(Report Producer: Zheshang**).
Domestic leading enterprise of quartz sand and quartz products, photovoltaic + semiconductor two-wheel drive. Quartz Co., Ltd. was formally established in 1992 and is a high-end quartz material deep processing enterprise integrating scientific research, production and sales. In recent years, the company has continued to promote the R&D, production and certification of electronic-grade semiconductor quartz products, and the semiconductor business has developed steadily. The company's key semiconductor quartz products include quartz tubes (rods), quartz cylinders, quartz ingots, quartz plates, etc., and its market position and technical level rank in the forefront of the industry.
Benefiting from the explosion of photovoltaic and semiconductor terminal demand, the company's performance has achieved rapid growth. From 2020 to 2022, the company achieved total revenue. 0.4 billion yuan, a year-on-year increase. 62%；Realize net profit attributable to the parent company. 5.2 billion yuan, a year-on-year increase. 48%。The main driving factor of the company's revenue and profit growth in recent years is the rapid development of the photovoltaic and semiconductor industries to stimulate the demand for high-purity quartz materials. From 2023Q1 to Q3, the company's revenue was 590 billion yuan, a year-on-year increase of 37827%；Net profit attributable to the parent company 420.7 billion yuan, a year-on-year increase of 63832%。
The rapid expansion of photovoltaic and semiconductor businesses drove the company's revenue growth. In 2022, the company's operating income in the photovoltaic industry, optical fiber semiconductor industry and light source industry were respectively. 2.8 billion yuan, accounting for respectively. 45%。Among them, the revenue growth of the photovoltaic industry was driven by the demand of the photovoltaic market, with a year-on-year increase of 30594%, driving the company's revenue growth; The revenue growth of the optical fiber semiconductor industry benefited from the increase in the revenue of semiconductor products, with a year-on-year increase of 2311%, the company's semiconductor quartz product sales grew rapidly, and the market influence gradually expanded. The profitability of the photovoltaic and semiconductor businesses has risen steadily. From 2020 to 2022, the gross profit margin of the company's photovoltaic segment was as follows: 50%；Mainly due to the high demand for photovoltaic downstream to promote the company's products, superimposed on the company's high-end products gradually increased, the company's photovoltaic sector gross profit margin increased significantly. From 2020 to 2022, the gross profit margin of the company's optical fiber semiconductor industry was as follows: 88%, the company's semiconductor sector quartz product sales have achieved rapid growth, the market influence has gradually expanded, and the profitability of the optical fiber semiconductor sector business has continued to improve. From 2020 to 2022, the gross profit margin of the company's light source segment will be. 79%；The main reason is that the company's light source business is relatively mature and the industrial chain continues to be optimized.
The shareholding structure is concentrated, and the business of subsidiaries is clear. As of 2023Q3, the direct and indirect shareholding ratio of Mr. Chen Shibin, the actual controller, chairman and general manager of the company, is 4924%, the company's equity is relatively concentrated. At the same time, the company has a total of 7 subsidiaries (including indirect shareholdings), of which Lianyungang Pacific Jinhao quartz products are mainly engaged in the production and sales of natural crystal powder and its quartz products; Lianyungang Pacific Jinsha Quartz *** The main business is the manufacture and sale of quartz products.
The repurchase of shares is intended to be used for equity incentives, employee stock ownership, and the improvement of the long-term incentive mechanism. On November 17, 2023, the company issued an announcement, pointing out that Chen Shibin, the controlling shareholder and actual controller of the company, proposed that the company repurchase shares of not less than 100 million yuan and not more than 200 million yuan for equity incentives or employee stock ownership plans. The buyback plan demonstrates the company's management's confidence in the company's future development and recognition of the company's value, and at the same time helps the company improve the long-term incentive mechanism and mobilize the enthusiasm of employees.
