Sourcing Center: Semicon materials hub emerges in Greater Bay Area

China's key electronic information industry hub, the region around the Pearl River Delta officially designated the Greater Bay Area is also its largest semiconductor production base, with key sites in Shenzhen, Guangzhou, Zhuhai, and the special administrative regions of Hong Kong and Macau. Its aggregate portion of China's shipments in this category is 60 percent, equivalent to the country's overall worldwide share, according to Sohu News.

In October 2018, a year after Xi Jinping first mentioned the development of the Greater Bay Area in one of his addresses, the Semiconductor Industry Alliance was established in Guangzhou. Its goal is to build a platform for Chinese upstream and downstream manufacturers to improve their competitiveness at home and abroad.

Since then, several production bases have sprung up. There is Shenzhen's Pingshan district that now has more than 50 semiconductor enterprises, including SMIC and BYD. In the Pingshan High Tech Zone, which has a total area of 5.09sqkm, eight third-generation companies form a comprehensive supply chain of materials, equipment, design, fabrication, package and testing. As many as 40 suppliers, meanwhile, are based in the Hengqin district of Zhuhai.

The Greater Bay Area initiative also included encouraging cooperation among research institutes, universities and domestic manufacturers. This led to the establishment of the National Semiconductor Research Innovation Center in Macau in 2019. Total investment in this venture was $2.94 billion and involved the Institute of Microelectronics of the Chinese Academy of Science, Douqi International Investment Group and He Xin Tech.

Burgeoning base

The nascent semiconductor industry in the Greater Bay Area is set to drive the development of the materials sector as new investments continue to come in.

Guangzhou CanSemi is in the process of completing its second-phase project, which is expected to start mass production by the end of 2021. The company's foray into the wafer category began in 2019, when it spent $1.98 billion on a first-phase facility with an area of 140,000sqm and a monthly capacity for 40,000 12in wafers.

Although industry momentum was interrupted by factory shutdowns due to the pandemic in early 2020, China's manufacturing segment for semiconductor materials has regained its footing.

China grabs second place

Globally, the market for semiconductor materials increased in revenue to $55.3 billion in 2020, nearly 5 percent YoY, according to SEMI's Materials Market Data Subscription released in March 2021.

SEMI's report records a sterling performance from China in this segment, which through "aggressive capacity build-up" enabled it to overtake South Korea and rank second in market size.

Government support came by way of a State Council policy framework that identified advanced semiconductor packaging solutions as a priority for China's semiconductor industry, according to Market Watch's 2021 to 2024 semiconductor materials report.

In sales, China enjoyed 10 percent annual growth in 2020, according to suppliers interviewed by Global Sources Electronic Components. They are confident this will be maintained in the next two years.

Overall, the Greater Bay Area has an estimated share of 30 to 40 percent of China's total sales. Companies based in the region include major wafer suppliers such as SMIC, Guangzhou CanSemi and Tsinghua Unigroup, and key manufacturers of other semiconductor materials, including Capchem and Huate Gas.

Into the next decade

Wafers lord over the semiconductor materials market worldwide, with a share of up to 40 percent, according to SEMI.

Based on materials, this category includes first-generation silicon and germanium, second-generation GaAs and InP and third-generation GaN and SiC wafers. The last two are expected to rack up a combined value of $5 billion by the end of 2029, realizing double-digit annual growth from $875 million in 2020, according to Omdia.

Semicon materials out of GBA

The main products offered by manufacturers in the Greater Bay Area are categorized into wafer and packaging materials. These include wafers, polishing materials used in chemical mechanical planarization (CMP), photoresists and high-purity chemicals. The first kind accounts for more than half of sales value.

To advance the category, Chinese manufacturers have been pursuing R&D based on third-generation materials. In fact, the Third Generation Semiconductor Research Institute was set up in Shenzhen in 2018 to promote this endeavor.

One of the breakthroughs is a production technique developed by BYD Research Institute, yielding 4in SiC wafers that are widely used in IGBTs and MOSFETs. BYD's next plan is to release SiC IGBT chips in one or two years.

For the majority, the typical output consists of 6 and 8in wafers. This will expand to include 12in variants soon, as construction of fabs for this size is seeing rising investment.

In addition to Guangzhou CanSemi, SMIC is building a 12in wafer fab. It has allocated $1.617 billion for the project. The first to adopt the 55nm/40nm process in the Greater Bay Area, the facility will churn out 40,000 units every month once operational in 2022.

Dongguan South China Tiger Industrial Co. Ltd

Year established: 2011 Head office location: Dongguan, Guangdong Key export products: Semiconductor materials Export ratio: 70% Main export markets: Europe, North America, Asia

Model: 2017-06-03-002 MOQ: 200 sets Delivery: 3 days Description: IC packaging material, carrier tape; PS, PC, paper, others; 8 to 104mm width; white, black or transparent; custom thickness & shape accepted

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Noble Crystal Ltd

Year established: 1998 Head office location: Hong Kong SAR Key export products: Semiconductor materials Annual export sales: $2.5mn Export ratio: 90% Main export markets: Europe, North America, Asia

Model: NCL MOQ: 1,000 units Delivery: 5 days Description: 3in monocrystalline silicon wafer; 15 to 1,000ohm-cm resistivity; custom thickness tolerance accepted

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Shenzhen Dowell Adhesive Products Co. Ltd

Year established: 2005 Head office location: Shenzhen, Guangdong Key export products: Semiconductor materials Export ratio: 80% Main export markets: North America, Europe, Asia

Model: DL-300 MOQ: 50sqm Delivery: 7 days Description: Protective film; PE; 0.02 to 0.2mm thickness; RoHS

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Shenzhen Jia Ri Feng Tai Electronic Technology Co. Ltd

Year established: 2014 Head office location: Shenzhen, Guangdong Key export products: Semiconductor materials Export ratio: 40% Main export markets: Europe, US, Asia

Model: BM180 MOQ: 1 unit Delivery: 3 days Description: Thermal conductive insulator silicon rubber sheet; 0.18mm thickness, 0.02±0.01mm tolerance; gray; 2W/mK thermal conductivity; 18kg/sqcm tensile strength; UL94V-0-1 flammability rating

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