Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

According to the statistics of the market research institute SEMI, in 2020, mainland China will become the world’s largest semiconductor equipment regional market for the first time, with an annual increase of 39% in sales, reaching US$18.72 billion; Taiwan, China ranks second, and equipment manufacturers will have sales in Taiwan in 2020. Reached 17.15 billion US dollars; South Korea ranked third, sales increased by 61% to 16.08 billion US dollars; Japan ranked fourth, with sales of 7.58 billion US dollars. East Asia has become the height of the global semiconductor arms race, with a total of 59.53 billion US dollars in 2020, accounting for 83.6% of the total global semiconductor equipment expenditure (71.2 billion US dollars) that year.

Due to the intensified impact of geopolitics on the semiconductor supply chain, the competition for investment in semiconductor production capacity in various regional markets will intensify in 2021. Both TSMC and Samsung have adjusted their capital expenditure plans on semiconductors to more than $30 billion in 2021. The two are desperately fighting for the progress of advanced process mass production. Both expect mass production of 3-nanometer process in 2022. , TSMC and Samsung will also go to the United States to set up factories. There is no doubt that 2021 will be another harvest year for semiconductor equipment manufacturers, and due to relevant restrictions, mainland China cannot purchase equipment such as high-end EUV lithography machines, and it may be difficult to hold the throne of the largest equipment market.

From the perspective of the Taiwan Institute of Industrial Technology (hereinafter referred to as the Taiwan Institute of Industrial Technology), different regional markets have different development goals for the semiconductor industry: as the world’s largest semiconductor application market, mainland China, under the background of threats to supply chain security, undoubtedly hopes to speed up Technological catch-up to alleviate the current situation of being controlled by people in key links such as manufacturing, equipment and materials; and the United States, as the leader of the global semiconductor industry chain, will continue to strengthen the export control of high-end chip manufacturing equipment to mainland China, and the United States will also introduce new policies In order to cope with the decline of wafer manufacturing capacity in the United States in recent years; as the two regions with the highest wafer manufacturing density in the world, Taiwan and South Korea will hopefully continue to lead the development trend of wafer manufacturing processes, and these two regions will also rely on strong Manufacturing capacity, improving upstream material and equipment autonomy.

Development direction of advanced technology

After 28 nanometers, the Planar transistor process reaches its limit, and FinFET (fin transistor) continues Moore’s law and pushes the process node to the current 10 nanometers. However, the FinFET route is also approaching its limit. Samsung will take the lead in adopting the GAA (full surround gate) structure on the 3nm process, while TSMC will continue the FinFET structure at the 3nm node, and then adopt the GAA structure at the 2nm node. Taiwan Industrial Research Institute believes that Intel has encountered troubles in wafer manufacturing, and the 7-nanometer process (note: the three companies have different definitions of process size, it is not suitable for direct comparison with numbers) or will be delayed until 2023. The 5nm node will also be changed to GAA architecture.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Source: Taiwan Institute of Industrial Technology

GAA stands for Gate-All-Around, which is a surround gate technology transistor, also called GAAFET. Its concept was put forward very early, and Dr. Cor Claeys of Belgian IMEC and his research team put forward in their article in 1990. GAAFET is equivalent to an improved version of 3D FinFET. The transistor structure under this technology has changed again. The gate and drain are no longer like fins, but become “little sticks” that pass vertically through the gate. In this way, the gate can realize the four-sided wrapping of the source and drain.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Source: Taiwan Institute of Industrial Technology

Compared with FinFET, the original source-drain semiconductor is a fin (Fin), and now the gate becomes a fin. So GAAFET and 3D FinFET have many similarities in implementation principles and ideas – which is a great advantage for fabs. From the three-contact surface to the four-contact surface, and it is also divided into several four-contact surfaces, it is obvious that the control force of the gate on the current is further improved.