2.1 High-purity quartz is a key consumable for semiconductors, and the technical barriers are high
High-purity quartz has outstanding physical and chemical properties and is an important raw material for the semiconductor industry. High purity quartz is silica with a purity greater than 999% of quartz sand series products are the general name of quartz glass, silicon materials and related industries. High-end quartz materials have excellent physical and chemical properties such as stable chemical properties, low impurity content, good light transmittance, high temperature resistance, radiation resistance, strong crystallization resistance, high hardness, small thermal expansion coefficient, good electrical insulation, and corrosion resistance to almost all acids (except HF). In addition, high-end quartz products have strict requirements for product purity and particle size. Specifically, high-end products are required to have a silica content greater than 99998%, the total content of impurity elements must be less than 20 10-6, so its quality requirements for natural quartz ore are much higher than other grades of products.
The preparation methods of quartz glass are differentiated according to the different raw materials. For quartz glass made of natural crystal or quartz sand, it is generally prepared by electrofusion method and gas refining method; Synthetic quartz glasses made of silicon tetrachloride generally use chemical vapor deposition. Specifically, the electrofusion method is divided into continuous electrofusion and vacuum electrofusion, compared with the fused silica material, the electrofusion silica material has better temperature resistance, lower hydroxyl content, and lower cost. Therefore, electrofusion products are mainly used in high-temperature areas such as diffusion of semiconductors, while gas-melted products are used in low-temperature processes such as etching. In the synthesis method: 1) the direct synthesis method has high hydroxyl content, but low impurity content, which is suitable for downstream use as optical materials; 2) Indirect synthesis and plasma chemical vapor deposition (PCVD) can be used to prepare quartz materials with low hydroxyl content.
High-purity quartz sand is the main raw material, and quartz materials and quartz products are widely used in the semiconductor field. The upstream of the quartz industry is quartz sand, and only Unimin in the United States, TQC in Norway and Quartz in China have the ability to mass-produce high-purity quartz sand on a large scale. The midstream of the industry is quartz materials and quartz products, among which the main suppliers of quartz materials are Momentive, Heraeus, Dongcao Quartz, Quartz Co., Ltd., Philip, etc., and the mainstream suppliers of quartz products include Heraeus Xinyue, Hangzhou Yamato, Shenyang Hanke, Philip Shichuang, Kaide Quartz, etc., and foreign-funded enterprises occupy a higher market share; The downstream of the industry is semiconductor equipment and wafer manufacturing, and the market share of Chinese-funded enterprises is low, and there is a large space for domestic substitution.
According to the different working environment temperatures, the semiconductor quartz product process can be divided into high-temperature process and low-temperature process. Among them, the high-temperature process includes diffusion, oxidation, etc., and the low-temperature process includes photolithography, etching, cleaning, etc., etc. The main products involved in the high-temperature process include quartz flanges and quartz diffusion tubes. Since quartz products need to work continuously for several hours in an environment of more than 1000 meters in a high-temperature process, they should have the characteristics of high temperature resistance, good thermal stability, and not easy to deform. At the same time, because the hydroxyl group changes the bond and structure of silica, the main component of quartz products, reduces the thermal stability of the material, and the temperature resistance of quartz products is greatly reduced, so the quartz products used in high-temperature technology need to be dehydroxylated. In addition, the performance requirements of high-temperature process for quartz products also include corrosion resistance, good light transmittance, and low impurity content. The products involved in the low-temperature process include quartz glass crucibles, quartz glass substrates, quartz bell jars, quartz boats, etc. Compared with the high-temperature process, the working environment temperature of the low-temperature process is lower, and there is no requirement for the high-temperature resistance and hydroxyl content of the quartz material. In the low-temperature process, the performance requirements of quartz products are mainly corrosion resistance, good light transmittance, and low impurity content.
Quartz materials and quartz products play an important role in semiconductor oxidation, etching, diffusion and cleaning.
