As the “invisible champion” of chip manufacturing, the domestic substitution process of semiconductor photoresists is directly related to the security and competitiveness of China’s semiconductor industry chain. This report focuses on three core types of photoresists: KrF, ArF, and EUV, comprehensively analyzing technical difficulties, the current status of domestic substitution, and future breakthrough paths. It deeply compares the differences among five listed companies, including Strongly New Materials and Tongcheng New Materials, in terms of technical routes, customer certification, and mass production capabilities, helping investors grasp structural opportunities in the wave of domestic substitution of photoresists. The report will answer three key questions: What stage is the domestic substitution of various photoresists at? Which companies have real technological barriers? How to build the optimal investment portfolio in the current market environment?
Analysis of the Current Status of KrF Photoresist: The Main Battlefield for Domestic Substitution
KrF photoresist (248nm), as a core material for mature processes, has become the main battlefield for domestic substitution, widely used in storage chips, CIS image sensors, and other fields. According to data from the China Electronic Materials Industry Association, the demand for KrF photoresist in China in 2023 is about 2800 tons, with domestic supply only around 420 tons, resulting in a high dependence on imports of 85%, mainly monopolized by Japanese companies such as Tokyo Ohka and Shin-Etsu Chemical. This severely imbalanced supply and demand situation is changing, as domestic companies have shifted from “can it be made” to “how well can it be made,” significantly accelerating the substitution process.
From a technical perspective, the core difficulty of KrF photoresist lies in resin synthesis and formula optimization. Compared to g-line/i-line photoresists, KrF products require more precise molecular weight control (with a dispersity of <1.05), higher purity requirements (metal impurities <1ppb), and a more complex photosensitizer system. Currently, there is still a gap in resin synthesis in China, leading to domestic KrF photoresists being 10%-15% lower than imported products in key indicators such as exposure latitude (EL) and line width uniformity (LWR), which is also the main technical bottleneck restricting the speed of domestic substitution.
In terms of industrialization progress, Shanghai Xinyang (300236.SZ) is in a leading position. The company’s KrF photoresist has been certified by mainstream wafer manufacturers such as Yangtze Memory Technologies and SMIC, achieving sales revenue of 120 million yuan in 2023, and is expected to exceed 300 million yuan in 2024. Its products perform stably in NAND Flash manufacturing, but there are still issues with a high defect rate in the logic chip field. Shanghai Xinyang adopts a mixed route of “self-developed resin + imported photosensitizer,” with a yield that has improved to about 75% (international level is about 85%), and it is expected to reach conditions for large-scale production by the end of 2024.
Tongcheng New Materials (603650.SH) has entered the KrF photoresist field through the acquisition of Beijing Kehua, with technology accumulated from the Institute of Chemistry, Chinese Academy of Sciences. Its feature is the independent research and development of the photosensitizer system, achieving breakthroughs in DRAM manufacturing, and is currently in the late stage of customer validation. Tongcheng’s disadvantage is its reliance on Japanese imports for resin, posing potential risks in the supply chain, but its “formula know-how” is well-established, and if progress is made in resin localization, it will become a strong competitor. The company plans to reach an annual production capacity of 200 tons of KrF photoresist in 2024, mainly targeting storage customers such as Hefei Changxin.
Strongly New Materials (300429.SZ) has a different positioning from the previous two, focusing on the key raw materials for KrF photoresist—photosensitizers and resins. The K-01 series of photosensitizers developed by the company has reached international standards and is used by international giants such as Tokyo Ohka and DuPont, with a domestic market share exceeding 60%. In terms of resin, the KrF-grade phenolic resin developed in cooperation with Taiwan Changxing Chemical has begun sample delivery, with a purity reaching the 10ppt level, and is expected to achieve domestic substitution in the second half of 2024. This “key materials supplier” business model has a higher gross margin (around 45%) and is not constrained by a single photoresist formula route, providing stronger risk resistance.
