Shenzhen Lianchengfa Technology Co., Ltd.

The semiconductor industry is currently in a high economic cycle, and lack of cores and tight production capacity have become the key words in the past year.

Recently, a reporter from China Business News learned from Merck, an international semiconductor material giant, that it has launched the "Investment China Multiplication Plan", focusing on the field of chip manufacturing, and will invest at least 1 billion yuan (about 1.3 billion yuan) in China by 2025. 100 million euros) to build and expand a series of localized production, R&D and supply chain facilities for electronic materials.

"The current global semiconductor industry is entering a super cycle. With unprecedented capacity investment and expansion, China is also emerging as the world's fastest-growing integrated circuit manufacturing market." Merck Executive Board Member and CEO of Electronic Technology Business Said Kai Beckmann.

Bi Kangming also said that the biggest bottleneck in the entire semiconductor industry at present is insufficient production capacity, and it is a common problem in the industry that it is difficult to accurately predict short-term demand. Under such circumstances, why does Merck have to invest at least 1 billion yuan in China? What impact will this operation bring to China's local semiconductor material manufacturers?

Why an additional investment of over 1 billion yuan?

The reporter noticed that of Merck's investment of at least 1 billion yuan, 60% will be used to build a localized production base for electronic materials, 20% will be used to build a high-resilience localized supply chain of electronic materials, and 20% will be used to build a high-end electronic material. Local R&D and application of high-quality electronic materials.

It is reported that Merck has invested more than 1 billion yuan in China in the field of electronic materials in the past 10 years, mainly in the fields of display materials and technologies such as liquid crystal. At present, Merck has 3 high-tech manufacturing plants in Shanghai Jinqiao, Shanghai Waigaoqiao and Suzhou, and has long-term supplied more than 150 kinds of high-purity chemicals, electronic special gases and characteristic materials to more than 100 chip manufacturers in mainland China .

According to SEMI (International Semiconductor Industry Association) statistics, in 2020, mainland China has surpassed South Korea to become the second largest semiconductor material market in the world. According to data from ICMtia (Integrated Circuit Materials Industry Technology Innovation Alliance) and SEMI, the market size of China's wafer manufacturing materials in 2021 will be about 58.5 billion yuan, and the market size of packaging materials will be about 38.4 billion yuan.

"China is the world's largest chip consumer market and the largest chip importer. More than half of the world's total chip production goes to China every year." Bi Kangming said that China's semiconductor industry and the entire electronic information industry are in a golden opportunity for development Expect.

It is worth mentioning that the rapid development of China's display industry in the past 10 years has surprised Merck. Allan Gabor, President of Merck China and Managing Director of Electronic Technology Business, said frankly: "From our point of view, the development of China's display industry has been too fast in the past 10 years; All sales revenue comes from the Chinese market.”

"No one expected that display companies like BOE and TCL Huaxing would develop into global display panel giants within 10 years." An Gaobo further said, "We expect similar semiconductors to emerge in China in the next 10 years. To be a leader in manufacturing, Merck is willing to grow with Chinese companies in the process."

The reporter noticed that in addition to wanting to take the express train of China's semiconductor industry, Merck's additional investment in China is also out of consideration for stabilizing its own supply chain.

Dr. Chen Tianniu, general manager of Merck China Semiconductor Materials Division, told reporters that although the industry is in a high economic cycle, it is necessary to pay attention to the potential bubbles in it, and blind expansion of production is not advisable, especially for upstream companies in the semiconductor industry.

"From the perspective of material supply, (additional investment) is not about unlimited capacity expansion, but more about investing in building a more resilient material supply system, which can be stable in the future whether production capacity rises or falls. Material supply." Bi Kangming said that Merck has set up a venture capital fund internally to invest in start-ups in the semiconductor material ecological chain, and will also cooperate more with local Chinese companies in the future.

In addition, the "Merck Electronic Technology China Center" under construction in Shanghai is expected to be completed and put into use in the summer of 2022. It is understood that after the completion of the center, it will mainly conduct analysis, testing and sampling of various semiconductor and display materials, which means that local semiconductor companies and display panel manufacturers in China can enjoy Merck’s faster and more comprehensive technical services, and more customized material solutions.

How should the 1 billion yuan investment be used? In this regard, Merck said: "One is to build a localized production base for electronic materials with relatively high technology content in China by increasing investment, and the other is to build a highly resilient local supply chain for electronic materials in China, including warehousing. , logistics and a series of facilities, and the third is to build a high-level center for local R&D and application of electronic materials.”

Influence geometry?

According to public information, Merck, the bank's biopharmaceutical company, has become an electronic material supplier with one of the broadest and most complete material product lines in the global semiconductor manufacturing industry through a series of mergers and acquisitions and its product portfolio fully covers wafers. The six key steps of the processing process - doping, patterning, deposition, planarization, etching, cleaning, and post-package testing; at the same time, Merck also customizes the supply system of special chemicals and gases for the fab, and Can provide on-site service and equipment management.

Wang Lifu, a research analyst at the semiconductor research institution Xinmou, told reporters that Merck's semiconductor materials business and technology mainly stem from the acquired AZ Electronic Materials (hereinafter referred to as "AZ"). According to reports, Merck announced in December 2013 that it would acquire AZ, a Luxembourg-based specialty chemical manufacturer, in a £1.6 billion all-cash deal. AZ mainly produces high-purity chemical materials for the electronics industry, and 68% of AZ's business is focused on manufacturing semiconductors. Chemicals used in industry, and another 30% of the business involves the manufacture of chemicals used in flat panel displays.

Wang Lifu said that the semiconductor material industry has to rely on acquisitions to become bigger and bigger, and the accumulation speed is too slow. "Merckqiang has a complete range of products in AZ, including special gases, precursors, wet chemicals, and photoresists. It's hard to cover all these segments."

Although mainland China has become the world's second largest semiconductor material market, there is a big gap between Chinese domestic semiconductor material companies and international manufacturers. Wang Lifu pointed out that, taking photoresist as an example, the front-end products of large factories like SMIC are all foreign ones.

"In general, the gap between domestic and foreign semiconductor materials is basically larger than the gap between semiconductor manufacturing." Wang Lifu said that the gap in semiconductor materials depends on the specific materials, "the upstream of electronic materials are those raw materials, such as hydrochloric acid, silicon Powder, basically has no technological attributes, anyone can produce it, not the semiconductor industry. For example, TEOS (tetraethyl orthosilicate) began to set the national standard for electronic grades two years ago, and it is still in the process. This material There is a gap."

As mentioned above, Merck will use at least 20% of its additional investment of 1 billion yuan in China to build a highly resilient localized supply chain of electronic materials. What impact will this have on Chinese related companies?

In this regard, Chen Tianniu said that the semiconductor industry is a highly globalized industry and cannot be developed by a single company or country. He suggested that Chinese local semiconductor material companies should not be in a hurry to expand their products, but it is important to focus on launching a few popular products in certain specific fields.

"Many semiconductor materials have certain customized properties. For example, the same photoresist can be used in different factories, and photoresist manufacturers will also make subtle adjustments to adapt to the machine." Wang Lifu pointed out that Merck's additional investment in China is important for China. It is a catfish that will train some talents in semiconductor materials, but the most important material formula will probably be kept strictly confidential to prevent leakage.