Semiconductor equipment can be roughly divided into three different sub markets based on market: wafer equipment, assembly and packaging equipment, and testing equipment. Among them, wafer equipment accounts for the majority. In 2021, wafer equipment accounted for about 86% of the majority of the semiconductor equipment market. The global wafer semiconductor equipment market can be further divided into four parts: logic, NAND, DRAM, and others; In recent years, the demand for packaging and testing equipment has increased due to significant investments from professional packaging and testing manufacturers such as Sunrise, Amkor, Changdian Technology, Tongfu Microelectronics, and Huatian Technology in the field of 2.5D and 3D advanced packaging. 

 According to SEMI's report, if viewed from the growth expectations of these three categories, the category of wafer factory equipment is expected to grow by 15.4% in 2022, reaching a new industry record of $101 billion and reaching $104.3 billion by 2023. The semiconductor test equipment market is expected to grow by 12.1% to US $8.8 billion in 2022, and the demand for High-performance computing (HPC) applications will increase by another 0.4% in 2023. Assembly and packaging equipment is expected to grow by 8.2% to $7.8 billion in 2022, and slightly decrease by 0.5% to $7.7 billion in 2023. 

 SEMI predicts that the total global semiconductor manufacturing equipment sales of original equipment manufacturers are expected to reach a record high of $117.5 billion in 2022, an increase of 14.7% from the industry peak of $102.5 billion in 2021, and an increase to $120.8 billion in 2023. 

 In this context, domestic semiconductor equipment manufacturers have also received industry dividends, and in the first half of the year, domestic equipment suppliers experienced good growth in terms of equipment winning bids and corporate revenue. 

 The growth of semiconductor equipment is closely related to the expansion of wafer factories, with 70% -80% of the capital expenditure for wafer factory expansion being spent on purchasing semiconductor equipment. Starting from last year, the shortage of chips has led to active expansion of domestic wafer factories. For example, Shanghai Jita Semiconductor has disclosed plans to spend more than 26 billion yuan to expand the production capacity of a 12 inch wafer factory in the Shanghai Lingang Economic Development Zone; Huahong Semiconductor raised 18 billion yuan to expand its production capacity at its Wuxi 12 inch wafer factory; The construction progress of Semiconductor Manufacturing International Corporation's three new 12 inch wafer fabs in Beijing, Shenzhen and Shanghai remained normal. These have all accelerated the demand for domestically produced equipment. 

 Therefore, in the first half of 2022, the bidding and procurement volume of domestic semiconductor equipment continued to grow. According to the statistics of Deppon Securities, from January to June this year, a total of 548 sets of equipment were opened by domestic mainstream wafer fabs, and 189 sets of equipment were manufactured by manufacturers in Chinese Mainland, accounting for 34.5%. These 548 equipment for bid opening mainly come from Huahong Wuxi (291 units), Shanghai Jita (210 units), Times Electric (16 units), Fujian Jinhua (23 units), Huali Integrated (6 units), and Huali Microelectronics (2 units). Among these bidding wafer factories, Shanghai Jita (126 units), Huahong Wuxi (45 units), Times Electric (8 units), and Fujian Jinhua (9 units) have the highest number of domestic equipment winning bids. Among them, Shanghai Jita has the highest domestic production rate, reaching 60%. 

 Specifically, among the 548 devices, there are 119 furnace tube devices, 97 deposition devices, 82 etching devices, 64 front detection devices, 46 rear test devices, 33 cleaning devices, 31 dry degumming devices, 28 ion implanter polishing devices, 21 polishing devices, 17 glue coating developing devices, and 10 Stepper devices. The link with a high domestic production rate is that the domestic production rate of dry debonding equipment is as high as 81%, etching equipment is 54%, polishing equipment is 43%, cleaning equipment is 58%, and adhesive developing equipment is 35.3%. The improvement of localization rate of domestic equipment is inseparable from the continuous development of Chinese Mainland manufacturers such as North Huachuang, Zhongwei, Shengmei Semiconductor, Xinyuan Micro, Yitang Semiconductor, Zhichun Technology, Huahai Qingke, etc. 