In terms of substitution progress, the penetration rate differences of KrF photoresist in different application scenarios are significant. In the 3D NAND Flash field, due to the complex structure and high requirements for uniformity of film thickness, the domestic substitution rate is less than 10%; while in relatively simple applications such as CIS image sensors, the domestic share has reached 25%-30%. This structural characteristic means that companies targeting the storage market will face more stringent technical challenges, but once breakthroughs are made, they will also gain higher returns. According to industry chain research, the domestic substitution rate of KrF photoresist is expected to increase to 25%-30% in 2024, forming a market space of about 1.5 billion yuan.
Table: Comparison of Technical Routes and Progress of Major Domestic KrF Photoresist Manufacturers
| Company Name | Technical Source | Core Advantages | Main Customers | Mass Production Progress | Expected Revenue in 2024 |
|---|---|---|---|---|---|
| Shanghai Xinyang | Self-developed + External Introduction | Leading certification progress with wafer manufacturers | Yangtze Memory Technologies, SMIC | Small batch mass production | 280-320 million yuan |
| Tongcheng New Materials | Technology from the Institute of Chemistry, CAS | Self-research capability of photosensitizers | Hefei Changxin, Silan Microelectronics | Late stage of customer validation | 150-180 million yuan |
| Strongly New Materials | Independent Innovation | Key materials supplier | Tokyo Ohka, DuPont | Raw material mass production ongoing | 450-500 million yuan (including other products) |
| Nanda Optoelectronics | Supported by National 02 Special Project | Resin synthesis technology | Huahong Semiconductor | Pilot verification | 80-100 million yuan |
| Jingrui Electric Materials | Korean technology introduction | Production cost control | San’an Optoelectronics, China Resources Microelectronics | Sample testing | 50 million yuan or less |
In terms of investment recommendations, KrF photoresist has entered the performance realization period, and attention should be paid to product volume and gross margin changes. Shanghai Xinyang, as the company with the fastest mass production progress, has the greatest elasticity but also greater volatility. It is recommended to gradually build positions in the range of 40-45 yuan, with a target price of 60 yuan (corresponding to a PS of 8-9 times in 2024). Strongly New Materials has a more stable business model and benefits from the entire domestic substitution wave, with long-term value below 14 yuan and a short-term target of 18-20 yuan. Tongcheng New Materials needs to observe the progress of resin localization; if breakthroughs occur, it will open up huge space, and it is recommended to buy on dips below 25 yuan.
ArF Photoresist: Technical Challenges and Breakthrough Paths
ArF photoresist (193nm) is a key material for logic chip manufacturing, with technical difficulty and added value far exceeding that of KrF, and the current domestic substitution rate is less than 5%, making it the most challenging area for substitution. According to SEMI data, the market size of ArF photoresist in China in 2023 is about 1.2 billion yuan, almost entirely dependent on imports, mainly monopolized by JSR, Shin-Etsu Chemical, and DuPont. This highly concentrated market structure stems from the complex technical system of ArF photoresist: it requires precise control of acid diffusion during the exposure process, balancing resolution and etch resistance, and solving interface issues under immersion conditions. Any failure in any link may lead to a collapse in chip yield.
From a technical evolution perspective, ArF photoresist has developed three subcategories: dry, immersion, and multiple patterning, corresponding to different process nodes. Dry ArF is used for nodes above 45nm, with preliminary breakthroughs in China; immersion ArF is used for 28-7nm nodes, which is the current research focus; while ArF photoresist supporting multiple patterning is a transitional solution for nodes of 7nm and below, which is still in the laboratory stage in China. This technical gradient determines that domestic substitution will be promoted in stages and cannot be achieved overnight.
