The major customers of domestic thin-film deposition equipment manufacturers are now storage chips.

In the first half of this year, Microguide Nano (688147. SH) reported semiconductor equipment revenue of 629 million yuan, a year-on-year increase of 224.77%, accounting for 53.11% of its main business revenue, with new orders accounting for 85%. Tuojing Technology (688072. SH) achieved revenue of approximately 2.9 billion yuan, with a year-on-year increase of about 49%.

According to the reporter's understanding, among the new orders received by domestic thin-film deposition equipment manufacturers, there are more orders for storage chips, while there are fewer orders for logic chips.

According to SEMI, it is predicted that from 2026 to 2028, the global equipment expenditure for 300 million chip manufacturing plants will cumulatively reach $439 billion; among them, the Chinese mainland market will continue to maintain a strong investment trend. The production capacity of advanced processes will increase from 850,000 units per month in 2024 to 1.4 million units per month by 2028, with an annual compound growth rate of about 14%, which is twice the industry average.

Based on the proportions that chip manufacturing equipment sales account for approximately 86%, thin film deposition equipment sales account for about 22% of global chip manufacturing equipment sales, and semiconductor manufacturing equipment sales in mainland China account for around 37% of global semiconductor manufacturing equipment sales, the market size for thin film deposition equipment in mainland China is estimated to be about $10.2 billion in 2026 and $10.9 billion in 2027.

“Exponential growth”

The more chip layers there are, the more the demand for thin-film deposition equipment tends to grow exponentially.

Thin film deposition refers to the process of depositing specific materials at designated locations on a chip using particular techniques. In the manufacturing of logic chips, 3D NAND chips, and DRAM chips, the main types of thin films deposited include SiN thin film, SiO thin film, TEOS thin film, and others.

As the number of stacked layers in storage chips increases, the demand for thin-film deposition equipment on production lines has grown significantly. Generally speaking, when the number of stacked layers doubles, the demand for thin-film deposition equipment also doubles or even more.

The main requirements for the expansion of 3DNAND and DRAM chip production focus on CVD (Chemical Vapor Deposition) equipment and ALD (Atomic Layer Deposition) equipment. ALD equipment is aimed at the preparation of functional thin films with atomic-level precision, while CVD equipment is designed for the preparation of various types of dielectric thin films.

The demand for etching equipment and thin-film deposition equipment resulting from the expansion of storage facilities has led to a situation where suppliers are unable to meet the demand. Manufacturers such as AMAT (Applied Materials) have seen their delivery times for conventional etching and thin-film deposition equipment extended to 12 months.

An industry insider in thin-film deposition equipment stated that since the beginning of this year, domestic downstream logic chip manufacturers have shown an increased willingness to purchase domestically produced thin-film deposition equipment.

Domestic thin-film deposition equipment manufacturers have already begun to plan for capacity expansion.

On October 12, Weidao Nano announced a private placement, intending to issue no more than approximately 139 million shares to raise funds of no more than about 4.9 billion yuan, which will be invested in a thin film deposition expansion project.

In its announcement, MicroGuide Nano stated that as of June this year, the company's semiconductor equipment backlog had reached approximately 2.7 billion yuan. With the improvement of its product portfolio and the continuous increase in the number of customers and delivery volumes, the company's current production capabilities are facing certain pressures in supporting the parallel mass production of multiple product categories and the concentrated delivery of large orders. Therefore, there is a need to further enhance its capacity for scaled production and delivery assurance. Among these, the Central China project is mainly focused on the 3D NAND manufacturing process.

"Platformization"

Although mature devices such as CVD and ALD continue to see an increase in the production of storage chips, what film deposition manufacturers are most concerned about now are PVD (Physical Vapor Deposition) devices.

TuoJing Technology announced on July 11 this year that it plans to purchase shares of three companies: Wuxi Shangji, Shanghai Taina Micro, and Wuxi Kuangxing, by issuing shares and paying cash; the main products of these three companies include 3D integration equipment, PVD equipment, etc. On October this year, Microguide Nano launched PVD equipment, which is mainly targeted at copper interconnections and planar structures.

Tuojing Co., Ltd. stated in its announcement that the company can leverage its existing high-end customer channels and market brand advantages to accelerate the integration of PVD and its etching products into core application scenarios such as advanced logic and storage chips, thereby expanding the sales coverage for individual customers and increasing its overall market share.

The main function of PVD in chip manufacturing is to complete the thin film preparation in the chip metallization process.

Industry insiders mentioned to reporters that the main reason for leading manufacturers to enter the PVD sector is the current push by domestic wafer manufacturers to replace imported products with domestically produced ones. However, the global PVD market is highly concentrated, and the rate of localization is relatively low. Leading manufacturers in thin-film deposition already have equipment such as CVD and ALD that have passed verification, which facilitates the introduction of PVD equipment into production lines.

Currently, the global PVD device market is dominated absolutely by AMAT, with its PVD device market share consistently remaining above 80% for a long time.

Industry insiders mentioned that currently, film deposition manufacturers are generally focusing on the platformization of their film deposition equipment. The underlying technologies of CVD, ALD, and PVD devices are consistent, all involving vacuum systems, plasma sources, radio frequency and matching networks, chamber engineering, etc.

Among them, ALD places more emphasis on film uniformity and particle control capabilities, CVD focuses on large-area uniformity and plasma source design, while PVD is essentially sputtering deposition in a plasma environment.

The same company is responsible for providing a variety of thin-film deposition equipment, which also helps to alleviate the current shortage of components.

TuoJing Technology stated in its announcement that the core components of thin-film deposition equipment are highly versatile, with vacuum valves, vacuum pumps, robotic arms, sensors, precision machined parts, electrical components, etc., all being key categories of procurement shared by both parties.

Industry insiders mentioned that currently, there is a shortage of core components for semiconductor equipment. The core components of multiple product lines such as ALD, CVD, and PVD are versatile and can effectively mitigate the risks of supply chain fluctuations; however, domestic substitution solutions still require continuous production line verification.

Another industry insider in thin film deposition told reporters that although the underlying technologies are consistent, customers overlap, and components can be interchangeable, not all thin film deposition equipment manufacturers necessarily need to aim to become “platform-based manufacturers.” Instead, they should focus on their own strengths, iterate existing products according to customer needs, and explore new areas of development.

(Author: Pan Juntian)