Compared with the FinFET process, the GAA structure has a larger gate contact area, which improves the transistor’s ability to control the conduction channel, and significantly improves parasitic parameters such as capacitance, so it can reduce the operating Voltage, reduce leakage current, and reduce power consumption and operation. temperature, which is conducive to improving the degree of integration to continue Moore’s Law.

Since the production process required for the new structure is similar to that of fin transistors, the key process steps are almost the same, and existing equipment and technical achievements can continue to be used. For TSMC and Samsung, this is undoubtedly the cheapest technology route replacement solution. However, GAA’s requirements for processing accuracy are further improved, and it requires area selective deposition technology and atomic-level processing capabilities. Therefore, the importance of materials engineering will increase, and it will also drive more business opportunities for deposition and etching equipment.

The semiconductor front-end equipment market controlled by the five giants

Although more than 80% of the world’s equipment will be sold to East Asia in 2020, except for Japan, China (mainland plus Taiwan) and South Korea have little influence in the equipment industry. The world’s top five semiconductor front-end (ie wafer manufacturing, packaging as the back-end) equipment manufacturers Applied Materials (AMAT), ASML (ASML), Lam (Lam), Tokyo Electronics (TEL) and Kelei (KLA) occupy The market share exceeds 70%, of which only Tokyo Electronics is headquartered in East Asia, and the rest are American and European companies.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Source: Taiwan Institute of Industrial Technology

Specifically, Applied Materials ranks first. Its 2020 revenue is $17.2 billion, of which the semiconductor business accounts for about 70%. Applied Materials has a very wide distribution in semiconductor equipment, of which PVD (thin film deposition) equipment accounts for 38% of the world, CMP (grinding and polishing) equipment accounts for 70%, etching equipment accounts for 15%, and ion implanters account for 67%.

ASML ranked second, with revenue of 13.98 billion euros in 2020. ASML is a major manufacturer of lithography machines, and is currently the only supplier in the world for EUV (extreme ultraviolet) lithography machines. Thanks to the pursuit of advanced technology by TSMC, Samsung and Intel, ASML will sell 31% of its sales in 2020. 31 EUV lithography machines alone account for 32% of its total revenue. At present, ASML is working with supply chain partners to jointly develop and promote finer lithography processing technology. For example, in 2020, multiple electron beam inspection scanning systems will be launched, and the interference between electron beams and electron beams will be limited to less than 2%. Processes above the 5nm node. ASML has also cooperated with Pan-Lin and imec to develop dry photoresist technology to improve EUV resolution and reduce the amount of photoresist. And cooperate with Lasertec to develop a new generation of EUV mask inspection technology to reduce costs, and cooperate with TSMC to develop a new generation of EUV mask cleaning technology to reduce costs.

Tokyo Electron’s equipment sales in 2020 were US$10.37 billion, ranking third. The market share of Tokyo Electron’s glue coating and developing equipment accounts for 91% of the global market share, of which EUV glue coating and developing machines occupy the entire market share exclusively, etching machines account for 25% of the global market, deposition equipment 37%, and cleaning equipment 27%. From 2020 to 2022, Tokyo Electronics plans to invest 400 billion yen in research and development funds, focusing on technologies such as selective deposition, intelligent etching, and supercritical fluid cleaning.

Fanlin Semiconductor’s revenue in 2020 was US$10.05 billion, ranking fourth. Fanlin is the global leader in etching equipment, with memory manufacturing business accounting for 57% and logic process accounting for 43%. It is the only company among the top five equipment manufacturers with memory business accounting for over 50%. As mentioned earlier, Pan-Lin and ASML are developing EUV dry photoresist technology with imec.