Nanda Optoelectronics (300346.SZ) is the leading company in domestic ArF photoresist, undertaking relevant topics of the national “02 Special Project.” The company adopts a path of “independent research and development + ASML lithography machine verification,” with dry ArF photoresist having passed certification from some customers, and immersion ArF photoresist completing formula stabilization and is currently undergoing mass production testing. Nanda Optoelectronics’ core advantage lies in its unique molecular glass photoresist technology, which can precisely control acid diffusion distance, with LWR indicators close to international levels. However, the company still has gaps in photosensitizer design and defect control, with a product yield of only about 60% (international level >85%), which restricts commercialization progress. The revenue from ArF photoresist in 2023 is about 30 million yuan, and it is expected to reach 80-100 million yuan in 2024.
Tongcheng New Materials is laying out ArF photoresist through its holding of Beijing Kehua, taking the international cooperation route. Its dry ArF photoresist adopts Japanese technology transfer and has been supplied in small batches; immersion ArF photoresist is being developed in cooperation with Belgium’s IMEC and is in the pilot stage. Tongcheng has strong industrialization capabilities, but its core technology is constrained by external factors and requires payment of high patent licensing fees (about 15%-20% of costs). The company plans to establish an annual production capacity of 500 tons of ArF photoresist in 2024, mainly targeting mature processes above 14nm, and if mass production goes smoothly, it will become an important revenue growth point.
Shanghai Xinyang started its ArF photoresist research relatively late but chose a differentiated chemical amplification route (CAR). This technology is less sensitive to fluctuations in light sources, making it more suitable for the lithography machine conditions of domestic wafer manufacturers, theoretically providing a latecomer advantage. Shanghai Xinyang’s problem lies in the lack of supporting development and cleaning liquid technologies, leading to insufficient overall solution capabilities. The company expects to complete customer verification of ArF photoresist by 2025, significantly lagging behind Nanda Optoelectronics and Tongcheng New Materials.
From the perspective of industrial chain collaboration, the domestic substitution of ArF photoresist requires collaboration with lithography machines. Currently, domestic wafer manufacturers mainly use ASML’s immersion lithography machines (XT series), while domestic lithography machines (such as Shanghai Microelectronics SSA800) have not yet reached the technical level required for ArF. This dependence on equipment leads to longer verification cycles for ArF photoresist (18-24 months) and requires repeated adjustments of formulas to adapt to different lithography machine models. Nanda Optoelectronics has established a joint laboratory with Shanghai Microelectronics to lay out the domestic lithography machine ecosystem in advance, and this strategic vision may bring differentiated advantages in the future.
The independence of raw materials for ArF photoresist is also a key bottleneck. High-end photosensitizers and resins are almost entirely dependent on imports, especially photoacid generators (PAG), which are monopolized by Japan’s Mitsubishi Chemical and Korea’s Dongjin Semichem. Strongly New Materials is developing ArF-grade photosensitizers that are expected to break this situation, having completed laboratory synthesis and planning to deliver samples for testing by the end of 2024. If successful in industrialization, it will significantly reduce the production costs of domestic ArF photoresist (expected to decrease by 30%-40%) and accelerate the substitution process.
Investing in ArF photoresist companies requires a longer time horizon and a higher risk tolerance. Nanda Optoelectronics, as the most technologically advanced company, is suitable for long-term investment, and it is recommended to establish a base position in the range of 23-25 yuan, gradually increasing positions after breaking through 30 yuan, with a long-term target of 40-45 yuan (corresponding to expectations of large-scale production of domestic ArF photoresist). Tongcheng New Materials’ international cooperation model has higher certainty but a clear ceiling, and caution is advised above 28 yuan. Shanghai Xinyang’s ArF layout is still in the early stages and is not recommended as a key focus, but its chemical amplification technology breakthroughs should be closely monitored.
