Listing Success | Frost & Sullivan Congrates Chongqing Zhenbao Technology Co., Ltd. on Successfully Listing on Sci-Tech Innovation Board (688797.SH)

•The company is one of the few enterprises in China that simultaneously possesses technology for preparing semiconductor materials such as large-diameter single-crystalline silicon rods, polycrystalline silicon rods, and chemical vapor deposition silicon carbide, as well as high-precision processing and surface treatment technologies for hard and brittle material components like silicon, quartz, and ceramics. In terms of semiconductor equipment components and surface treatment, the company has overcome several technical challenges such as micro-depth hole processing and curved surface processing, achieving self-sufficiency in components like alkaline etching curved silicon upper electrodes and high-density ceramic components. The company continues to invest heavily in research and development in areas such as silicon carbide components, semiconductor electrostatic chuck critical precision components, and high-density coating preparation. The company’s semiconductor equipment component products are widely used in advanced process integrated circuit manufacturing at 14nm and below, 3D NAND flash memory chip manufacturing with 200 layers and above, and DRAM advanced process storage chip manufacturing at 20nm and below.

•The company continuously focuses on key semiconductor equipment components such as plasma etching and thin film deposition in integrated circuits, forming an integrated “raw materials + components + surface treatment” business platform. It has the ability to provide customers with various types of components within vacuum chambers. In terms of raw material production, the company produces large-diameter single-crystalline silicon rods, polycrystalline silicon rods, and granulated materials of silicon carbide and alumina ceramics via chemical vapor deposition, yttria oxide ceramic granulated powder, etc.; in terms of component production, by producing various components such as silicon, quartz, silicon carbide, and ceramics, the company eliminates the need for downstream customers to undergo multiple certifications from single-component suppliers; in terms of surface treatment services, the company offers various surface treatment capabilities including precision cleaning, anodization, and sputtering regeneration, enabling flexible customization of surface treatment solutions based on different customers, processes, and scenarios.

•In the semiconductor field, the company’s products and services are widely supplied to mainstream domestic storage chip manufacturers and integrated circuit manufacturers. They are mainly used in advanced process lines such as 14nm and below, 3D NAND with 200 layers and above, and DRAM at 20nm and below. The products have also been certified and supplied in bulk by international integrated circuit manufacturers such as Intel (Dalian), GlobalFoundries, UMC, and Texas Instruments. In the display panel field, the company’s products and services are widely supplied to mainstream domestic display panel manufacturers such as BOE, TCL CSOT, Tianma Microelectronics, Hikvision, and Rainbow Optoelectronics. They are mainly used in high-end process lines such as G8.5-G11 high-generation lines and AMOLED, and the company has achieved self-sufficiency in key components such as electrostatic chucks in G10.5-G11 ultra-high-generation lines, 4.5KV-5KV ultra-high-voltage processes, and OLED process manufacturing equipment, as well as bipolar electrostatic chucks in PVD equipment.

•The company ranks among the leading local enterprises supplying silicon components and quartz components for semiconductor equipment to wafer factories, and among local service providers of surface treatment services for semiconductor and display panel equipment components.

Frost & Sullivan has long focused on the Chinese semiconductor and display panel industry and has published numerous research reports, which are widely cited in the prospectuses of leading listed companies, helping clients accelerate their growth.

Semiconductor equipment components refer to components that meet the performance requirements of semiconductor equipment and technology in terms of material, structure, process, quality, precision, reliability, and stability. They are an important part of semiconductor equipment. The quality, performance, and precision of components directly determine the reliability and stability of semiconductor equipment. They are the core components of semiconductor equipment and play a decisive role in performance and cost. Therefore, they are key factors determining the level of semiconductor equipment industry development.

By application area, semiconductor components mainly include mechanical, gas/liquid/vacuum system, electrical, mechatronic, instrumentation, and optical components. The company’s component products used in semiconductor equipment mainly include quartz components, silicon components, silicon carbide components, and engineering plastic components. These components are located within vacuum chambers in semiconductor equipment and belong to non-metallic components with consumable characteristics among mechanical components.

In 2024, among the total procurement amount of 1.772 billion yuan for semiconductor equipment components from domestic wafer factories, 71.4% was purchased directly from component manufacturers, with a procurement amount of 1.266 billion yuan. In the future, as domestic wafer factories increase their purchases from local direct suppliers, the proportion of direct purchases from component manufacturers is expected to gradually rise. By 2029, the proportion of direct purchases from component manufacturers will reach 80.3%, with a procurement amount of 2.918 billion yuan.

Procurement Amounts of Non-Metallic Components by Domestic Wafer Factories (by Supplier Type)

Source: Frost & Sullivan Analysis

In 2024, among the total procurement amount of 1.135 billion yuan for non-metallic components from domestic wafer factories, 70.8% was purchased directly from component manufacturers, with a procurement amount of 0.804 billion yuan. By 2029, among the total procurement amount of 2.627 billion yuan for non-metallic components from domestic wafer factories, the proportion of direct purchases from component manufacturers will reach 80.7%, with a procurement amount of 2.120 billion yuan.

Procurement Amounts of Non-Metallic Components by Domestic Wafer Factories (by Supplier Type)

Source: Frost & Sullivan Analysis

●Evolution of process technology requires higher technical standards for equipment components

With continuous progress in process technology, the technological nodes of integrated circuits have evolved from 1μm in the 1980s to current 7nm, 5nm, and even 3nm. As the feature size decreases, the manufacturing processes for integrated circuits have stricter technical requirements for surface roughness, metal impurities, and surface particle size and quantity in equipment components, which directly affect wafer yield and performance. This places higher demands on the production technology and manufacturing processes of equipment components.

●Domestic substitution provides opportunities for local direct suppliers

Domestic integrated circuit and display panel manufacturing enterprises, in order to ensure supply chain availability and stability, reduce procurement costs, and improve procurement efficiency, directly purchase component products and surface treatment services from local direct suppliers after obtaining certification.

Due to the embargo on advanced equipment from Europe, America, and Japan, domestic integrated circuit and display panel manufacturing enterprises have increasing needs to develop new processes on existing equipment. They increasingly require local direct suppliers to participate in collaborative research and development of subsequent processes. To improve testing efficiency, enhance the overall design effect of components in vacuum chambers, and better ensure quality traceability, domestic integrated circuit and display panel manufacturing enterprises require local direct suppliers to improve their overall supporting capabilities for multiple products and processes.

●The importance of the “raw materials + components + surface treatment” integrated business platform increases

Components in vacuum chambers primarily function to control the uniformity and stability of process gases and support certain structures. While ensuring smooth process reactions, they also manage side products and extend the online usage rate of equipment. Therefore, it is necessary to continuously improve the size accuracy, cleanliness, corrosion resistance, and consistency of component products in terms of raw materials, precision processing, and surface treatment, to meet the evolving process requirements.

To possess the capabilities for collaborative development and integrated design with customers, as well as the ability to support multiple products, component enterprises must also have the capabilities for self-production of materials, product processing, and surface treatment technologies. At the same time, they should actively develop next-generation materials (such as chemical vapor deposition silicon carbide), next-generation precision processing technologies (such as deep hole processing with a depth-to-width ratio of more than 60:1), next-generation surface coating technologies (coating technologies with a porosity approaching zero), and next-generation coating materials (yttrium fluoride and yttrium oxide fluoride coating materials).