CITIC Construction Investment: Focus on the pace of certification and investment opportunities for domestic semiconductor materials companies to accelerate import substitution

The Zhitong Finance App learned that CITIC Construction Investment Securities released a research report saying that AI inflation is currently on the material side, while the targets of the material sector are more scattered, and most of the powerful companies are in Japan, and the tension in bilateral relations has accelerated since the second half of 2025. Supply-side imports replaced, and demand-side AI inflation became an almost perfect combination. There will be more room for interpretation on the topic of import substitution in Japan. Continue to pay attention to semiconductor material import substitution transactions, and pay attention to the pace of certification and investment opportunities for domestic semiconductor material companies to accelerate import substitution.

The peak export season is here, and silicon wafers surged last week. On August 21, the Silicon Industry Branch of the China Nonferrous Metals Industry Association announced the latest silicon wafer prices. Downstream demand increased, and silicon wafer prices rose sharply last week. The average transaction price of N-type G10L monocrystalline silicon wafers (182*183.75mm/130 μm) was 1.12 yuan/sheet, up 40.00% from last week; the average transaction price of N-type G12R monocrystalline silicon wafers (182*210mm/130 μm) was 1.14 yuan/piece, up 26.67% from last week; N-type G12 monocrystalline silicon wafers (210*210 mm/130 μm) averaged 1.22 yuan/sheet, up 10.91% from last week. The main reason for the sharp rise in silicon wafer prices last week was the increase in downstream demand. Specifically: Although domestic terminal demand is average, due to the 232 policy, overseas cell companies are speeding up the procurement of silicon wafers during the window period in order to avoid risks. At the same time, India's traditional peak installation season is approaching, driving a concentrated release of demand for silicon wafer export orders. Increased demand, compounded by the market sentiment of buying up or down, the market showed a tight supply situation in the short term, driving up silicon wafer prices.

The EU's mandatory blending policy continues to be implemented, and the pace of expansion of the global SAF market has further accelerated. According to reports, the latest data from leading European airlines shows that the actual SAF blending ratio of IAG Group, Air France-KLM, and Ryanair reached 3.3%, 2.9%, and 2.0% respectively in the 2025-2026 fiscal year. The overall SAF usage scale of European airlines has already surpassed the total SAF usage scale of all US airlines. The core factor driving the difference is the mandatory blending regulations implemented by the European Union and the United Kingdom. The policy side clearly indicates that the SAF blending ratio in the UK will rise to 3.6% in 2026. The rigid growth in demand in the European market will drive the long-term rise in global sustainable aviation fuel premiums. Leading domestic companies with bio-aviation fuel and e-SAF technology reserves are expected to usher in a growth window for overseas export orders. At the same time, industrial demonstration effects in overseas markets will also drive up expectations for the implementation of domestic blending policies. Industrial chain links such as upstream biomass raw materials, green hydrogen synthesis, and SAF refining and chemical engineering are all catalyzed by medium- to long-term prosperity.

SK Hynix announced a large repurchase plan. On August 19, SK Hynix announced a share repurchase and total cancellation plan worth 40 trillion won (US$28.6 billion), the highest in the history of a Korean listed company. According to the announcement submitted by SK Hynix to the Korea Exchange, the repurchase amount is 40.0043 trillion won, which is equivalent to about 24.07 million shares, based on the closing price of 16.62 million won on the day before the board resolution, accounting for 3.3% of the company's total issued shares. The repurchase plan is expected to be implemented starting August 20. The period is about three months. After completion, all repurchased shares will be cancelled.

The two ministries and commissions issued the “Fifteenth Five-Year Plan” for the Construction of New Electric Power Systems. On August 3, the National Development and Reform Commission and the National Energy Administration issued a notice on the “15th Five-Year Plan for the Construction of New Electric Power Systems”, which provides plans for the “15th Five-Year Plan” development goals for power systems and various types of power sources. According to the document, by 2030, a new power system will be initially completed: a green and low-carbon electricity supply pattern will basically be formed, and non-fossil energy will account for 50% of power generation, achieving a high level of consumption of more than 2.8 billion kilowatts of new energy. In terms of new energy, the plan proposes to determine the guiding target for the utilization rate of new energy by region, and the national energy utilization rate remains around 90%.

The Ministry of Industry and Information Technology issued the “15th Five-Year Plan” for industrial green and low carbon: green power applications in the industrial sector have entered a period of large-scale acceleration. On July 31, the Ministry of Industry and Information Technology officially issued the “15th Five-Year Plan” for Green and Low-Carbon Industrial Development (Ministry of Industry and Information Technology Regulation (2026) No. 169), which lays out a road map for the green transformation of the industrial sector during the “15th Five-Year Plan” period. In this document, green energy is placed at an unprecedented strategic height — from energy use structural transformation to industrial space layout, from microgrid construction to a direct green power connection model, the industrial sector is becoming the next main battleground for new energy consumption. The plan is clear. By 2030, carbon dioxide emissions in the industrial sector will peak, and the proportion of green energy applications will increase significantly. The energy consumption of industrial units above scale will drop by more than 10%, carbon dioxide emissions will be reduced by more than 17%, the output value of green factories at all levels will increase from 30% to 45% in the total output value of manufacturing above scale in 2025, and the number of zero-carbon factories cultivated and built will reach 500.