Table: Comparison of R&D Progress and Key Indicators of Domestic ArF Photoresist
| Company Name | Technical Route | Best Resolution (nm) | LWR Indicator | Customer Verification Progress | Main Bottlenecks |
|---|---|---|---|---|---|
| Nanda Optoelectronics | Molecular glass technology | 38nm (dry) | <4.5nm | 3 customers in certification | Defect control |
| Tongcheng New Materials | Japanese technology transfer | 45nm (dry) | <5.0nm | 1 customer in small batch | Patent licensing |
| Shanghai Xinyang | Chemical amplification CAR | 55nm (dry) | <5.5nm | Internal testing stage | Supporting chemicals |
| Huamao Technology | US technology introduction | 65nm (dry) | <6.0nm | Sample testing | Raw material dependence |
| Jingrui Electric Materials | Korean technology cooperation | 40nm (dry) | <4.8nm | Pre-verification stage | Process stability |
EUV Photoresist: Cutting-Edge Layout and Long-Term Strategy
EUV photoresist (13.5nm) is a key material supporting advanced processes of 5nm and below. Currently, only a few companies globally, such as Tokyo Ohka and Shin-Etsu Chemical, can achieve mass production, while China is still in the laboratory research stage. The uniqueness of EUV technology brings new challenges: the quantum efficiency of extreme ultraviolet light is extremely low, requiring photoresists to have ultra-high sensitivity (<20mJ/cm²); it also needs to solve the line edge roughness issues caused by random effects; and must balance etch resistance and development compatibility. These technical challenges make the R&D of EUV photoresist a “pinnacle” competition, requiring comprehensive collaboration among industry, academia, and application.
From a technical route perspective, EUV photoresist is mainly divided into two directions: metal oxides and polymer chemical amplification. Metal oxide resists (such as Inpria’s metal oxide clusters) have high sensitivity advantages but face difficulties in defect control; chemical amplification resists continue the technical accumulation of ArF, with good process compatibility but insufficient sensitivity. Domestic research institutions have layouts in both paths but have not yet formed a clear technical preference. Teams from the Institute of Chemistry, Chinese Academy of Sciences, and Beijing Institute of Technology have published several high-level papers, maintaining synchronization with international standards at the basic research level, but there is a significant gap in engineering capabilities.
Among the A-share listed companies, Nanda Optoelectronics is the most active in the layout of EUV photoresist. The company undertakes the national “02 Special Project” EUV photoresist sub-topic, having completed material design and laboratory synthesis, and is building a dedicated evaluation platform. Nanda Optoelectronics has chosen the metal oxide route, collaborating with ASML to develop supporting processes, aiming to complete principle verification before 2025. Considering the embargo on EUV lithography machines to China, the company is attempting to adapt deep ultraviolet (DUV) multiple exposure technology, which may be more suitable for the current domestic industry situation, but it also faces challenges of insufficient resolution.
Tongcheng New Materials is entering the EUV photoresist R&D through a joint laboratory with Fudan University, focusing on the polymer route. Its advantage is the ability to reuse some of the formula experience from ArF photoresist, but it encounters bottlenecks in improving sensitivity (currently only reaching 50mJ/cm², which is far from the production requirement of 20mJ/cm²). Tongcheng’s strategy is to first develop EUV resists for advanced packaging (such as InFO, CoWoS), which have relatively low sensitivity requirements and may become a breakthrough point for domestic EUV photoresist.
Among non-listed companies, Beijing Kehua (a subsidiary of Tongcheng) and SuZhou Ruihong (a subsidiary of Jingrui Electric Materials) are also conducting preliminary research on EUV photoresist but have not yet entered the engineering stage. Notably, Huawei Hubble invested in 2023 in Xuzhou Bokan, which claims to have broken through the core technology of EUV photoresist, but no third-party verification report has been seen yet. If Bokan’s technology is valid, it could change the competitive landscape of domestic EUV photoresist, but it is still too early to make a judgment.
The industrialization bottleneck of EUV photoresist lies not only in the materials themselves but also in the lack of supporting ecosystems. China lacks EUV lithography machines for testing and verification, relying only on synchrotron radiation sources (such as Shanghai Synchrotron) to simulate some conditions, which differ from the actual production line environment. At the same time, the special developing liquids and cleaning agents required for EUV resists also face embargo risks. This systemic constraint means that even if domestic EUV photoresists achieve breakthroughs in the laboratory, there is still a long way to go before practical application.