 The increase in the number of domestic equipment winning bids and the improvement in the localization rate of domestic wafer factories all reflect the thriving development of semiconductor equipment enterprises in mainland China. 

 In the first half of 2022, with the rapid development of electric vehicle industry, Big data and artificial intelligence, the demand for chip output is growing day by day. In addition, in recent years, the strengthening of domestic substitution awareness and willingness has provided strong space for the development of local semiconductor business. Therefore, domestic semiconductor equipment suppliers have achieved varying degrees of revenue growth in the first half of the year, and due to the large number of orders in hand, they also maintain confidence in the shipping prospects for the remaining time of this year. 

 From an overall category perspective, domestic equipment can basically cover the needs of various stages of semiconductor manufacturing. Especially outstanding in equipment such as etching, cleaning, and thin films. Local semiconductor equipment suppliers have entered the golden development cycle from the perspective of the pursuit of the primary and Secondary market and the outstanding performance of listed companies. 

 Northern Huachuang and Zhongwei Company are companies in the field of etching equipment, which is also the most advantageous semiconductor equipment field in China and has gradually entered a mature stage. Among them, medium etching of Zhongwei Company has entered TSMC's 5nm production line. North Huachuang has advantages in the field of ICP (Inductively coupled plasma) etching. Its 14nm plasma silicon etcher has successfully entered the mainstream project production line. 

 Northern Huachuang is expected to have a revenue of 5.05 billion to 5.77 billion yuan in the half year of 2022, an increase of 40% -60% compared to the same period last year. Zhongwei Company is expected to have a revenue of approximately 1.97 billion yuan in the first half of 2022, a year-on-year increase of approximately 47.1% (with a revenue of 1.34 billion yuan in the first half of 2021, a year-on-year increase of approximately 36.8%); The net profit ranged from 410 million to 450 million yuan, an increase of 565.42% to 630.34% year-on-year. The new orders were approximately 3.06 billion yuan, a year-on-year increase of approximately 62%. 

 Cleaning equipment supplier Shengmei Semiconductor had a revenue of 1.096 billion yuan in the first half of 2022, a year-on-year increase of 75.21%, and a net profit of 237 million yuan, an increase of 163.83% compared to the same period last year. The operating revenue of semiconductor cleaning equipment, front-end semiconductor electroplating equipment, and advanced packaging wet process equipment (including back-end electroplating equipment) has all increased significantly. 

 CMP equipment supplier Huahai Qingke expects a revenue of 680 million to 750 million yuan in the half year of 2022, a year-on-year increase of 131.60% to 155.44%. The net profit attributable to the owners of the parent company was 170 million to 195 million yuan, a year-on-year increase of 140.99% to 176.43%. 

 Semiconductor crystal growth equipment supplier Jingsheng Electromechanical is expected to have a net profit attributable to shareholders of the listed company of 1.08 billion to 1.25 billion yuan in the first half of 2022, an increase of 79.91% to 108.22% compared to the same period last year. 

 In addition, according to sources, semiconductor equipment manufacturers including Tuojing Technology and Xinyuan Micro, a supplier of adhesive development equipment, also saw significant revenue growth in the first half of the year, and the visibility of orders in the next 6-12 months is evident. 

 Many of these listed semiconductor equipment companies are established companies that have been struggling for more than a decade, and now they have finally managed to hold onto the bright future. Previously, in the evaluation of veteran domestic semiconductor equipment enterprises by Xinmou Research, it was mentioned that "pragmatic and stable industry leaders and technical teams are one of the keys to the success of semiconductor equipment enterprises. After decades of accumulation, they have withstood the test of the market. When industrialization opportunities come, these experienced and strong practical enterprises rise up 

 The vigorous development of the domestic equipment industry is not only reflected in the listed equipment enterprises, but also in the good progress of non listed equipment enterprises. 

