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Frost & Sullivan, in collaboration with LeadLeo Research Institute, released the 'Research Report on China's Wafer Inspection Equipment Industry'.
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Overview of China's Wafer Testing Equipment Industry
Semiconductor equipment can be divided into two main categories: front-end equipment (wafer manufacturing) and back-end equipment (packaging and testing). Front-end equipment involves processes such as silicon wafer processing, lithography, etching, ion implantation, thin film deposition, cleaning, polishing, metallization, etc. The core specialized equipment corresponding to these processes includes silicon wafer processing equipment, lithography equipment, etching equipment, cleaning equipment, ion implantation equipment, thin film deposition equipment, mechanical polishing equipment, etc. Back-end equipment includes packaging equipment and testing equipment, and advanced back-end packaging processes also utilize some front-end equipment. Semiconductor process control (quantity/Testing) equipment is one of the core devices in the integrated circuit production process, running through the entire production cycle and being key to ensuring the yield of high-quality chips.
In terms of technology, volume/Testing equipment can be divided into two major categories: inspection and metrology. Inspection refers to the process of detecting whether there are any heterogeneous conditions on the wafer surface or circuit structure, such as particle contamination, surface scratches, open-circuits, and short circuits, which are characteristic structural defects that have an adverse impact on chip processing performance. Metrology involves quantifying the structural dimensions and material characteristics of the observed wafer circuits, such as the measurement of physical parameters like film thickness, critical dimensions, etching depth, and surface morphology; from a process perspective, semiconductor inspection can be divided into front-end inspection, back-end inspection, and laboratory testing. Among them, front-end metrology is mainly applied in the wafer processing stage and is currently mainly based on in-line monitoring of factory production lines. Back-end inspection is mainly used for chip electrical and functional testing after wafer processing, and is currently mainly based on in-line monitoring of factory production lines and third-party testing. Laboratory testing is primarily aimed at defect localization and failure analysis for effective samples, mainly conducted by third-party laboratories and self-built factories; from a technical principle perspective, metrology mainly includes optical inspection technology, electron beam inspection technology, and X-ray metrology technology, among which optical inspection has a fast speed and is contactless, making it the main current inspection technology.
Looking at capital expenditure of wafer fabs,20%-30% is used for factory building, and 70%-80% for equipment investment. The investment in front-end equipment (wafer manufacturing) accounts for about 80% of semiconductor equipment investment, with packaging and testing equipment accounting for about 10% and 8% respectively. In global wafer manufacturing equipment in 2022, the value of lithography equipment, etching equipment, and thin film deposition equipment accounted for 22%, 21%, and 21% respectively, while the value of metrology/inspection equipment accounted for about 11%, significantly higher than that of equipment in sub-sectors such as cleaning, CMP, coating and development, ion implantation, etc.
The localization rate of semiconductor equipment in the Chinese mainland has been steadily increasing, with improvements in etching equipment, thin-film deposition equipment, cleaning equipment,The localization rate of CMP polishing equipment is between 10% and 30%, while that of thermal treatment equipment ranges from 30% to 40%; the localization rate of glue removal machines has reached 90%. However, the localization rates of metering/detection equipment, ion implantation equipment, and coating and developing equipment are still low, below 5%; the localization rate of lithography equipment is less than 1%, indicating a large space for domestic substitution.
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China's wafer inspection equipment industry chain
The upstream of the wafer inspection equipment industry chain consists of component manufacturers, including motion and control, optical, and machining parts manufacturers; the midstream includes wafer inspection equipment manufacturers; and the downstream includes wafer manufacturing manufacturers.
The business model of domestic wafer inspection equipment manufacturers involves purchasing high-precision parts from overseas and then assembling them by domestic manufacturers. Due to their larger procurement volumes, leading domestic equipment manufacturers usually have a channel advantage in purchasing high-precision parts from overseas component suppliers. One of the core competencies of domestic wafer inspection equipment manufacturers lies in their ability to secure component supply channels, which in turn depends on their ability to stably obtain high-precision parts from overseas. Both domestic wafer inspection equipment manufacturers and leading overseas manufacturers adopt the business model of assembling after purchasing components, but overseas manufacturers typically participate in the R&D and design of upstream component suppliers.