Kelei Semiconductor’s revenue in 2020 was US$5.81 billion, ranking fifth. Kelei is the world leader in wafer inspection equipment, with a market share of more than 50%. Ke Lei has also invested in stress deformation measurement and multi-beam detection, and has also invested in the development of electron beam defect measurement technology for structures smaller than 5 nanometers.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Source: Taiwan Institute of Industrial Technology

According to the estimates of the Taiwan Industrial Research Institute, the global key semiconductor equipment will grow very well in the next few years. Except for DUV (deep ultraviolet) lithography equipment, the rest of the equipment will show a positive growth trend. Among them, ALD (atomic layer deposition) has the highest growth rate. It is expected that the average annual growth rate will reach 26.3% from 2020 to 2025. The EUV equipment growth rate ranks second, and the average annual growth rate will also reach double digits. In terms of amount, EUV equipment takes the lead. It is expected that the sales of EUV equipment will reach US$12.55 billion in 2025, surpassing the etching machine and becoming the semiconductor equipment with the highest sales in each subdivision.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Source: Taiwan Institute of Industrial Technology

Chinese equipment manufacturers have a long way to go

Compared with international manufacturers, there is a big gap between Chinese equipment manufacturers in terms of sales scale and technology. According to the data of the Electronic Special Equipment Industry Association, the sales of domestic semiconductor equipment in 2019 was 16.182 billion yuan, only about half of the revenue of the top five gatekeepers in 2019 (4.6 billion US dollars). The association estimated in October 2020, In 2020, the total sales of domestic semiconductor equipment will reach 21.3 billion yuan, which is still less than 60% of that of Kelei ($5.8 billion).

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Comparison of major semiconductor equipment companies at home and abroad (as of January 6, 2021)

Source: Debon Securities

Technically, my country’s semiconductor equipment has basically not participated in the research and development stage of advanced processes (3 nanometers and below), and currently it cannot support quasi-mainstream processes such as 28 nanometers to achieve national production. Most domestic equipment manufacturers can now commercialize products. It is still mainly based on mature process production lines. Taking the lithography machine with high social attention as an example, the main domestic company is Shanghai Microelectronics Equipment Co., Ltd. (“Shanghai Microelectronics”), and the mainstream products of Shanghai Microelectronics can only meet the lithography process of 90 nanometers and 110 nanometers. process requirements.

But there are also some fields that have already participated in the advanced technology competition. For example, China Microelectronics has been recognized by TSMC in the field of CCP etching and entered its 7nm/5nm production line; North Huachuang is relatively good in ICP etching equipment, and etching equipment above 28nm has been industrialized. In terms of advanced manufacturing process, silicon etching equipment has broken through 14nm technology and entered the Shanghai IC R&D Center.

According to the “Made in China 2025” goal, the core basic components and key basic materials of semiconductors should achieve a 40% autonomy rate in 2020, and a 70% localization rate in 2025. However, according to the public bidding information of ten domestic wafer manufacturing companies such as Yangtze Memory and Huali Microelectronics from 2017 to the first quarter of 2021, the localization rate is still far from the target. From 2017 to 2019, these ten fabs opened bids for a total of 4,197 sets of equipment, of which 431 sets were made in China, and the localization rate was about 10.3%; while from 2020 to the first quarter of 2021, these ten fabs opened bids for a total of 1,862 sets of equipment Equipment, of which 315 are domestically produced equipment, and the current localization rate is estimated to be 17%, an increase of more than 6 percentage points from 2017 to 2019.

Semiconductor front-end equipment market: five giants control, Chinese manufacturers have a long way to go

Left: Localization rate of top ten fab equipment in 2017-2019

Right: Localization rate of top ten fab equipment in the first quarter of 2020-2021

Source: Debon Securities

But domestic semiconductor equipment has also shown very positive changes in the past few years. In terms of technology, companies led by China Micro Semiconductor, North Huachuang and Yitang Semiconductor have approached world-class manufacturers in the fields of etching, deposition, dry debonding, cleaning, and ion implantation. In terms of market share, the market share of some products has exceeded 20%, which has launched a strong impact on the market position of international semiconductor equipment manufacturers.

It can be seen from the bidding information announced by the top ten fabs that from 2017 to the first quarter of 2021, the localization rate of dry degumming equipment reached 45.5%, while cleaning equipment (30.6%) and etching equipment (22.2%), polishing equipment (21.6%) localization rates were higher than 20%, furnace tube equipment (14.7%) and glue developing equipment (10.0%) were higher than 10%, The localization rate of deposition equipment (8.5%) and front-end inspection equipment (5.2%) is relatively low, only between 5% and 10%, and the largest gap is the ion implanter (2.4%). , Back-channel test equipment (1.9%) and lithography machine (1.6%).

