EB SECURITIES: High Purity Quartz Sand Industry Welcomes the Dawn of "Equal Rights", Synthetic Quartz Sand May Fill in the Final Gaps.

EB SECURITIES released a research report stating that recently, China has discovered multiple high-purity quartz veins of 4N8 grade, which may alleviate the constraints on quartz enterprises' mineral resources, and the supply chain security risks in the semiconductor and photovoltaic industries are expected to be resolved. In the future, with the switch of mineral resources, downstream customers will need to re-validate, and quartz-related companies may enter a phase of "equal rights". Leading companies have the advantage of preparation experience and customer resources, and switching to domestic mineral resources may reduce costs in the short term. The price of synthetic quartz sand is high and has higher technical barriers. Some domestically produced trial products have achieved good validation results and may fill the last gap in the industry chain. Introduction: On April 10, 2025, the Ministry of Natural Resources announced that "high-purity quartz ore has become the 174th new mineral species in China." High-purity quartz ore is indispensable for industries such as semiconductors, photovoltaics, and China heavily relies on imports. In recent years, high-purity quartz ore has been discovered in various locations in Henan, Xinjiang, and other places in China. EB SECURITIES main points are as follows: High-purity quartz sand relies on imports, the core lies in mineral resources High-purity quartz sand is mainly used in the production of various materials and products for semiconductors (such as crucibles, quartz crucibles, quartz tubes, and quartz boats), photovoltaics (crucibles, front-end process devices), as well as in the mid-to-low-end fields of optical fibers and electro-optical sources. In recent years, China's imports of high-purity quartz account for about 70% of the global total: mid-to-low-end products can be self-sufficient and some are exported; however, high-end products still rely mainly on imports. Among them, 4N5 grade high-purity quartz sand is mainly imported, while raw materials of 4N8 grade and above are largely monopolized by U.S. companies such as Siltech. Leading companies like Jiangsu Pacific Quartz mainly rely on imports to solve the problem of raw material shortages. Breakthrough in domestic mineral resources solves the bottleneck problem The production of high-purity quartz sand is relatively mature but requires adaptation, adjustment, optimization, and iteration according to different mineral sources. The lack of stable and high-quality high-purity quartz raw materials that can meet industrial production needs is the fundamental reason why 4N8 grade high-purity quartz high-end products have not been localized. In recent years, academia has conducted in-depth research on the mineralization mechanism of high-purity quartz ore and successfully discovered high-quality ore of 4N grade and above in many parts of China. Some sources in the Dongqinling area of Henan Province have been stable and have batch-produced 4N8 grade high-purity quartz sand, meeting the IOTA-CG standard, suitable for the quality requirements of high-purity quartz sand for photovoltaics, with the potential to meet the IOTA-4 standard and be used in semiconductor process. In addition, 4N8 grade veins have been discovered in other areas of Henan, Xinjiang, Hunan, and elsewhere. Domestic synthetic quartz sand may fill the last gap: the price of high-purity quartz sand is directly related to its purity The purity of artificially synthesized quartz sand is the highest, and it can be used as a substitute in directions such as coating inside semiconductor single crystal furnaces, high-end optical glass, etc. As semiconductor chip linewidths become narrower, natural quartz materials can no longer meet the requirements of high-end production processes, and synthetic quartz will become an important component in the etching process of semiconductor chips below the 10nm process. In 2023, a research team compared a domestic prototype of synthetic quartz sand (which was not yet in production at that time), Mitsubishi quartz sand (synthetic quartz sand), and Siltech high-purity quartz sand, and concluded that the domestic sand had reached a level comparable to Mitsubishi's and could be used in applications such as coating inside semiconductor crucibles, quartz glass, etc. Risk analysis: Mineral development progress may not meet expectations, and competition is likely to intensify in the long term.