Not Just Oil in Short Supply Amid Middle East Tensions! Which Semiconductor Material Companies Have a Chokehold on Global Tech?

Advanced materials are the foundation and physical limit of all high-end technologies. For example, the more advanced the semiconductor process, the higher the requirements for material purity, electrical conductivity/resistivity, and yield. Due to the accumulation of know-how in cutting-edge materials, patent barriers, and lengthy customer certification cycles, companies with first-mover advantages and core product categories are more likely to become evergreen stocks. 

Moreover, recent geopolitical disruptions have made supply chain security issues increasingly severe, making these companies more valuable for their scarcity. Moomoo Insights has compiled nearly 10 niche semiconductor material sectors, covering over 30 companies. Among them, companies in wet electronic chemicals and specialty gases sectors show better competitive landscapes and financial performance.

Semiconductor core materials include:

High-End Photoresists

Photoresists are the most core, sensitive, and technically challenging chemical materials in chip manufacturing, functioning similarly to photocopying circuit patterns onto wafers. Their chemical formulas are extremely complex: thousands of combinations of resins, photo-acids, solvents, and additives, with ultra-high purity requirements at the ppt (parts per trillion) level. The market size is about $7 billion annually. Globally, only Japan's JSR, $Tokyo Ohka Kogyo (4186.JP)$/(TKCYY), $Shin-Etsu Chemical (4063.JP)$ (SHECY), and $FUJIFILM Holdings (4901.JP)$ (FUJIY) can stably supply EUV photoresists. Among U.S. companies, $DuPont de Nemours Inc(DD)$   is one of the few producing photoresists, with a certain say in EUV and packaging photoresists, deeply tied to the U.S. domestic supply chain, ranking as the world's fourth-largest supplier with about 15% market share. DuPont doesn't disclose photoresist revenue separately; estimates based on market share suggest it accounts for 5-10% of their revenue.

Third-Generation Semiconductor Materials (SiC/GaN/InP)

Third-generation semiconductor materials like SiC silicon carbide and GaN gallium nitride are often used in power and RF chips, offering advantages such as high breakdown voltage, good thermal conductivity, high voltage and temperature resistance. They are mainly applied in new energy vehicle inverters (SiC), fast charging, power supplies (GaN), radar, and other fields. Representative companies include $Navitas Semiconductor (NVTS.US)$ (tied to $NVIDIA (NVDA.US)$ ), $Coherent (COHR.US)$ , and Japan's ROHM.

Downstream are mainly RF and power chip giants, such as Infineon sourcing from $Wolfspeed (WOLF.US)$ , and $ON Semiconductor (ON.US)$ self-sufficient in silicon carbide.

Meanwhile, indium phosphide, commonly used in optical communication, is also a third-generation semiconductor material, known for low noise and high thermal conductivity. The leading company is $Sumitomo Electric Industries (5802.JP)$(ADR: SMTOY) . The related U.S. stock is $AXT Inc (AXTI.US)$ which produces and sells indium phosphide substrates and gallium arsenide through Beijing Tongmei.

Silicon Germanium (SiGe) Materials, Silicon on Insulator

Although the silicon wafer industry is the largest segment in semiconductor consumables, the traditional silicon wafer industry with Japanese Shin-Etsu and $SUMCO (ADR) (SUOPY.US)$ is highly competitive. The development direction of mainstream silicon wafers is twofold: one is new materials adding germanium to silicon wafers, and the other is silicon on insulator (SOI).

(1) Silicon Germanium (SiGe) offers advantages of extremely high frequency and low noise. Major foundry companies include Israel's $Tower Semiconductor (TSEM.US)$ specializing in power semiconductors, and U.S. company $GlobalFoundries (GFS.US)$. Main applications are in RF chips such as automotive 4D millimeter-wave radar, and silicon photonics complementary electronic chips also rely on SiGe.

The main material suppliers for these two companies are UK's $IQE PLC UNSP ADR EA REPR 25 ORD GBP0.01 (IQEPY.US)$ and France's $SOITEC S.A. (SLOIF.US)$ .

(2) Silicon on Insulator (SOI) offers advantages in power saving, stability, and radiation resistance. It's mainly used in satellites, aerospace, and mobile phones. Due to its complex sandwich structure, its price is over 5 times that of ordinary silicon wafers. The main suppliers are Soitec and Japan's Shin-Etsu and SUMCO.

