In the chip production process, there is a type of enterprise that although not directly involved, plays a key role in the development of technology in the entire industry. They are semiconductor equipment manufacturers. The chip manufacturing process is extremely complex and can be roughly divided into silicon wafer preparation, epitaxial process, thermal oxidation, diffusion doping, ion implantation, thin film preparation, photolithography, etching, process integration, etc. The most well-known Dutch company, ASML, mainly produces photolithography machines, the core equipment of the photolithography process. In addition, etching machines, thin film equipment, diffusion ion implantation equipment, wet equipment, and process testing equipment are also indispensable. It is through the continuous development and production of advanced equipment by these equipment manufacturers that the efficiency of chip manufacturing has been greatly improved.
 
   

At present, global semiconductor equipment manufacturers are basically dominated by the United States, Japan and the Netherlands. Based on data from U.S. semiconductor industry research companies VLSI Research and Gartner,Applied Materials of the United States, ASML of the Netherlands, Tokyo Electronics of Japan (TEL), Lam Research of the United States and KLA of the United StatesIt has been the market leader for many years.

Diversified semiconductor equipment giant—Applied Materials  
 

 

Applied Materials was founded in 1967 and is headquartered in Silicon Valley, USA. The founder is Michael McNeilly, who graduated from the Department of Chemistry at Gonzaga University and worked in the silicone department of union Carbide Electronics founded by Jean Hoerni, known as the "silicon transistor pioneer." Later, he set up his own company, Apogee Chemicals. In 1967, McNeilly left Apogee due to conflicts with his partners and borrowed $7,500 from his father-in-law as start-up capital to establish Applied Materials to produce semiconductor manufacturing equipment. It is worth mentioning that the U.S. semiconductor industry began to develop rapidly in 1967, and many executives and talents began to jump out of Fairchild Semiconductor to start their own businesses. Silicon Valley was dotted with various newly established semiconductor device manufacturers. Unlike traditional giants, these emerging semiconductor companies do not have internal production capabilities. Applied Materials took this opportunity to develop. In the first few years of its establishment, Applied Materials' revenue grew at an annual rate of more than 40%.

In terms of business, Applied Materials involves thin film equipment, ion implanters, cleaning equipment, heat treatment and front-end testing equipment. Technically, Applied Materials maintains market leadership through acquisition and integration of new technologies. For example, in 1980, it acquired British Lintott Engineering to enter the ion implantation market; in 2000, it acquired Etec Systems, a mask manufacturing supplier, to enter into mask pattern generation solutions. Applied Materials attempted to acquire Tokyo Electron in 2013, but was not approved. Applied Materials also started its global layout early. In 1979, a branch was established in Japan and officially entered the Asian market. In 1984, it established the China Customer Service Center in Beijing and became the first foreign-funded semiconductor production equipment supplier to enter China. In 2001, the China regional headquarters was established in Shanghai. In 2020, Applied Materials was optimistic about China's economic recovery prospects after the epidemic and discussed building a joint venture factory in Lingang District, Shanghai. Applied Materials introduced on its official website that the company "has transformed from a small start-up into one of the most respected companies in the world." As of the first quarter of fiscal year 2021, Applied Materials' revenue increased by 24% to US$5.16 billion, setting a new record. It has become a global semiconductor equipment and service supply giant.      The star company in the limelight - ASML    

ASML mainly provides photolithography machines and related services to semiconductor manufacturers. Lithography machine, also known as mask alignment exposure machine, is the core equipment of the lithography process. The photolithography process is the most critical step in the chip manufacturing process. Photolithography can determine the key dimensions of the chip. This step also accounts for 35% of the overall chip manufacturing cost. As Intel, TSMC, Samsung and other companies enter the era of mass production focusing on advanced processes such as 7nm, every chip manufacturer hopes to purchase as many lithography machines as possible to increase production capacity. This has made ASML's limelight boom, with multiple performance indicators such as revenue hitting new highs.  
   

As early as nearly 40 years ago, ASML was just a small joint venture owned by Philips. At that time, the cutting-edge technology of lithography machines was in the hands of GCA Medical Technology Company of the United States and Nikon of Japan. In 1984, Philips and chip machine manufacturer Advanced Semiconductor Materials International (ASMI) established a new company to develop lithography systems. At the beginning of its establishment, dozens of ASML employees worked in a shed near the Philips office headquarters in Eindhoven, the Netherlands. It was also under such simple conditions that ASML launched the first lithography system PAS 2000, which gained initial recognition from the market. In 1995, ASML was listed on the Amsterdam and New York Stock Exchanges. Philips repurchased all its shares and ASML became a completely independent listed company.  
 

