Hong Kong Stock Concept Tracking | E-grade hydrofluoric acid and isopropyl alcohol are rising in price, and supply and demand for high-end G5 products in the short to medium term may continue to be in tight balance (with concept stocks)
The Zhitong Finance App learned that semiconductor electronic grade chemical manufacturers have begun to increase prices. As demand for AI-related chips increases, demand for upstream materials has skyrocketed, and prices of upstream chemical raw materials such as fluorite, sulfuric acid, and propylene have continued to rise due to the Middle East geopolitical conflict and the tightening of global chemical production capacity, and cost pressure is transmitted from top to bottom to semiconductor electronic chemicals. Prices for electronic grade hydrofluoric acid and electronic grade isopropanol (IPA) were raised simultaneously, and leading chemical manufacturers such as Formosa Plastics and Shengyi confirmed price adjustment plans one after another.
According to reports, Formosa Plastics Group is an important supplier of G5 electronic hydrofluoric acid and electronic-grade isopropanol (IPA) in the Asia-Pacific region. It is in the second tier after major Japanese and South Korean manufacturers. It supplies large quantities of wafers in Taiwan and mainland China, and is an important alternative source of supply outside mainland manufacturers. Shengichi is TSMC's core domestic electronic grade isopropanol (IPA) purification supplier.
Formosa Plastics Group's two major electronic grade chemicals, electronic grade hydrofluoric acid (HF) and electronic grade isopropanol (IPA), have increased in price. Formosa Plastics said that the main raw materials for electronic grade hydrofluoric acid are sulfuric acid and fluorite. Prices of these two raw materials have continued to rise recently, so the sales price of electronic grade hydrofluoric acid products will be “moderately adjusted” in the third quarter; the price increase of propylene, the main raw material for electronic grade isopropyl alcohol, will reflect costs simultaneously, and the market has gradually entered the price adjustment stage.
Shoichi said that prices had already risen in the second quarter to cope with the increase in raw material prices. Afterwards, the price trend of raw materials will be closely monitored, and the possibility of continued price increases will not be ruled out in the third quarter to reflect costs.
Electron-grade hydrofluoric acid and electron-grade isopropyl alcohol are key materials in wafer manufacturing, and their scope of application covers GPU, HBM, and advanced manufacturing processes below 2nm. Electronic-grade hydrofluoric acid is the core material for wafer etching and surface cleaning. G5 grade (7N-11N ultra-high purity) is suitable for 2nm-14nm advanced processes, GPUs, HBM and other high computing power chips. The metal impurity control accuracy reaches ppt level, and the triple barriers of technology, certification, and production capacity are extremely high. Electron-grade isopropyl alcohol is a key cleaning solvent for semiconductor lithography, packaging, and precision PCB manufacturing. It can remove fine particles and organic pollutants from the surface of wafers, and is a basic material for maintaining yield in advanced processes.
The analysis points out that compared to general chemical products, electronic grade hydrofluoric acid and electronic grade isopropyl alcohol must have extremely high purity, and they still need to go through a long period of verification and customer certification before being introduced into the fab. Once qualified for supply, the supply relationship is usually relatively stable, with a high technical threshold and bargaining power.
In terms of electronic grade hydrofluoric acid, the global high-end G5 market has long been dominated by Japanese companies (Stella CheMifa, Morita Chemical (Morita)), but their main devices have been in service for a long time and their desire to expand production is low, leading to limited high-end supply growth; although many domestic companies (polyfluoride, Juhua, Binhua Group, and Sanmei Co., Ltd. (joint venture Morita New Materials)) have achieved G5 mass production, and it is still difficult to maintain a tight balance between supply and demand.
In terms of electronic grade isopropyl alcohol, overseas companies (Tokuyama Chemical and Sumitomo Chemical (global G5 technology benchmark)) still monopolize the high-end market, and local Chinese manufacturers (Jianghua Wei, Danor, Jingrui Electric Materials, Xinhua Co., Ltd., Xilong Science, etc.) are accelerating capacity expansion and technological upgrading, and the localization process is progressing steadily.
Huatai Securities believes that in terms of domestic supply, although many companies have achieved mass production of G5 grade products, production capacity for high-end products is still difficult to meet the rapidly growing demand for semiconductors, and the supply and demand for high-end G5 products in the short to medium term may continue to be in tight balance.
Related concept stocks:
Dongyue Group (00189): It has production capacity as a basic raw material for anhydrous hydrofluoric acid (AHF), and is equipped with G5 electronic grade hydrofluoric acid; it is also equipped with electronic fluorinated liquid.
Binhua Co., Ltd. (06745): A small number of domestic enterprises that have achieved mass production of G5 electronic grade hydrofluoric acid, with a G5 production capacity of about 6,000 tons/year.
China Petroleum & Chemical Co., Ltd. (00386): One of the largest producers of propylene in China. Propylene is the core raw material for the manufacture of isopropyl alcohol, accounting for more than 70% of production costs. It is an important supplier of propylene for the vast majority of domestic isopropyl alcohol plants (Wanhua, Satellite, and various IPA refining companies).