Nano-level Polishing Materials

Polishing materials mainly include polishing slurries and pads. Polishing slurries primarily consist of nano-alumina, cerium oxide, and nano-silica, used for wafer planarization, removing post-lithography residues and surface defects. The main company in this field is $Cabot (CBT.US)$ , specializing in the production of polishing slurries and materials. Currently, the company is the world's largest supplier of CMP polishing slurries and the second-largest supplier of CMP polishing pads. In the polishing pad sector, the main manufacturer is $Dow Inc (DOW.US)$, with a market share exceeding 70%. However, this revenue accounts for a very small proportion of Dow Chemical's total.

Other Wet Electronic Chemicals

Besides polishing slurries, wet electronic chemicals include etching solutions, cleaning solutions, and developers. U.S. company Entegris is one of the leading companies focused on this field. Wet chemicals are one of its core growth engines. Other related companies include $DuPont (DD.US)$ , $Honeywell (HON.US)$ , $Dow Inc (DOW.US)$ , $Eastman Chemical (EMN.US)$, $Element Solutions (ESI.US)$ , and Japan's Kanto Chemical.

Specialty Gases

Specialty gases are one of the most important consumables in the semiconductor industry, used throughout deposition, lithography, etching, doping, and cleaning processes. Fluorine-containing gases are mainly used for etching, while silicon-containing gases are primarily used for deposition. Additionally, there are rare gases: neon (Ne), krypton (Kr), and xenon (Xe) used in lithography, which are high in value. Related companies: $Entegris (ENTG.US)$ , $Linde (LIN.US)$ , $Air Products & Chemicals (APD.US)$, and France's $Air Liquide SA Unsponsored ADR (AIQUY.US)$ .

Photomasks

Photomasks are high-precision quartz or glass plates with tiny opaque patterns etched on them, used to transfer circuit designs onto semiconductor wafers through lithography. They are one of the semiconductor consumables with the most extreme requirements for precision, purity, and flatness. $Photronics (PLAB.US)$ is North America's largest and globally top-three independent third-party photomask manufacturer. Other companies include Japan's $Toppan Holdings (ADR) (TOPPY.US)$ and $Dai Nippon Printing (ADR) (DNPLY.US)$ .

Carbon Nanotubes (CNT)

Carbon nanotubes are 100 times stronger than steel, only 1/6 the weight, and 10,000 times more electrically conductive than copper, possessing both metallic and semiconductor properties. CNTs also have transparent and flexible properties, used in flexible displays, touch screens, and electromagnetic shielding. The global market is expected to reach $600 million by 2025 and over $5.5 billion by 2034.

The key stock is $SkyWater Technology (SKYT.US)$, the only company with CNT chip mass production capability. Other related companies include $Cabot (CBT.US)$ and $Ingevity (NGVT.US)$. However, the latter two companies mainly use CNT in the field of conductive additives for power batteries, with less application in semiconductors.

ABF and LCP Films

ABF film, invented and monopolized by food company $Ajinomoto (ADR) (AJNMY.US)$ , is used in semiconductor packaging due to its good insulation and thermosetting properties. LCP is characterized by extremely low water absorption and is commonly used in iPhone antenna flex boards and millimeter-wave radar. Related companies include $Murata Manufacturing (ADR) (MRAAY.US)$ and U.S. engineering plastics leader $Celanese Corp (CE.US)$.

Other materials include:

Sputtering targets, used for metal thin film deposition on wafers, with $Honeywell (HON.US)$ as the main company.

Precision ceramics: $Entegris (ENTG.US)$ , mainly for electrostatic chucks and insulating parts; $MKS Inc (MKSI.US)$, mainly for vacuum and pressure sensing equipment and process control, including ceramic chambers, highly tied to companies like $Applied Materials (AMAT.US)$ .

Fluorides: used for sealing and corrosion resistance. The main company is $The Chemours (CC.US)$.

$NVIDIA (NVDA.US)$ , $Advanced Micro Devices (AMD.US)$ , or $Apple (AAPL.US)$ chips, as well as foundries like $Taiwan Semiconductor (TSM.US)$ and $Intel (INTC.US)$ , all rely on various semiconductor manufacturing materials provided by the above companies. It is these indispensable advanced materials that form the foundation for AI development.

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