The “15th Five-Year Plan for Renewable Energy Development” was released, setting targets such as a total installed capacity of 3.5 billion kilowatts of renewable energy power generation, 2.8 billion kilowatts of wind power generation and 6 trillion kilowatt-hours of annual power generation, and proposed reliable alternative targets for the first time: the average confidence output of scenery reached 8%, the peak wind power generation in summer and evening, accounting for more than 20%, and the “15th Five-Year Plan” added more than 300 million kilowatts of reliable peak power generation capacity. Deploy the “Three North” base to add 370 million kilowatts of installed capacity, start 100 million kilowatts of offshore wind power, add 300 million kilowatts of distributed new energy, and make it clear that in principle, the confidence output of the newly built centralized wind and power stations will not be less than 10%.

Samsung unveiled its first AI smart glasses, and the Android XR wearable ecosystem accelerated. On July 22, Samsung Electronics unveiled the first AI smart glasses at the Galaxy Unpacked 2026 press conference in London, equipped with a Qualcomm Snapdragon AR1 Gen1 chip, using Google Android XR as the underlying operating system, integrated Gemini AI assistant, and a built-in camera that supports real-time visual perception. The battery life is up to 9 hours at a time. It is scheduled to be launched in the fall of 2026. This product is the first consumer-grade lightweight wearable commercial launch on the Android XR platform. It forms direct competition with the Meta Ray-Ban series. It is expected to accelerate the penetration of AI eyewear categories and drive demand growth in the industry chain for low-power AI chips, optical modules, and acoustic devices.

The first sub-stage of the world's first “marine network recycling” rocket was successfully recovered. At around 12:00 on July 10, 2026, China Aerospace ushered in a historic moment — the Long March 10B carrier rocket was ignited at station 2 of the Hainan commercial space launch site and successfully completed a network recycling mission at sea. This is the first time that China has successfully implemented the first sub-stage controlled recycling of a launch vehicle, and it is also the first time in the world that a launch vehicle network system has been recycled. This feat marks a major breakthrough in China's reusable launch vehicle technology. In the next 3 years, China's commercial aerospace launch costs are expected to drop by about 50%. The global space competition pattern will shift from being dominated by unipolar to parallel bipolar between China and the US, and related materials are expected to benefit.

Focus on material choices under import substitution transactions. AI inflation has reached the material side, and the targets in the materials sector are more scattered, and most of the powerful companies are in Japan, and the tension in bilateral relations since the second half of '25 is showing signs of acceleration. Supply-side imports replaced, and demand-side AI inflation became an almost perfect combination. We judge that the import substitution theme will have more room for interpretation. Japanese semiconductor materials companies have a high share of the global semiconductor materials market. According to our statistics, 14 out of 19 major materials have the highest market share. On the one hand, there is the expansion of demand brought about by industrial trends, and on the other hand, the supply substitution logic brought about by strained relations between countries. Import substitution of key materials is expected to be further interpreted. We have selected the current market segments where Japanese companies have a high market share and focus on investment opportunities brought about by the acceleration of domestic substitution: photomask versions, blank mask versions, semiconductor precursors, CMP polishing pads, photoresists and monomers, ceramic powders, InP substrates, PI films, high-end fluorine materials, wet electronic chemicals, large silicon wafers, etc.

Wet electronic chemicals: Driven by AI demand, the localization rate is expected to increase again. Wet electronic chemicals are mainly used in wet processes such as cleaning, etching, imaging, and peeling in the manufacture of electronic devices such as semiconductors and display panels. They have undergone strict purification, have extremely low impurity content, and have high technical barriers and customer stickiness. On the demand side, AI-driven advanced processes and applications such as 3D NAND are rolled out, and the unit consumption of wet electronic chemicals is expected to increase significantly. On the supply side, the current global wet electronic chemicals are still dominated by foreign investors such as Japan, Germany, the US, etc., and the localization rate in the G5 high-end market is still less than 30%. Furthermore, China's wet electronic chemicals industry relies on the stable supply of upstream general chemical raw materials, combined with the rapid expansion of downstream domestic storage, logic chip production capacity, and accelerated customer verification. It is expected that the product structure upgrade and localization rate increase in China's G5 high-end wet electronic chemicals industry will continue to be realized.

