Semiconductor etching equipment: multi-frequency resonance driven etching market domestic alternative to the future [Oriental Securities]

Etching is a process of selective etching or exfoliation of the substrate surface or the covered film on the substrate surface by chemical or physical methods. At present, dry etching occupies an absolute mainstream position in semiconductor etching, accounting for more than 90% of the market. At the same time, plasma etching is the main etching method used in wafer fabrication. Capacitive plasma etching (CCP) and inductive plasma etching (ICP) are two commonly used plasma etching methods. With the continuous development of integrated circuit technology, the size of the core devices that make up the chip continues to shrink, and the processing and manufacture of the chip is becoming more and more elaborate. Atomic layer etching (ALE) can accurately control the etching depth, which will become the trend of technology upgrading in the future.

As the backbone of semiconductor equipment, etching equipment is expected to take the lead in completing domestic substitution. Semiconductor equipment is mainly used in semiconductor manufacturing and closed testing process, which is the foundation and core of the semiconductor industry. With the miniaturization of the semiconductor process and the complexity of the structure, the types and technical difficulties of semiconductor etching equipment are increasing. From the perspective of the domestic market, the etching machine, especially the medium etching machine, is the most advantageous field of semiconductor equipment in China, and it is also one of the most important semiconductor equipment with the highest proportion of domestic substitutes. At present, the representative companies of etching equipment manufacturers in China are China Micro Corporation, North Huachuang and so on.

Terminal demand for catalytic etching equipment consumption, the market size is expected to exceed 110 billion US dollars in 2022. With the development of 5G, big data, Internet of things, artificial intelligence and other emerging industries, semiconductor equipment is expected to usher in a new round of development opportunities, thus promoting the global demand for etching equipment. SEMI expects the global semiconductor equipment market to continue to grow, growing 45 per cent to $103 billion in 2021 and reaching a new high of $114 billion in 2022.

Advanced technology increases the etching steps and difficulty, and the quantity and price of etching equipment increases. For logic circuits, process miniaturization and technical iteration increase the etching steps and increase the difficulty of etching; for 3DNAND, a higher number of stacking layers requires multi-step etching, and to ensure the anisotropy of etching and as little deviation as possible; for DRAM, the circuit pattern density increases and the number of multiple pattern repetitions increases, which greatly increases the equipment requirements of the etching process. Advanced processes and complex structures increase the steps and difficulty of etching, which contributes to the increase in the price of semiconductor etching equipment.

The field of etching equipment has been monopolized by overseas leaders for a long time, and some of the technologies of domestic etching enterprises have reached the international first-class level. According to Gartner statistics, the top three global etching companies are Pan Lin Semiconductor, Tokyo Electronics and Applied Materials, with a total global market share of 91%. Domestic etching equipment manufacturers have a total market share of less than 2% in the global etching equipment market. However, in recent years, domestic etching manufacturers rely on capital and policy support to catch up all the way, with remarkable results. For example, the medium etching of China Micro Corporation has entered the TSMC 7nm/5nm production line, and it is the only domestic etching equipment manufacturer to enter the TSMC production line. Judging from the bidding situation of wafer factories, the construction of new production capacity of domestic wafer factories continues to increase, and the share of domestic semiconductor etching equipment manufacturers such as China Micro Corporation and Northern Huachuang has further increased. With the domestic etching leader closely following the development of advanced processes, increasing R & D investment, active mergers and acquisitions and integration, the overall domestic etching equipment is expected to accelerate the completion of domestic replacement.

We are optimistic that etching equipment, as the backbone of semiconductor equipment, will deeply benefit from the high bearing of downstream semiconductor industry and terminal applications, while the proportion of domestic alternatives is expected to be further improved. it is recommended to pay attention to the integrated circuit equipment leading company Micro Corporation, the domestic semiconductor equipment leader North Huachuang.

Risk hint

Downstream demand is lower than expected, technological breakthroughs are not as expected, and import restrictions on upstream core components.