After entering 2020, the localization rate will increase faster. Judging from the bid opening data of the top ten fabs, in the first quarter of 2020 to 2021, the localization rate of polishing equipment, etching equipment, furnace tube equipment and glue developing equipment increased by more than two places compared with the localization rate of the 2017-2019 stage number.

From the perspective of the development trend of the global semiconductor equipment industry, as the semiconductor process approaches the physical limit, it becomes more and more difficult to develop a new generation of equipment. Taking the EUV lithography machine as an example, the project was established as early as the 1990s, and nearly 200 research institutions in more than 40 countries around the world (more than 100 in Europe) participated in it, from basic research, technical research to system integration, The entire R&D system has invested more than 100 billion yuan, exceeding the total revenue of my country’s equipment industry in the past ten years.

In an interview with the media, Yin Zhiyao, chairman of China Micro Semiconductor, also said that semiconductors have entered the level of atomic-level processing. Manufacturing semiconductor devices at this precision requires the collection of knowledge and technologies from more than 50 disciplines. He pointed out that plasma etching has carved pores with a diameter of one thousandth to one ten thousandth of a human hair, and the accuracy, uniformity and repeatability of the hole diameter can reach tens of thousands to ten thousandths of the diameter of a human hair. One in ten thousand. An etching machine processes more than one million trillion thin and deep contact holes every year, and almost 100% of the holes are fully opened.

Semiconductor equipment not only needs to be able to achieve very fine processing, the most important thing is uniformity, stability, repeatability, reliability and cleanliness. Only by doing these can we meet the core requirement of wafer manufacturing, the chip pass rate. To ensure an acceptable pass rate (such as 90%), it is required to have a very high pass rate in each processing and manufacturing process, because the current advanced process chip requires 1000 process steps, if the pass rate of each step is 99.9%, Then the final pass rate after 1000 steps is only 36.77%.

As a representative of modern intelligent manufacturing and the underlying support of the global information industry, chip manufacturing seldom gives new equipment manufacturers a chance for trial and error. After a lot of hard work, the prototype has only completed a small part of the development and production equipment. It is the more difficult part to convince the wafer manufacturers to take the risk of reducing the pass rate and production capacity to help the test run. Yin Zhiyao said that after the prototype is made, Customers are willing to cooperate, and they must pass at least more than 80 rigorous testing items before they can finally meet the requirements of the fab.

Judging from the historical experience of the development of international manufacturers, the equipment industry must stand firm in the market and must not make any rash advances. It must make long-term R&D investment and consolidate the technical foundation. As Yin Zhiyao said, semiconductor equipment requires 50 disciplines to collaborate, which is no less difficult than two bombs and one satellite. “Maglev molecular pump, one of the key core components of the semiconductor industry, can only be done by two or three companies in the world, and every thing requires long-term technical accumulation.”

Thanks to globalization, the semiconductor industry has developed to its current scale, but since the Trump administration came to power, the United States has used the semiconductor industry as a weapon to launch a technological war against China, which has seriously affected the supply chain previously established by the global electronic information industry. mutual trust mechanism. As the world’s most important electronic information industry manufacturing base, it is crucial to create a new semiconductor supply chain that is not affected by geopolitics, and whenever a technology truly achieves a real market breakthrough (for example, the market share reaches 20%), “Watts” The corresponding restriction items in the Senna Agreement also lose their meaning. At present, whether the localization rate of equipment can be effectively improved has become a key factor for the healthy development of the global electronic information industry. China’s rapid expansion in wafer manufacturing has provided a broad market space and trial and error opportunities for domestic semiconductor equipment manufacturers. For domestic semiconductor equipment manufacturers, this is an excellent historical opportunity.

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