The main domestic wafer inspection equipment manufacturers include Zhongke Feitian, Shanghai Jingce, Shanghai Ruili, Saiteng Co., Ltd., Chengfeng Technology, Silicon Industry Semiconductor, Dongfang Wafer, Shanghai Yumicro, Nanjing Zhong'an, etc. Currently, domestic wafer inspection equipment manufacturers can only ship in batches.For products manufactured at 28nm and above, those made below 28nm are still under development and verification. Overseas leading manufacturers generally cover processes below 2Xnm, while KLA's Surfscan, a defect detection product for patternless wafers SP7XP has been applied in 5nm and below processes.
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semiconductor quantity/Market scale of detection equipment
Estimated global volumeThe testing equipment market is expected to start warming up in the first half of 2024, but the recovery growth in the Chinese mainland market will lag behind by half a year to a year. The growth lag is mainly due to: 1) As of the first quarter, orders for wafer foundries in the Chinese mainland have not increased significantly, and there are no signs of a significant increase in capital expenditure; 2) Affected by US chip sanctions, products with high-end chips are difficult to ship to the Chinese mainland. The difficulty for the Chinese mainland to obtain high-end main chips will affect the volume of foundry orders for secondary and mid-range chips, which are mainly produced by wafer foundries in the Chinese mainland. Manufacturers can make the combination of mid-range chips perform like high-end chips through advanced packaging, but it still takes six months to a year for Chinese mainland manufacturers to master advanced packaging technology. The mastery of advanced packaging technology can increase the demand for mid-range chip foundry services, thereby driving growth in semiconductor equipment procurement needs including volume/testing equipment.
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Competitive landscape of China's wafer inspection equipment industry
In 2020, the global market for volume/detection equipment was mainly monopolized by American and Japanese manufacturers, with a high market concentration, with the CR5 exceeding 80%. Among them, Keltron Semiconductor (50.8%), Applied Materials (11.5%), Hitachi (8.9%), Innovative Technology (5.6%), and Retai Optoelectronics (5.6%). The Chinese semiconductor volume/detection equipment market still presents a pattern of one dominant company with multiple strong competitors. In 2020, Keltron Semiconductor's market share reached 54.8%, while Chinese manufacturers including Kefei Testing, Jingce Electronics, and RuiLi Scientific Instruments contributed a total of 2.3% of the market share.
semiconductor quantityThe localization rate of inspection equipment has increased from about 2% in 2020 to about 5% in 2023. In terms of product segments, the localization rate of high-precision Overlay measurement equipment is nearly zero; the localization rate of X-ray inspection equipment is less than 1%; the localization rate of film thickness measurement equipment has reached 15%; and the localization rate of optical reinspection equipment has reached 10%. ;The localization rate of AOI detection equipment can reach 15%.
Chinese mainland wafer inspection equipment manufacturers have a high degree of localization and a certain domestic customer base. However, the precision of the wafer inspection equipment that has been launched is mostlyAt the μm level, there is a significant technological gap compared to overseas leading manufacturers. In recent years, domestic manufacturers have continuously made breakthroughs in the field of semiconductor volume/inspection equipment, with the localization rate of equipment continuously increasing. Among them, Zhongke Feitian has mass-produced a series of products such as patternless wafer defect inspection equipment, patterned wafer defect inspection equipment, three-dimensional morphology measurement equipment, thin film thickness measurement equipment, and overlay accuracy measurement equipment, which have been successfully applied to the integrated circuit manufacturing lines with domestic processes of 28nm and above; Shanghai Jingceme's series of film thickness measurement products, OCD equipment, and electron beam equipment have received mass orders from many domestic customers, and the semiconductor silicon wafer stress measurement equipment has also received repeat orders from customers. At the same time, its bright-field optical defect inspection equipment has completed the delivery and acceptance of its first set and has received orders for more advanced processes; Chengfeng Technology has made important technological breakthroughs in the field of front-end YE (quality control) pattern inspection and provides a five-in-one multifunctional front-end AOI inspection equipment, integrating five major functions: wafer surface inspection, wafer backside inspection, edge inspection, warpage measurement, and wafer thickness measurement, which have been shipped to leading domestic customers.
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