The domestic lithography machine development process is accelerating.
Against the backdrop of profound changes in the global semiconductor industry landscape, China's lithography machine localization process has achieved major breakthroughs. On September 23, the 25th China International Industry Fair (CIIF) opened grandly at the Shanghai National Exhibition and Convention Center. At this industrial event, Advanced Micro-Fabrication Equipment made a spectacular debut with multiple flagship new products and successfully won the exhibition's highest honor - the "CIIF Grand Award" and "Integrated Circuit Innovation Achievement Award" with its outstanding technical capabilities. On the same day, Shanghai Micro Electronics Equipment (SMEE) publicly displayed parameter diagrams of extreme ultraviolet (EUV) lithography machines for the first time at their booth.
Today (September 24), the lithography machine concept continued to surge ahead, with concept leader Shanghai Zhangjiang Hi-Tech Park Development Co.,Ltd. (600895) hitting the daily limit and reaching a new historical high.
Acceleration of Domestic Lithography Machine Development
Sinolink Securities stated that both Shanghai Micro Electronics Equipment and Advanced Micro-Fabrication Equipment exhibited flagship products, representing significant "0-1" breakthroughs in the industry this year. Advanced packaging equipment has officially entered mass production, dry DUV will soon enter mass production testing phase, and domestic EUV has entered the prototype construction phase (this exhibition displayed an EUV proof-of-concept machine). The domestic lithography machine industry has entered its breakthrough year.
According to Huaxin Securities research report, with national policy support, domestic companies are accelerating R&D breakthroughs in lithography machine manufacturing technology. Currently, domestic lithography machines have made important progress in 90nm and below process nodes. For example, Shanghai Micro Electronics Equipment's independently developed 600 series lithography machines have achieved mass production at 90nm processes and are conducting R&D work on 28nm immersion lithography machines. Recently, the collaborative testing between Unic Technologies and SMIC represents an important signal of domestic lithography machine breakthroughs.
From an industry impact perspective, Huaxin Securities believes that lithography machine technology breakthroughs will drive upgrades in upstream materials, precision machinery and other supporting industries, accelerating the localization process of "chokepoint" materials such as photoresist and optical components, forming an industrial upgrade pattern of "leading companies driving multi-point breakthroughs."
600895 Reaches New High
Under the influence of the above positive factors, lithography machine concepts continued to surge in early trading today, with Shanghai Zhangjiang Hi-Tech Park Development Co.,Ltd. hitting the daily limit and reaching a new historical high. According to September 10, 2024 investor interaction information, Shanghai Zhangjiang Hi-Tech Park Development Co.,Ltd. invested 223.45 million yuan in Shanghai Micro Electronics Equipment through its subsidiary Shanghai Zhangjiang Haocheng Venture Capital Co., Ltd., holding 10.779% equity in Shanghai Micro Electronics Equipment, with no subsequent increases or decreases.
According to Wavelength Opto-Electronic's internal revenue classification, lithography machine-related business belongs to the company's semiconductor and pan-semiconductor revenue category. Products mainly include reflectors, focusing lenses, field lenses and other optical components, as well as parallel light sources and some small optical systems, with application scenarios including proximity mask lithography, direct-write lithography, packaging testing, and semiconductor measurement.
According to the 2024 annual report, Jiangfeng Electronics' R&D project for semiconductor multi-layer thin-wall titanium alloy diffusion welding has developed multi-layer titanium alloy diffusion welding technology to manufacture core cooling components for lithography machines at 28nm and below nodes, which has entered mass production phase.
According to Huaan Securities research report, Advanced Micro-Fabrication Equipment's WLP 2000 wafer-level direct-write lithography equipment has received repeat orders from leading customers and has been shipped. This equipment can achieve 2μm line width/space (L/S), providing customers with 2.xD packaging lithography process solutions. The company's PLP3000 panel-level direct-write lithography equipment, with its 3μm L/S capability, has provided high-performance lithography solutions for Yangtze River Delta customers, further consolidating its competitive advantage in specialty process fields.
These Potential Stocks Ready to Take Off?
Huaxin Securities research shows that China has large demand for lithography machines but extremely low localization rates. For a long time, China has faced "chokepoint" difficulties in high-end lithography machine fields. The United States began pressuring exports of high-end lithography machines to China as early as 2018, subsequently introducing the "1007 New Rules" and other targeted policies to restrict exports of advanced process chip equipment to China, including EUV lithography machines and advanced DUV lithography machine models. They also collaborated with Japan and the Netherlands to establish related export regulations for joint industrial blockade against China.
Sinolink Securities stated that it is estimated that complete machines will soon enter production line verification, with i-line front-end lithography machine verification nearing completion. Upstream core companies have potential opportunities for additional orders, suggesting to seize this round of main uptrend market conditions.
Among A-shares, there are over 40 lithography machine concept stocks, with promising future development prospects. From institutional attention perspective, Advanced Micro-Fabrication Equipment, Jiangfeng Electronics, Fuchun Precision, and Lante Optics all have ratings from over 10 institutions; Tongfei Co., Ltd., GLMicro, MAT Technology, and Han's Laser all have ratings from over 5 institutions.
From growth perspective, institutional consensus forecasts show that Fuchun Precision, Tongfei Co., Ltd., GLMicro, Han's Laser, Morelens, Hwatsing Technology, and Focuslight Technologies will all have net profit growth rates exceeding 30% in 2026 and 2027; Advanced Micro-Fabrication Equipment, Jiangfeng Electronics, Lante Optics, Novel Optics, and Huate Gas will all have net profit growth rates exceeding 20% in 2026 and 2027.
Some stocks have also gained favor from leveraged funds. Data shows that Technovator, Advanced Micro-Fabrication Equipment, Focuslight Technologies, and Wavelength Opto-Electronic have all seen net leveraged fund inflows exceeding 100 million yuan since September.
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