1) Oxidation: The function of the oxidation process is to form a protective film on the surface of the wafer, and the quartz flange is used for the oxidation equipment connection. The first step in the oxidation process is to remove impurities such as organic matter, metals, and residual water from evaporation. The wafer is then subjected to a high temperature of 800-1200 °C, and a silica layer is formed by the flow of oxygen or steam across the surface of the wafer. Oxygen diffusion reacts with silicon through the oxide layer to form oxide layers of different thicknesses, the thickness of which can be measured after oxidation is complete. The oxidation process effectively protects the wafer from chemical impurities, prevents leakage current from entering the circuit, prevents diffusion during ion implantation, and prevents the wafer from slipping during etching. Due to the characteristics of quartz flange with corrosion resistance and high temperature resistance, it is used in the connection of high-temperature furnaces to ensure stability and reliability in the manufacturing process.
2) Etching: Etching is one of the core technologies to determine the characteristic size of integrated circuits, and quartz rings have a protective effect. Etching process refers to the transfer of the photoresist micropattern on the surface of the semiconductor silicon wafer to the lower film material of the photoresist, and selectively etching off the part of the lower material of the photoresist that is not masked by the photoresist. The high-purity quartz ring plays a protective role in the etching process, and it is combined with the quartz gate to achieve airtight protection of the cavity, closely surrounding the wafer, and preventing the etching process from being polluted.
3) Diffusion: Diffusion is a basic doping technology, and quartz products play a role in carrying and protecting. The diffusion process incorporates a certain amount and a certain type of impurities, such as phosphorus, boron, etc., into silicon wafers or other crystals to change their electrical properties to form semiconductor devices. Quartz tubes are made of extremely pure quartz materials, which have excellent high temperature resistance and corrosion resistance. In semiconductor diffusion furnaces, quartz tubes protect the reaction atmosphere and reactants. Quartz furnace equipment is divided into two types: horizontal type and vertical type. Wherein the wafer is placed on the quartz boat in the horizontal furnace tube, and the quartz boat is placed on the silicon carbide bearing frame, and the carrier frame is advanced into the quartz furnace tube, and the wafer reacts in the constant temperature zone; In the vertical furnace, the wafer is placed on a quartz tower and then slowly rises into the quartz furnace for processing.
4) Cleaning: The cleaning process runs through the entire semiconductor production process, and quartz products are mainly used for bearing. In the production of silicon transistors and integrated circuits, cleaning is carried out almost entirely throughout the production process. The cleaning process ensures that the next process step is not interfered with by impurities, and effectively maintains the product yield. The number of cleaning processes accounts for one-third of the steps in the entire chip manufacturing process, which is an important part of chip manufacturing. In the cleaning process, because it is in direct contact with the liquid medicine, it is necessary to use acid-resistant and alkali-resistant quartz devices, wherein the quartz flower basket is responsible for carrying silicon wafers, and the quartz cleaning tank is responsible for carrying washing, and the cleaning tank is usually equipped with cleaning agent and has an ultrasonic generating device.
2.2. The demand prospect of the semiconductor market is strong, and the domestic substitution space of quartz products is broad
The global semiconductor industry has grown steadily, and the scale of semiconductor quartz products continues to expand. From 2020 to 2022, the global semiconductor product market size will be 100 million US dollars, a year-on-year increase. 17%。According to data from IDC and other institutions, the chip market demand will be weak in 2023, the process of inventory consumption will continue, and the scale of the semiconductor industry will face downward pressure, but with the gradual recovery of smartphone demand and its strong demand for chips, the market is expected to improve in 2024.
China's semiconductor equipment sales are on an upward trend, and the global share is steadily increasing. From 2020 to 2022, the sales of semiconductor equipment in China will be. $700 million, year-over-year. 2%、-4.6%。The proportion of China's semiconductor equipment sales in global sales has steadily increased, and the proportions from 2020 to 2022 are respectively. 9%、 26.3%, which is the world's largest semiconductor equipment sales market. With the application and development of many innovative technologies such as the Internet of Things, blockchain, automotive electronics, and unmanned driving, China's semiconductor industry is expected to maintain a high degree of prosperity, semiconductor equipment sales are expected to grow further, and the expansion of downstream semiconductor equipment demand will also promote the growth of demand for semiconductor quartz products.
