Hong Kong stock concept tracking | Electronic grade hydrofluoric acid and isopropanol prices rise in the short and medium term, high-end G5 grade product supply and demand may continue to be in tight balance (with concept stocks)

Semiconductor electronic chemical manufacturers have started to raise prices. With the high demand for AI-related chips leading to a surge in upstream material demand, upstream chemical raw materials such as fluorite, sulfuric acid, and propylene have continued to rise in price due to the impact of Middle East geopolitical conflicts and tightening global chemical production capacity, and cost pressures are being transmitted from the top to the semiconductor electronic chemical end. Electronic grade hydrofluoric acid and electronic grade isopropanol (IPA) have simultaneously raised prices, and top chemical manufacturers such as Formosa Plastics and Shinyei have confirmed price adjustment plans one after another. It is reported that Formosa Plastics Group is an important supplier of G5 electronic hydrofluoric acid and electronic grade isopropanol in the Asia-Pacific region, ranking second only to Japanese and Korean giants. They supply a large quantity to Taiwanese and mainland wafer factories and are an important alternative source for mainland manufacturers. Shinyei is a core local supplier of electronic grade isopropanol for TSMC. Formosa Plastics Group's electronic grade hydrofluoric acid (HF) and electronic grade isopropanol (IPA) have both increased in price. Formosa Plastics stated that the main raw materials for electronic grade hydrofluoric acid are sulfuric acid and fluorite, and the prices of these two raw materials have been steadily increasing recently, so they will "moderately adjust" the selling price of electronic grade hydrofluoric acid products in the third quarter; the price of propylene, the main raw material for electronic grade isopropanol, has also increased, and this cost increase will be reflected in the market as well, gradually entering a phase of price adjustment. Shinyei stated that they had already raised prices in the second quarter to deal with the rising cost of raw materials, and they will continue to closely monitor the price trends of raw materials. They do not rule out the possibility of further price increases in the third quarter to reflect costs. Electronic grade hydrofluoric acid and electronic grade isopropanol are both key materials in wafer manufacturing, used in GPUs, HBMs, and advanced processes below 2nm. Electronic grade hydrofluoric acid is a core material for wafer etching and surface cleaning, compatible with high-performance chips such as 2nm-14nm advanced processes, GPUs, HBMs, etc. It has extremely high purity levels (G5 grade, with 7N-11N ultra high purity), with control of metal impurities reaching the ppt level, and high technological, certification, and capacity barriers. Electronic grade isopropanol is a key cleaning solvent for semiconductor lithography, packaging, and PCB precision manufacturing, capable of removing surface micro particles and organic contaminants to maintain yield in advanced processes. Analysis points out that compared to general chemical products, electronic grade hydrofluoric acid and electronic grade isopropanol must have extremely high purity levels, and need to undergo lengthy verification and customer certification before being introduced into wafer plants. Once they obtain the supply qualification, the supplier relationship is usually relatively stable, with high technological barriers and bargaining power. Regarding electronic grade hydrofluoric acid, the global high-end G5 market has long been dominated by Japanese companies (StellaChemifa, Morita), but their main facilities have been in service for a long time and have low expansion intentions, leading to limited growth in high-end supply; although many domestic companies (Do-Fluoride New Materials, Zhejiang Juhua, Binhe Group, Zhejiang Sanmei Chemical Industry (joint venture with Morita New Materials)) have achieved mass production of G5 grade, high-end capacity in the medium term still struggles to match the rapidly growing semiconductor demand, maintaining a tight balance between supply and demand. As for electronic grade isopropanol, overseas companies (Desun Chemical, Sumitomo Chemical (global G5 technology benchmark)) still dominate the high-end market, while Chinese local manufacturers (Jiangyin Jianghua Micro-electronic Materials, Danoor, Crystal Clear Electronic Material, Zhejiang Xinhua Chemical, Xilong Scientific, etc.) are accelerating capacity expansion and technological upgrades, steadily advancing the process of localization. Huatai believes that although many companies have achieved mass production of G5 grade products, the high-end product capacity still struggles to meet the rapidly growing demand for semiconductors in China, and in the medium term, the supply and demand of high-end G5 grade products may continue to remain in a tight balance. Related concept stocks: DONGYUE GROUP(00189): With the production capacity of anhydrous hydrofluoric acid (AHF) basic raw materials and layout of G5 electronic grade hydrofluoric acid; also supports electronic fluoride solution. Befar Group(06745): One of the few domestic companies to achieve mass production of G5 electronic grade hydrofluoric acid, with a G5 capacity of about 6000 tons per year. SINOPEC CORP(00386): One of the largest producers of propylene in China, propylene is the most core raw material for producing isopropanol, accounting for over 70% of production costs, and is an important supplier of propylene raw materials for the vast majority of isopropanol factories in China (Wanhua, Satellite, various IPA refined enterprises).