Semiconductor Materials and Equipment Industry Innovation Needs Policy Assistance

Since 2010, China's integrated circuit market has entered a new round of growth, but the pace of market growth will not reproduce the rapid growth of previous years, and steady growth will become the main theme of the development of China's integrated circuit market in the future. The speed of development of China's integrated circuit market will remain above 10% in the next three years. Therefore, domestic integrated circuit materials and equipment companies should seize the opportunity and strive to innovate, make breakthroughs in key materials and equipment, and meet the needs of the domestic market.

According to the SEMI report, the semiconductor equipment market in Mainland China in 2010 was US$2.24 billion and is expected to be US$2.64 billion in 2011. If calculated according to such growth rate, by 2015, the scale of China's semiconductor equipment market will reach 30 billion yuan. According to industry analysts, during the “12th Five-Year Plan” period, as China continues to increase support for strategic emerging industry policies, the semiconductor equipment industry will usher in a rare opportunity for historical development. The support of “02” major science and technology projects, the development of emerging industries such as new energy and new materials, and the large demand for discrete devices with a wide range of products have created a good market opportunity for the further development of semiconductor materials and equipment companies.

According to analysis by industry experts, due to the stimulus from government subsidies and rising demand in new application areas, such as LCD TV backlighting and general lighting, China's LED market will double from 2009 to 2014, with a compound annual growth rate of 12.8%. Power semiconductors are widely used in a variety of devices in fields such as home appliances, computers, automobiles, and railways. As these applications are expected to expand in popularity and the proportion of these devices equipped with power semiconductors will increase, the power semiconductor market is expected to grow steadily in the future. It is estimated that the power semiconductor market will reach 36.8 billion U.S. dollars in 2013. Equipment materials companies should have a good harvest in these areas.

However, the reality is that the overall strength of domestic semiconductor equipment and materials companies is still relatively weak, and it still needs the strong support of the government to grow. To this end, industry insiders call for the state to give policy support to R&D and industrialization of semiconductor equipment and materials companies. For the semiconductor materials industry, at present, the tariff rate for imported polysilicon is 2%, while imported silicon wafers are tax-free; some materials such as quartz crucibles, transport boxes, and silicon polishing cloths are important auxiliary materials for semiconductor companies. Due to technical reasons, there are currently no production companies in the country and they have to rely on imports. However, they are not specifically classified as semiconductors in the current customs tariff, but are classified as ordinary plastic products and other industrial glass products. The import tax rate is high. This has led to the large use of domestic silicon wafer companies, tax burden, and is not conducive to competition with foreign semiconductor companies. It is suggested that the tentative tax rates for imports and exports should be adjusted and these policies that are not conducive to the development of the industry should be amended as soon as possible In addition, the state should also focus on supporting several typical enterprises, relying on their leading role in stimulating the development of the entire basic industry.

As semiconductor materials and equipment companies, they should work together to pay close attention to market changes in real time, accelerate the pace of product structure adjustment, strengthen R&D investment, accelerate the training and introduction of high-end talents, further improve the innovation system featuring enterprises as the main body, and vigorously improve independent innovation capabilities. Limited resources have been devoted to solving critical, common, and basic problems and jointly formulating comprehensive policies and measures, which have enabled China's semiconductor equipment and materials industry to develop steadily and rapidly.

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