The ** deficit of integrated circuits remains high, and there is a large space for domestic substitution. Semiconductor core material technology has the characteristics of high barriers, low domestic self-sufficiency rate, and the market is monopolized by manufacturers such as the United States, Japan, Europe and South Korea. In 2022, China's integrated circuit import value will be 4162$4.6 billion, down 394%。In contrast, China's integrated circuit export value in 2022 is only 1546$6.7 billion, up 010%。In 2022, the export deficit of integrated circuits will reach 26157.9 billion yuan, down 6 percent year-on-year18%。As of October 2023, China's integrated circuit import value in 2023 is 2849$8.2 billion, down 1895%；Export amount 1106$1.1 billion, down 1486%；Export deficit of 17437 billion yuan, down 21 percent year-on-year35%。China still has a high dependence on overseas semiconductors, and there is still a lot of room for domestic substitution. After the Sino-US trade war in 2019 and the Wassenaar Agreement in 2020 restricted the overseas supply of semiconductor equipment and materials to China, the localization process of the semiconductor industry accelerated, and the semiconductor industry is expected to break the status quo of overseas monopoly and promote the rapid development of the quartz glass industry.
In 2024, the scale of global quartz products will be about 39 billion yuan, a year-on-year increase of 1312%。According to the announcement of CapitaLand Quartz Company and the forecast of WSTS, the sales volume of global semiconductor products (The Worldwide Semiconductor Market) from 2022 to 2024 will be 100 million US dollars, and the corresponding scale of semiconductor quartz products will be 100 million yuan, respectively, and according to the calculation of 65% of the market share in the semiconductor field according to the prospectus of CapitaLand Quartz, the overall scale of quartz products will be about 100 million yuan, a year-on-year increase respectively. 12%。
2.3. The competition pattern is stable, and the breakthrough of certification barriers and the localization of quartz sand are the development trends
The proportion of overseas enterprises is relatively high, and the certification of domestic enterprises continues to break through. The leading enterprises in the foreign quartz material industry are mainly Momentive Quartz, Heraeus Quartz, Dongcao Quartz, etc., and the related enterprises have strong technical strength and are the leaders of high-purity fused silica products. The leading enterprises in the domestic quartz material industry are Quartz Co., Ltd. and Philip Hua, among which the main products of Quartz Co., Ltd. include high-purity quartz sand, high-purity quartz tube, quartz crucible and other quartz materials; Philip products are concentrated in the middle and lower reaches of quartz materials, mainly in the domestic aerospace field. In terms of quartz products, Heraeus Shin-Etsu and Hangzhou Daiwa Thermomagnetic Electronics, the Chinese subsidiaries of overseas leading enterprises, have a relatively high market share of quartz abroad; Philip's subsidiary, Philip Stone Creation, has gradually become a leading supplier of quartz products with competitive advantages.
Due to the high requirements for consumables for semiconductor preparation, the consumables of quartz products have two major barriers: certification and industrial chain.
1) Certification barriers: Downstream semiconductor equipment manufacturers have high requirements for quartz materials, and certification barriers are high. Semiconductor equipment manufacturers will qualify high-purity quartz sand, quartz glass material manufacturers and quartz device processors, and only the best commercial products that have passed the qualification certification are eligible to enter the first chain system of downstream equipment manufacturers. The certification cycle for high-end products is usually 1-2 years, and the process is relatively complex. Whether the product can pass the certification is the core element of whether it can successfully scale up and improve the downstream penetration rate. Therefore, in the future, domestic quartz materials and quartz products manufacturers will actively promote the certification progress of the world's major semiconductor equipment manufacturers, enhance their competitiveness, and improve their market share.
