale localization of China’s electronic gases and other new electronic materials, enabling China to break free from its long-term reliance on foreign imports in the electronics industry and overcome the blockade imposed by foreign countries on critical electronic materials in China’s defense, military-industrial, aerospace, and aviation sectors.