Since then, Asmai has made two leaps with the help of two "Bo Le". At the beginning of the 20th century, ASML andTSMCCooperated to develop a technical solution called "immersion lithography" and produced the first immersion lithography machine prototype in 2004, which enabled it to technically catch up with its competitor Nikon for the first time. In 2007, ASML captured 60% of the photolithography machine market, surpassing Nikon in revenue for the first time. As early as 1997,IntelIt has joined forces with governments and enterprises to establish EUV LLC, the top cutting-edge technology organization in the chip industry, to research and promote the development of EUV technology. EUV lithography uses shorter wavelengths of light to create smaller chips. ASML is a member of this organization and has obtained priority access to the United States' leading semiconductor technology. This step allows ASML to leave competitors such as Nikon far behind. In 2010, ASML delivered its first prototype extreme ultraviolet (EUV) lithography tool, and in 2015, ASML's EUV lithography process was ready for mass production. The output of ASML's EUV lithography machines has never been high, and the unit price is as high as 115 million euros. It is currently mainly provided to TSMC, Intel, Samsung Electronics and other companies.      Japan’s No. 1 company that started its business through agency trade—Tokyo Electronics  
 

Japanese companies still show a huge presence in the field of semiconductor manufacturing equipment, and Tokyo Electron Limited is one of the leaders. Tokyo Electronics was born in 1963. At that time, the company name was "Tokyo Electronics Laboratory Co., Ltd." and it was affiliated to Tokyo Broadcasting System Co., Ltd. Initially, Tokyo Electronics' registered capital was only 5 million yen, and there were only 6 employees including the founder. It was not until 1965 that it signed an agency contract with Fairchild Semiconductor in the United States for IC testers, and it began to develop. But Tokyo Electronics is by no means satisfied with being just an agent. In 1968, it established a joint venture company Tel Thermco with Thermco of the United States to produce and sell diffusion furnaces. This was also Japan's first semiconductor equipment manufacturer. In 1976, Tokyo Electronics developed the world's first high-pressure oxidation furnace; in 1986, the first vertical diffusion furnace was shipped. By 1989, Tokyo Electron's semiconductor manufacturing equipment revenue exceeded US$600 million, ranking first in the world and retaining the global championship for three consecutive years.  
 

Tokyo Electronics' products cover almost all processes in the semiconductor manufacturing process. Tokyo Electronics holds 90% of the world's share in the field of "coating and developing equipment" that coats photoresist (photosensitive material) on wafers and displays electronic circuits. It also has advantages in fields such as "etching" that uses gas to remove excess parts other than circuits. In order to meet the growing demand for global semiconductors, Tokyo Electronics plans to promote investments such as research and development. Tokyo Electronics President Toshiki Kawai said that the company plans to invest 400 billion yen (approximately RMB 25 billion) in research and development funds in the three years starting from fiscal 2019 (ending March 2020). Tokyo Electron's goal is to become the world's largest supplier of semiconductor equipment.      Leading the etching equipment market——Fanlin Group  
 

Lam Research, a leading semiconductor equipment company, was founded by David K. Lam, who was born in China. David K. Lam has worked at Xerox, Hewlett-Packard, and Texas Instruments. In 1980, he received financial support from Intel founder Bob Noyce and established Lam Group. Lam Group focuses on the etching, deposition and cleaning markets. In 1981, the first plasma etching machine product AutoEtch was launched; in 1992, the first ICP dry etching equipment was developed, opening the door to ICP etching equipment; in 2014, it entered the field of atomic layer etching; in 2020, it released innovative plasma etching technology and system solutions, which increased the etching output accuracy by more than 50%. Fanlin Group occupies half of the etching machine market.  
 

Lam Group’s business also spans the world. Since the mid-1980s, Lam Group has expanded globally, opening offices and establishing business in Europe, South Korea, Singapore, Japan, China, and India. From Lam's financial report, we can learn that the Asia-Pacific region contributes the most to its revenue, accounting for 80% of the total revenue. Last year, SMIC spent US$600 million to purchase capital equipment consisting of Lam etching tools for the production of wafer products.      The king in the field of semiconductor testing equipment - Kelei SemiconductorKLA Semiconductor (KLA) was formed in 1997 by the merger of two companies, KLA and Tencor. The former was founded in 1975 and focuses on defect detection solutions; the latter was founded in 1977 and focuses on measurement solutions. After the merger, it was called KLA-Tencor Corporation and was renamed KLA Corporation in 2019. Although there is a big gap between Kelei and the top four manufacturers in terms of revenue level, according to SEMI statistics, Kelei accounted for more than half of Qiandao's detection and measurement market in 2018, ranking first in the industry.  
 

Kelei Semiconductor has grown through a series of mergers and acquisitions. In 2019 alone, Kelei Semiconductor conducted 28 mergers and acquisitions, such as the acquisition of Israeli company Orbotech for approximately US$3.2 billion. Kelei Semiconductor has always been optimistic about the Chinese market. It established its first branch in China in 1999 and currently has 10 offices in Beijing, Shanghai, Nanjing, Xi'an, Wuhan, Tianjin, Shenzhen, Dalian, Xiamen, and Wuxi. In 2019, more than half of Kelei's revenue came from China.  
 

 

Although the world was hit by the COVID-19 epidemic in 2020 and many industries faced great challenges, semiconductor equipment manufacturers did not seem to suffer losses. The performance and stock prices of the five semiconductor equipment giants mentioned above almost all achieved considerable growth last year. Not long ago, at the opening ceremony of SEMICON China, Ju Long, global vice president and president of China of the International Semiconductor Industry Association (SEMI), revealed that the global semiconductor equipment market will grow significantly by 18.9% in 2020, and mainland China will grow by 39%, becoming the world's largest equipment market for the first time. The total revenue of these five equipment manufacturers in the mainland Chinese market in 2020 reached 72.7 billion yuan. Their CEOs have both said China is critical to their business and have pledged to work more closely with Chinese companies. When the technology industry encounters an unprecedented chip supply crisis, I believe that only global openness, cooperation and joint efforts are the right way forward for enterprises.

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