Overseas quartz enterprises have a significant first-mover advantage, and the certification progress is ahead of China. Major international semiconductor equipment manufacturers have strict screening standards for the quartz products used in their equipment, and the certification process of downstream semiconductor customers is the key condition for quartz material manufacturers to enter the mainstream system. Foreign quartz materials and quartz products enterprises and their subsidiaries in China, including Heraeus Shin-Etsu, Hangzhou Daiwa, Shenyang Hanke, etc., have passed the certification of international semiconductor equipment manufacturers. In contrast, the certification progress of domestic quartz enterprises is relatively slow, and at present, only quartz shares have passed the semiconductor certification in the field of tel diffusion, and Philip has passed the semiconductor certification in the field of tel etching.
2) Industrial chain barriers: quartz sand is an important raw material for the production of semiconductor quartz materials, and the requirements for each index are high. Industrially, quartz sand can generally be divided into ordinary quartz sand, refined quartz sand, high-purity quartz sand, fused silica sand, etc. Different types of quartz sand have different purities and impurity content, and the application field is also affected by its characteristics. Among them, the semiconductor field has high requirements for quartz sand, and a purity of 99 is usually usedMore than 998%, high-purity quartz sand with a single alkali metal (potassium, sodium, lithium) content of less than 1ppm as raw material.
The uneven distribution of global quartz ore sources provides natural advantages for the monopoly of leading enterprises. The global high-purity quartz ore raw material segment is located in Brazil, the United States, Canada, Norway, Australia and other places, with a total of 15 deposits. The Baigang Deposit, located in the Spruce Pine mining area of North Carolina, USA, has a strong resource barrier because of its extremely low content of quartz impurities and large resource stock (more than 10 million tons of detected resources), which is difficult for other countries to find deposits of the same quality and reserves. At the same time, the mineral is the only unique granite pegmatite high-purity quartz deposit discovered in the world so far, which can provide high-quality high-purity quartz raw materials for production enterprises for long-term stability. Unimin, which owns the mining rights of this deposit, and TQC of Norway have become the world's leading companies in high-purity quartz sand with this high-quality deposit.
The global high-purity quartz production capacity is concentrated, and Unimin, TQC, and quartz shares are the main leading companies. At present, only a few companies in the world, such as Unimin, Norway TQC and Quartz Co., Ltd., have the ability to mass-produce quartz sand that can be used in the semiconductor and photovoltaic fields on a large scale. The high-purity quartz sand produced by Unimin is mined from high-quality granite pegmatites from the Spruce Pine deposit in North Carolina, USA, and once controlled 90% of the global high-purity quartz sand market, with an absolute advantage; TQC of Norway produces high-purity quartz sand in Spruce Pine and Western Norway in North Carolina in the United States; Quartz continues to promote the certification of quartz sand links, and is expected to successfully break through the upstream barriers in the future and enhance its industry status and competitiveness.
3.1 The semiconductor business is developing rapidly, and the diversification of the product matrix has significant advantages
The rapid development of the company's semiconductor business is expected to become a new growth point for the company's performance. From 2020 to 2022, the operating income of the company's semiconductor field business was as follows: 7 billion yuan, a year-on-year increase. 11%。The decrease in revenue in 2020 was mainly due to the decline in revenue of quartz products for optical fiber and solar energy. From 2021 to 2022, benefiting from the rapid increase in demand for semiconductor quartz materials, the company's semiconductor sector quartz products are in short supply, driving a significant increase in revenue.
The trend of product diversification is obvious, covering multiple links in the semiconductor field. The company has a wide range of semiconductor quartz products, from semiconductor high-purity quartz sand to quartz ingots and quartz tube rods. Related products can be used in oxidation, diffusion, etching, cleaning and other links in the semiconductor manufacturing process, and the product characteristics are outstanding. Among them, the opaque series and the perfect quartz series of new products are widely praised by the market. The company continues to promote a variety of quartz products for semiconductors. In order to expand downstream customers and provide customers with integrated solutions. At the same time, the continuous enrichment of the product matrix will also help to increase the sales of the company's semiconductor quartz products and expand the company's market share of semiconductor quartz materials.