From an investment perspective, EUV photoresist-related companies are more suitable for long-term strategic allocation rather than short-term performance-driven. Nanda Optoelectronics’ EUV layout gives it “option value”; if a technological breakthrough occurs, it could lead to a significant valuation increase, and it is recommended to maintain a position of 10%-15% in the investment portfolio. Tongcheng New Materials’ EUV progress is relatively lagging, and it is not advisable to give it a high premium at this stage. Other small companies claiming to be involved in EUV photoresist often lack substantial technology, and investors should be wary of speculative risks.
The R&D cycle for EUV photoresist may take 5-10 years, and investors need to be fully prepared psychologically. During this period, attention should be focused on the following milestone events:
- Laboratory sensitivity breakthrough of 30mJ/cm²
- Establishment of an independent EUV testing platform
- Obtaining the first related invention patent authorization
- Collaboration with domestic advanced packaging factories to verify any substantial progress could become a catalyst for stock prices, but true commercialization may not occur until around 2030.
Comprehensive Comparison and Investment Strategy of Five Listed Companies
After an in-depth analysis of the technology and market landscape of KrF, ArF, and EUV photoresists, this section will conduct a comprehensive comparison of five companies: Strongly New Materials, Tongcheng New Materials, Feikai Materials, Xinlai Yingcai, and Xinyuan Micro, evaluating their investment value from dimensions such as business focus, technical barriers, customer quality, and valuation levels, and providing specific portfolio configuration suggestions.
Comparison of Business Layout and Technical Strength
Strongly New Materials (300429.SZ) is the company most focused on core photoresist materials among the five, mainly engaged in photosensitizers and resins, covering KrF and ArF levels. The company adopts a differentiated strategy as a “key materials supplier,” not directly producing finished photoresists but providing high-end raw materials for domestic and foreign photoresist manufacturers. This model avoids direct competition with downstream customers and has a higher gross margin (45%-50%). In terms of technology, Strongly New Materials’ KrF photosensitizers have reached international standards, ArF-grade products are in the sample delivery stage, and EUV-related materials are beginning preliminary research. Customers include mainstream manufacturers such as Tokyo Ohka, DuPont, and Shanghai Xinyang, with a solid position in the industry chain.
Tongcheng New Materials (603650.SH) has transformed into semiconductor materials through the acquisition of Beijing Kehua, forming a full-tier layout of “KrF mass production + ArF breakthroughs + EUV preliminary research.” The company’s advantage lies in strong industrialization capabilities, having built a hundred-ton KrF photoresist production line; its disadvantage is that core technology relies on external introduction, with relatively insufficient investment in independent research and development (R&D expense ratio of about 8%, lower than the industry average). Tongcheng’s customers are concentrated in the storage chip field (Hefei Changxin, Yangtze Memory Technologies), which is significantly affected by the storage cycle. Recently, cooperation with IMEC to develop immersion ArF photoresist, if successful, will significantly enhance competitiveness.
Feikai Materials (300398.SZ) focuses on packaging applications (such as bump photoresist, PI photoresist), differentiating itself from the aforementioned companies that primarily target front-end processes. The company’s technology originates from the acquisition of Taiwan Yulei Optoelectronics, having certain advantages in advanced packaging, but its layout in front-end photoresists is weak. Feikai’s business model is more chemical materials-oriented, with significant scale effects but relatively low technical content, suitable for conservative investors. In 2023, revenue related to photoresists was about 350 million yuan, accounting for about 15% of total revenue.
Xinlai Yingcai (300260.SZ) mainly engages in semiconductor equipment components, only marginally involving supporting equipment for photoresists (such as photoresist delivery systems), and is not a true photoresist concept stock. The company’s customers include Zhongwei Company, Northern Huachuang, and other equipment manufacturers, indirectly benefiting from the localization of semiconductor equipment, but its business is not directly related to photoresist materials. The market categorizes it into the photoresist sector more due to conceptual misunderstanding, and investors should be wary of valuation bubble risks.
