According to reports, demand for semiconductor equipment has increased significantly due to the active expansion of production and the evolution of technology routes by foundries such as TSMC and Samsung. SEMI recently announced in its Global Semiconductor Equipment Market Statistics (WWSEMS) report that global semiconductor equipment sales in the first quarter of 2021 increased by 51% year-on-year and 21% from the previous quarter, reaching US$23.6 billion. We believe that driven by the improvement in supply and demand structure and rising industry prosperity, industry chain companies will continue to benefit.  
Mainland China’s semiconductor equipment market ranks first in the world in 2020
Manufacturing is the most critical link in the semiconductor industry with the largest market share, and equipment and materials are the cornerstone of semiconductor manufacturing. As the proportion of domestic semiconductor manufacturing sales in the overall semiconductor industry chain increases year by year, the market for equipment and materials used in semiconductor manufacturing has also moved domestically.  
Benefiting from the effective domestic epidemic control, as well as policy and capital support, mainland China's semiconductor equipment sales reached US$18.1 billion in 2020, +35% year-on-year, surpassing Taiwan, China and ranking first in the world. Material sales reached US$9.8 billion, +12% year-on-year, surpassing South Korea to rank second in the world. Since equipment and materials are to a certain extent leading indicators of the prosperity of wafer manufacturing, the domestic semiconductor manufacturing market will continue to expand in the future.  
  Semiconductor equipment companies’ performance grows rapidly  
Benefiting from the continuation of the industry's high prosperity and the continued advancement of domestic substitution, semiconductor equipment companies represented by Northern Huachuang, China Micro, Huafeng Measurement and Control, Changchuan Technology, Jingce Electronics, Pure Technology, and Xinyuan Micro have achieved rapid growth in revenue and net profit in 2020 and the first quarter of 2021. Especially in the first quarter of 2021, net profit growth exceeded 100% year-on-year.      Breakthroughs have been achieved in many subdivisions, and the process of domestic substitution has accelerated.  
The domestic semiconductor equipment industry started late, and the overall business scale is far behind that of overseas giants. However, in recent years, domestic companies have continued to increase investment and made key breakthroughs in technology, breaking gaps in many fields. Some market segments have begun to realize domestic substitution.  
For example: in terms of etching machines: Micron's research and development has reached the 5nm technology node, which is at the international leading level; in terms of thin film deposition equipment: Northern Huachuang has reached the 14/28nm technology node; in terms of cleaning equipment: Pure Technology has entered the supply chain of SMIC, Huahong and other companies; in terms of testing machines: Huafon Measurement and Control has entered the supply chain of international packaging and testing leaders such as ASE and STMicroelectronics.  
       
                         AMEC                        
  The only domestic 7nm/5nm etching technology equipment manufacturer  
At present, the company's plasma etching equipment has been widely used by international first-line customers in integrated circuit processing and manufacturing and advanced packaging from 65 nanometers to 14 nanometers, 7 nanometers and 5 nanometers. Among them, 7nm/5nm etching technology is the only one in China. and get bulk orders. In addition, AMEC has been developing MOCVD equipment, the most critical equipment for LED epitaxial wafer processing, since 2010. It has developed three generations of MOCVD equipment, which can be used for blue-green LED and power device processing, including: first-generation equipment Prismo D-Blue, second-generation equipment PrismoA7 and the third-generation 30-inch large-size equipment under development.  
  Market share accelerated  
Judging from the bidding situation of local storage and logic IC manufacturers, the overall procurement ratio of AMEC exceeds 15%, making it the largest local semiconductor etching equipment supplier to mainstream storage and foundry manufacturers. At the same time, the company's market share in the local market has accelerated. Judging from the bid winning status of Yangtze River Storage, it has reached 9 units so far in 2020, accounting for 22% of the bidding ratio in the same period.  
                       

Changchuan Technology

  Research and development efforts continue to increase, and core technologies achieve breakthroughs  
In 2020H1, the company’s R&D investment reached 89 million yuan, a year-on-year increase of 110%. Revenue accounted for 28%. and achieved key R&D progress.  
Mainly include: independent development of the digital test machine D9000 based on 1024 digital channels, 200Mbps digital test rate, 1G vector depth and 128A current test capability, breaking the domestic gap in digital test machines; development of the first 8/12-inch fully automatic ultra-precision probe station with independent intellectual property rights in China, which can be applied to SOC, Logic, Memory, Discrete, etc., which is currently being carried out on the client Demo, second-generation products are under development; module automated testing equipment has been introduced into domestic mainstream manufacturers in batches, and final certification for world-class end customers has been completed.  
  Private placement boosts rapid industrialization and localization of probe stations  
In 2020, the company plans to raise 372 million yuan through private placement for research, development and industrialization of probe stations. The product developed in this probe station fundraising project is the company's second-generation fully automatic ultra-precision probe station, which is compatible with 8/12-inch wafer testing. The product segments include CP12-SOC/CIS, CP12-Memory, CP12-Discrete, CP12-SiC/GaN, etc., which can be applied to the testing of integrated circuits such as SOC/CIS, Memory, Discrete, and third-generation compound semiconductors.  
At present, the new second-generation probe station research and development project has completed the development and verification of key technology modules and is now in the internal complete machine testing stage. Global probe stations are mainly monopolized by Tokyo Precision and TEL. Among the few domestic probe station suppliers, Nagakawa is the most promising to take the lead in achieving localization.

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