Continue to promote the expansion of production capacity of semiconductor quartz products, which is expected to promote the process of domestic substitution. In recent years, the company has continued to build production capacity for electronic-grade quartz materials, and the production lines of electronic-grade quartz products, quartz stone, and semiconductor-grade high-purity quartz sand have gradually reached production. The continuous expansion of production capacity is conducive to expanding the company's market share of quartz materials in the semiconductor industry, promoting the process of domestic substitution of related products, and providing new impetus for the company's performance growth.
3.2. The certification progress is ahead of the industry, and it is the first to realize domestic substitution
The company's certification progress is leading in the industry, and the advantages of customer development are obvious. Quartz Co., Ltd. is the third in the world and the first in China to pass the certification of Tokyo Electron in the field of high temperature diffusion, the certified products adopt continuous electrofusion process, the technical barriers are high, the certification is difficult, and the certification progress is ahead of the industry; Philips is a domestic seller that has obtained the first-class certification of semiconductor original equipment manufacturers, and its certification field is mainly concentrated in the field of low-temperature etching; CapitaLand's quartz product certification is mainly based on domestic manufacturers. Quartz has more advantages than the other two companies in terms of certification progress and difficulty, and is expected to enhance the application space and market share of the company's semiconductor quartz products in the downstream semiconductor industry.
The certification process has been steadily progressing to help the company's semiconductor business development. Thanks to the company's core technology of fused silica production, the company's continuous fusion production of a series of products including quartz tubes, quartz rods, quartz cylinders, etc., have passed the certification of semiconductor manufacturers, and the technology is internationally leading. The company's quartz tubes, rods, and ingots for semiconductors passed the semiconductor certification of the diffusion link of Tokyo Electron (TEL) in 2019 and the etching link certification in 2021. In 2020, the company passed the etching quartz certification from LAM. The certification of semiconductor equipment manufacturers will help the company's semiconductor business to further develop, which is expected to develop a broad global market, strengthen the application and promotion of the company's new products, and enhance market awareness.
3.3. The quality of quartz sand has been continuously improved, breaking through the upstream bottleneck link
The company's purification technology for different mineral sources has been continuously improved, and the quality of quartz sand has been continuously improved. The company has long been committed to the innovation and research and development of high-purity quartz sand production technology, and the technical level has been continuously improved, the stability of product quality has been effectively improved, and the technology has reached the international advanced level. At present, the semiconductor quartz sand produced by the company is characterized by low iron content and low alkali metal content, and the quartz glass produced by using this type of quartz sand has fewer defects such as bubbles, gas lines, and color lines. Actively promoting the technological innovation and research and development of high-purity quartz sand is conducive to the company's comprehensive application of high-end quartz materials in the semiconductor field, enhancing the recognition of tourists and enhancing the company's competitiveness.
Continuously improve quartz ore purification technology and optimize product performance. Compared with TQC and Unimin, which have long been monopolized, the natural deficiency of the company's quartz sand lies in the raw material source**. The granite pegmatites in the Spruce Pine area of the United States are rare high-quality quartzite in the world, and the company has established stable cooperation with high-quality mineral sources in India, Brazil and other overseas regions through long-term agreements and other means, and continues to promote the update and iteration of quartz sand purification technology.
The scale of production and sales continued to grow, and the proportion of export sales continued to increase. From 2017 to 2022, the company's high-purity quartz sand production increased steadily, and the company's high-purity quartz sand sales volume in 2022 was 3620,000 tons, a year-on-year increase of 5316%。At the same time, the company continued to expand the volume of quartz sand for export under the condition of maintaining the stability of the volume of self-supplied quartz sand, and the proportion of export of quartz sand continued to increase.
The company actively expands the production capacity of quartz sand and enhances the best advantages. In recent years, the company has actively expanded the production scale of existing high-purity quartz sand. At present, under the condition that 20,000 tons of quartz sand production capacity has been realized, the company is steadily promoting the construction of 60,000 tons of high-purity quartz material project, which is expected to be put into operation by the end of 2023, which will further ensure the self-supply of raw materials for the company's quartz products and reduce production costs.
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