 In the first half of 2022, Moore Elite's MEE-T series ATE testing equipment was successfully introduced into the mass production supply chain of three of the world's top ten analog chip manufacturers and more than ten domestic chip manufacturers. The MEE-T series ATE testing equipment is a mature and stable digital analog hybrid testing machine, specializing in various chip products such as mobile AP, MCU, PMIC, IoT, etc. During its peak period, the global installed capacity reached 3500 units. It is worth mentioning that the MEE-T series of testing equipment assisted an international simulation giant manufacturer, increasing the testing output efficiency of its main products by 6.7 times and improving stability by 413%. 

 Under the high demand and development prospects of domestic equipment, many start-up semiconductor equipment companies have also gained the favor of capital. 

 In February and May 2022, Beijing Tesidi Semiconductor Equipment Co., Ltd. received two strategic financing rounds, with investors including Hubble Investment. It focuses on the research and development, production, and sales of surface processing equipment in the semiconductor field, providing system solutions and process equipment for thinning, polishing, and CMP for semiconductor substrate materials, semiconductor devices, advanced packaging, MEMS, and other fields. On May 7, 2022, Honghu Semiconductor, an alumni enterprise of the University of Electronic Science and Technology of China and a supplier of wafer transmission equipment, completed a strategic financing round of tens of millions of yuan. 

 In the field of semiconductor testing equipment, on February 17, 2022, Jingji Micro Semiconductor completed a strategic financing of 300 million yuan, focusing on the research and development, as well as production and manufacturing of related products in the field of graphic defect detection equipment for open-field wafers; On February 15, 2022, Zhongan Semiconductor completed a round A financing of 200 million yuan. The company mainly provides services such as semiconductor wafer flatness testing equipment and three-dimensional morphology testing equipment; On February 11, 2022, Weichong Semiconductor completed a pre A round of financing worth tens of millions of yuan. The company is committed to developing material testing technology and producing semiconductor front-end testing equipment. 

 In the field of packaging equipment, on June 15, 2022, Jiyi Technology completed strategic financing for ZTE Venture Capital and others, with an undisclosed amount. Jiyi Technology's plasma equipment can be used for semiconductor chip packaging; In April 2022, Shenzhen Taiyan Semiconductor Equipment Co., Ltd. obtained a round A financing of tens of millions of yuan invested by Hechuang Capital. Taiyan Semiconductor is a semiconductor process and equipment service provider in the advanced packaging field, providing customers with complete laser+plasma+coating composite processes and process application equipment for advanced packaging production lines such as SiP, Fanout, Chiplet, 3D, etc. 

 In the entire semiconductor equipment industry structure, the front-end equipment accounts for about 85% of the total sales in the market, the back-end testing equipment accounts for 9%, and the back-end packaging equipment accounts for about 6%. In the past, sealing and testing equipment was almost monopolized by foreign manufacturers, but now with the changing international situation, the willingness of sealing and testing OAST manufacturers to choose domestically has significantly increased, which also provides opportunities for industrial cultivation and customer verification for domestic testing and packaging equipment. Combined with the current emphasis on capital, it may play a certain role in promoting the development of sealing and testing equipment in China. 

 China is the world's largest semiconductor equipment market, driven by rising demand for higher generation wage costs, process development, storage chip development, environmentally friendly production driven photovoltaic demand, LED, MEMS, power devices, and advanced packaging. In the next decade, China will become the center of global semiconductor chip manufacturing. From a historical perspective, the rise and growth of semiconductor equipment companies have migrated with global chip manufacturing centers. According to SIA data, under the situation of continuous and rapid expansion of wafer capacity in Chinese Mainland, by 2030, the proportion of wafer capacity in the world is expected to reach 24%. Therefore, it is expected that the market share of domestic equipment enterprises will steadily increase in the coming years. But in this upward process, greater support from semiconductor customers is indispensable.