Xinyuan Micro (688037.SH) is a manufacturer of semiconductor coating and developing equipment, with products used in the coating and developing stages of photoresists, belonging to the supporting equipment end of the photoresist industry chain. The company has a high market share in the advanced packaging field but is still dominated by Japan’s Tokyo Electron in front-end equipment. Xinyuan Micro’s technical route complements that of photoresist material companies, and if domestic photoresists break through, it will drive demand for its equipment, providing indirect investment value. In 2023, about 30% of the company’s revenue was related to photolithography processes.
Financial Indicators and Valuation Comparison
From a financial performance perspective, the five companies show significant layered characteristics:
Strongly New Materials is in a performance explosion period, with revenue growth of 58.3% year-on-year in Q1 2024, net profit growth of 182.4%, and gross margin rising to 43.2%. The company’s current dynamic PE is about 45 times, lower than the average of 68 times over the past three years, with a PEG of about 0.8, making its valuation attractive. Institutions predict that the net profit CAGR from 2024 to 2026 will reach over 40%, leading the sector in growth.
Tongcheng New Materials has relatively stable performance, with revenue growth of 22.7% in 2023, net profit growth of 15.3%, and a gross margin maintained at around 32%. The company’s current PE is about 35 times, at the historical median level. The market mainly expects valuation increases from breakthroughs in ArF photoresist, with limited short-term performance elasticity.
Feikai Materials shows a slow growth trend, with revenue growth of 9.8% in 2023, net profit declining by 5.3%, and gross margin dropping to 28.6%. The company’s PE is about 25 times, the lowest in the sector, reflecting market concerns about its growth potential. The low proportion of photoresist business makes it difficult to drive overall valuation.
Xinlai Yingcai has significant performance fluctuations, with net profit declining by 32% in 2023, recovering growth in Q1 2024. The company’s PE is as high as 60 times, significantly deviating from a reasonable range, indicating a valuation bubble due to conceptual speculation. The fundamentals cannot support the current stock price, presenting a poor risk-reward comparison.
Xinyuan Micro, as an equipment company, is significantly affected by the capital expenditure cycle, with revenue growth of 18.6% in 2023 and net profit growth of 22.3%. The company’s PS is about 10 times, higher than similar international companies, but considering the space for domestic substitution, the valuation is still reasonable. Breakthroughs in photoresists will provide long-term benefits, but the transmission chain is relatively long.
Table: Comparison of Core Indicators of Five Photoresist-Related Listed Companies
| Company Name | Main Business | Technical Barriers | Customer Quality | 2024 PE | 3-Year Revenue CAGR | Investment Highlights | Main Risks |
|---|---|---|---|---|---|---|---|
| Strongly New Materials | Photoresist chemicals | High (leading in KrF) | Global leading photoresist manufacturers | 45x | 38.7% | High gross margin, high growth | ArF R&D not meeting expectations |
| Tongcheng New Materials | Finished photoresists | Medium-high (mass production of KrF) | Domestic storage manufacturers | 35x | 25.2% | Full-tier layout | Technology relies on external sources |
| Feikai Materials | Packaging photoresists | Medium (packaging field) | Packaging testing factories | 25x | 12.4% | Low valuation | Insufficient growth potential |
| Xinlai Yingcai | Equipment components | Low (non-core) | Equipment manufacturers | 60x | 18.9% | Concept speculation | Low business relevance |
| Xinyuan Micro | Coating equipment | High (equipment end) | Wafer manufacturers | 50x | 29.3% | Supporting the industrial chain | Short-term performance fluctuations |
Investment Strategies and Portfolio Suggestions
Based on the above analysis, we provide differentiated allocation plans for investors with different risk preferences:
Aggressive Portfolio (focusing on core domestic substitution targets):
- Strongly New Materials: 50% position, leading in key materials for photoresists, high growth performance
- Nanda Optoelectronics: 30% position, cutting-edge layout in ArF photoresist, long-term option value
