Semiconductor parts market size

Semiconductor parts are first divided into two categories: 1. Precision machine parts and 2. General purchased parts. 1. Precision machine accessories are usually designed by the various semiconductor equipment companies, and then outsourced processing, only for the company's equipment, such as process chambers, transmission chambers, etc., localization is relatively easy, and the surface treatment, precision machining and other technology requirements are higher. 2. General purchased parts are some general parts that have been verified for a long time and are widely recognized by many equipment factories and manufacturers. They are more standardized and will be used by different equipment companies, and will also be used as spare parts and consumables on the production line. For example, silicon structural parts, O-Ring seals, valves, gauges, pumps, Face plates, gas spray heads, Shower heads, etc., such parts have strong versatility and consistency, and need to be certified by the equipment and manufacturing line.

Semiconductor equipment parts manufacturers need to conduct qualification certification and the first trial production before mass production is more strict, and the whole process is more than 3 years. The certification process mainly includes (1) qualification certification: in addition to the quality system certification, it is also necessary to confirm the special process certification, including the process capability certification and performance index certification. (2) Trial production of the first piece: the first sample is delivered and accepted by the customer before it is qualified for mass production. (3) Mass production: After 2 to 3 years through the first trial production, semiconductor equipment parts manufacturers can begin mass production. According to the research of CICC and Xinmo, the global semiconductor equipment parts market size in 2020 is $30-35 billion, of which the value of mechanical parts accounts for the largest proportion. According to BOC Securities, in 2019, the global non-lithography machine equipment parts market size is about 10-20 billion US dollars, while the lithography machine parts market size is more than 5 billion US dollars, and the factory ancillary equipment market size is about 2 billion US dollars. The annual purchase of spare parts by fabs also has a certain market size. In terms of specific classification, the market size of RF power supply, gas Flow meter MFC (Mass Flow Controller), vacuum pump and other segments is estimated to be about $2 billion.

From the perspective of market investment path, according to SEMI 2022 June data, 2022 global semiconductor equipment market sales are only expected to reach $109 billion, and the corresponding global semiconductor parts market size is about $43.6 billion. At present, the gross profit margin of domestic semiconductor equipment manufacturers ranges from 30 to 60%, according to the gross profit margin of international semiconductor equipment manufacturers 55 to 60%, according to the proportion of China accounted for 28% of the world and 5-10% of the equipment localization rate, it is estimated that the domestic equipment procurement demand for semiconductor precision parts with industrial breakthrough nature is about 916 million US dollars. The static data amounted to about 6.134.2 billion yuan. It can be seen that the current market of "localization" semiconductor precision parts is limited, and its initial growth also needs to benefit from the development and growth of domestic equipment manufacturers, which has a long cycle and faces bottlenecks in the early stage, and the investment logic of domestic substitution is not fully applicable. On the other hand, if the parts manufacturer's products have the ability to supply the top five to the top ten equipment manufacturers in the world, according to the five parts suppliers of the same product, the potential market space is open about 10 times, and the future investment logic of parts needs to be combined with the consideration of the "Chinese" (industrial transfer) of semiconductor parts.

Therefore, our overall understanding of semiconductor parts investment, investment in domestic parts manufacturers 

1, It is possible to have an international technical level with a view to the future, that is, to have the technical ability or potential to supply more advanced processes;

2, For entrepreneurial enterprises, it can focus on equipment manufacturers to help support the growth of parts manufacturers, and domestic equipment enterprises and excellent parts enterprises can be matched according to a certain proportion of the investment portfolio;

3, From the perspective of the overall picture of the parts industry and the characteristics of global supply, there are certain opportunities and values in overseas project mergers and acquisitions or technology introduction.

In addition to research and development capabilities and technical accumulation, factors such as customer resources and response ability also constitute the investment value and advantages of parts manufacturers.

In 2017, dozens of new fabs have been added in China, among which SMIC, YMTC, CXMT, Yuexin and other capacity expansion will be further increased in 2022, and Silanwei, Huahong Huari, Wentai and other companies will continue to expand production. 2022 will be the year when local fabs carry out the largest capacity expansion and the continuous improvement of process technology. The global share of local fab equipment purchases will increase from 28.9% in 2021 to more than 30%.​

In addition, the 8-inch production capacity (including planning, construction, production, etc.) is about 1.3 million pieces/month, of which the production capacity has reached about 750,000 pieces/month, accounting for about 58%. The total production capacity of about 8 inches is about 4.6 million pieces/month, of which the production capacity has reached about 1.35 million pieces/month, accounting for about 29%.

The semiconductor parts market is divided into two different markets on the equipment side and the manufacturing side, with the former entering a longer certification cycle and the component selling price averaging about 20% premium over the latter. According to the statistics of Xinmo, in 2020, China's local wafer manufacturers (mainly including SMIC, Huahong Group, China Resources Microelectronics, Yangtze River Storage, etc.) will purchase 8 inch and 12 inch front-end equipment parts and components for about $430 million. Due to the rapid expansion of China's local wafer manufacturing capacity, it is expected that the demand for semiconductor parts will continue to be strong, according to the existing local wafer manufacturing capacity plan, there will be 50% new capacity by 2023, it is expected that the domestic complementary semiconductor parts market will exceed 8 billion yuan in 2023, and is expected to exceed 12 billion yuan by 2025.​​

The components directly purchased by fabs mainly include quartz parts, RF generators, pumps, valves, electrostatic suction cups, spray heads, edge rings, flow meters, MFC, ceramic parts, sealing rings.

Summary: As the main component of semiconductor equipment, components, together with semiconductor materials and EDA software, support the design, manufacturing, sealing and testing links in the semiconductor industry chain, thus supporting the digital process of the global economy. Semiconductor core components, like semiconductor raw materials, although the market size is small, it determines the core composition, main cost, and high-quality performance of semiconductor equipment. In 2020, the global semiconductor core parts market size is about $20-30 billion, and the semiconductor equipment market size is about $80-90 billion; Semiconductor equipment and semiconductor materials, EDA together support the global semiconductor chip and application industry scale of about 500 billion US dollars.

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