# Breaking the Deadlock and Reshaping

Deep Water Area of Domestic Substitution in Semiconductor Materials
In the grand project of chip manufacturing, semiconductor materials play the role of the "cornerstone." From substrate preparation to circuit lithography, and then to etching and deposition, every core process relies on their support. However, currently, the overall domestic substitution rate of semiconductor materials in China hovers around 20%, and this huge supply-demand gap precisely indicates an immeasurable market space in the future.
To understand this track, it is first necessary to clarify its industrial chain structure. Semiconductor materials are mainly divided into front-end wafer manufacturing materials and back-end packaging materials. Among them, front-end materials (such as silicon wafers, photoresists, electronic special gases, wet electronic chemicals, polishing materials, and target materials) not only have extremely high technical barriers but also account for the vast majority of value. According to SEMI forecasts, the global semiconductor materials market will reach $86 billion by 2025, with wafer manufacturing materials accounting for $56.2 billion, occupying 65% of the absolute dominance.
In this battle of domestic substitution, silicon wafers, photoresists, and electronic special gases form the most core "three battlegrounds."
As the substrate carrier for chips, silicon wafers are the most used and highest value basic materials in the semiconductor industry. Currently, the global silicon wafer market is highly concentrated, with Shin-Etsu Chemical, SUMCO, and other top five giants controlling over 80% of the share. However, domestic companies have begun to see some breakthroughs: 6-inch and smaller silicon wafers have basically achieved self-sufficiency; the domesticization rate of 8-inch silicon wafers has risen to 55%, effectively supporting the demand for mature processes; in the field of 12-inch large silicon wafers, which represent mid-to-high-end directions, although the current domesticization rate is only about 25% and faces a capacity gap of over 70%, with the acceleration of local enterprise expansion, it is expected that by the end of 2026, this proportion could surpass 30%.
Photoresists are the "photosensitive nerves" that determine the process accuracy of chips. Through photochemical reactions, they replicate precise circuit patterns onto silicon wafers. Currently, Japanese companies like Tokyo Ohka Kogyo and JSR hold over 80% of the global market share, with high-end markets reaching as high as 95%. In China, G-line/I-line photoresists have achieved scaled replacement (domesticization rate over 60%-90%), but the domesticization rate of mid-end KrF photoresists remains less than 15%, and high-end ArF and EUV photoresists have not yet formed scaled capacity, which is a hard bone that must be gnawed in the future.
Special gases are known as the "blood" of chip manufacturing, indispensable in etching, cleaning, and other processes, with extremely strict purity requirements (advanced processes generally require 9N ultra-high purity). Although four giants—Air Products, Linde, and others—monopolize about 80% of the global market, domestic basic special gases have achieved domestication, and mid-end etching gases are accelerating their substitution. In the future, the import substitution of high-end doping gases and advanced process special gases will be key to industry breakthroughs.
In summary, the domestic substitution of semiconductor materials is a long-term battle. Although some breakthroughs have been achieved in mid-to-low-end fields, there are still huge gaps in high-end core materials. But it is precisely this gap that points domestic companies in the right direction and also breeds enormous industry opportunities.