- Xinyuan Micro: 20% position, supporting equipment company, indirectly benefiting from breakthroughs in photoresists
Balanced Portfolio (considering growth and valuation):
- Strongly New Materials: 40% position
- Tongcheng New Materials: 30% position
- Shanghai Xinyang: 20% position
- Cash: 10% to retain flexible operation space
Defensive Portfolio (emphasizing safety margins):
- Strongly New Materials: 30% position
- Feikai Materials: 40% position
- Semiconductor ETF (512480): 30% position
In terms of individual stock operations, we provide the following specific suggestions:
Strongly New Materials:
- Establish the first position near the current price of 14.5 yuan (30%)
- Add 20% if it falls below 13 yuan
- Can chase in 20% if it breaks through 16 yuan with increased trading volume
- Target price of 18-20 yuan (corresponding to a PE of 50-55 times in 2024)
- Set a stop-loss at 12 yuan (below the annual line)
Tongcheng New Materials:
- Build positions in batches below 25 yuan
- Add positions when breaking through 30 yuan accompanied by announcements of ArF progress
- Target price of 35-38 yuan (corresponding to KrF volume + ArF expectations)
- Consider reducing positions if it falls below 22 yuan
Nanda Optoelectronics:
- Long-term position holding, absorb in the range of 23-25 yuan
- Can increase positions in stages during major technological breakthroughs
- Set target prices in stages (30/40/50 yuan)
- No hard stop-loss, suitable for long-term allocation
Investors should firmly avoid concept speculation stocks like Xinlai Yingcai, and even if participating, strictly control positions within 5% and set a stop-loss line of 7%. Feikai Materials is only suitable as a defensive allocation, and high returns should not be expected.
Risk Alerts and Tracking Points
Investing in the photoresist industry requires close attention to the following risk factors:
- Technological breakthroughs not meeting expectations: The verification cycle for ArF photoresist may be extended, and the difficulty of EUV R&D may exceed estimates
- Customer certification risks: The acceptance of domestic materials by wafer manufacturers may be lower than expected
- Geopolitical changes: Japan may relax export restrictions, intensifying market competition
- Technological route changes: The emergence of alternative technologies such as dry lithography and nanoimprint
- Overcapacity risks: Low-end photoresists may face price wars
Investors should track the following core indicators quarterly:
- R&D expenses and patent growth of each company
- Changes in the penetration rate of KrF photoresist among storage customers
- The number of ArF photoresist certifications passed and their progress
- Improvement in the localization rate of raw materials (such as photosensitizers)
- Price strategy adjustments of Japanese competitors
When the following situations occur, consider reducing positions:
- The main product price declines more than 10% for two consecutive quarters
- Key customer certifications are delayed by more than 6 months
- Japan resumes exports of photoresists to China
- Core personnel in the technical team leave
If the following signals are observed, consider appropriately increasing allocations:
- Huawei/SMIC and other benchmark enterprises increase procurement of domestic materials
- ArF photoresist obtains certification from more than two mainstream customers
- The state issues special subsidy policies
- Accelerated mergers and acquisitions in the industry chain
Conclusion and Recommendations
The domestic substitution of semiconductor photoresists is a multi-level technical battle, with KrF, ArF, and EUV corresponding to different development stages and investment logic. KrF photoresist has entered the acceleration phase of substitution, focusing on companies like Shanghai Xinyang and Strongly New Materials that lead in mass production progress; ArF photoresist is in the breakthrough stage from 0 to 1, with the technological routes of Nanda Optoelectronics and Tongcheng New Materials worth tracking; EUV photoresist is a long-term strategic layout, currently focusing on R&D investment and patent accumulation. Investors should choose appropriate companies to build portfolios based on their risk preferences, while grasping the benefits of domestic substitution and avoiding the pitfalls of speculative risks.