Japan has a high monopoly on ArF photoresist monopolies, and localization is expected to accelerate. Photoresist resin monomers have been monopolized by Japanese companies for a long time, and the risk of supply cuts is prominent. Even Japanese photoresist companies will outsource monopoly on monomers. Therefore, breakthroughs in the localization of photoresist cannot fully guarantee autonomy and control; only import substitution of monomers can guarantee the reliability of domestic supply. As far as monomers are concerned, the key is purity and batch stability. Resin monomers for G-line, I-line, and KrF photoresists can already be initially domesticated. ArF photoresist resin monomers are in the bottleneck stage, and 70% of the global supply is controlled by Osaka Organic Chemical. Once supply is cut off, advanced manufacturing processes will face a shortage of raw materials, so import substitution of ArF photoresist resin monomers is a necessary condition to ensure the continuous development of the domestic semiconductor industry chain.

Driven by AI demand, the MLCC nanoceramic powder boom reversed. The AI server was upgraded from GB300 to Vera Rubin/Rubin, and automotive electronics were expanded under electrification/800V/advanced intelligent driving. High-end MLCCs experienced bottlenecks and were transmitted upstream to barium titanate powder/formula. AI grade powder particle size is 100-300nm, and higher consistency and batch stability are required. The price of AI-grade powders is also significantly higher than traditional powders; at the same time, high-end formula relies on rare earth mixing systems. Under rare earth export restrictions and the supply chain security game between China and Japan, there is uncertainty about the expansion of production and closed supply in the Japanese system. A few domestic suppliers with the capacity to mass-produce high-end MLCC medium powders, such as Sinocera, are expected to fully benefit from the growing demand for MLCC high-end powders in the AI era.

Fluorine materials: Performance drives the explosion of AI & semiconductor application scenarios, and is a good choice for import substitution. PFA: Because of its extremely low metal ion precipitation characteristics and strong acid and alkali corrosion resistance, it can be used for etching tanks, cleaning tanks, CMP components, heat exchanger linings during semiconductor etching and cleaning, as well as wafer carriers and CVD reaction chamber coatings during wafer transfer. It is expected that with the improvement of advanced manufacturing processes, demand for PFA will grow significantly. On the supply side, high-end semiconductor-grade PFA is mainly monopolized by overseas companies Chemu and Dajin. Juhua Co., Ltd. recently put into production 10,000 tons of ultra-pure PFA, and is the first domestic company to break the price of 600,000/ton. Electronic grade PTFE: Because it has extremely low DF values and dK values, PTFE is currently the most ideal resin material for high-frequency, high-speed CCL substrates. Since PTFE is significantly cheaper than other materials and has superior superposition performance, it is expected to usher in a high-speed release period. FEP: High-end FEP can also be used as a protective layer for optical fibers and semiconductor wet cleaning pipelines. High-end high-purity electronics/semiconductor grades need to be imported from companies such as Chemus, Daikin, and Asahi Glass.

With the rapid development of advanced semiconductor manufacturing processes, new energy sources, and high-frequency communication, the fluorine-containing polymer materials industry is being upgraded. Since fluorine-containing polymer materials have strong C-F bonds, their properties are extremely stable and have excellent corrosion resistance, chemical stability and dielectric properties. In semiconductor 1) PFA, the full name of fusible polytetrafluoroethylene, is a high-end modified version of PTFE. PFA has become an irreplaceable key material in advanced semiconductor processes due to its extremely low metal ion precipitation characteristics and strong acid and alkali corrosion resistance. PFA can currently be used in etching tanks, cleaning tanks, CMP components, heat exchanger linings in semiconductor etching and cleaning processes, as well as wafer carriers and CVD reaction chamber coatings during wafer transfer. The price of high-end products in the semiconductor field can reach the 600,000/ton price range. Currently, the global semiconductor market demand is about 20,000 tons, and domestic demand is about 6,000-7,000 tons. It is expected that with the improvement of advanced manufacturing processes, demand for PFA will grow significantly. The global PFA production capacity is mainly overseas. Recently, Juhua Co., Ltd. achieved autonomous mass production of 10,000 tons of ultra-pure PFA, making it autonomous and controllable, and there is broad scope for import substitution. 2) FFKM, the full name of perfluoroether rubber, is an upgraded version of fluororubber FKM. In the molecular structure of FFKM, carbon-fluorine bonds replace all carbon-hydrogen bonds, and have excellent ultra-high temperature resistance, extreme gas-liquid chemical corrosion resistance, rich plasma corrosion resistance, and ultra-high cleanliness. It is the variety with the best comprehensive performance among all synthetic rubbers, and is an indispensable sealing material in advanced semiconductor processes. Currently, the total global demand is about 200 tons, and it is monopolized by overseas giants such as Comus, Daikin, Solvay, and DuPont.

AI+ drones drive the optical fiber industry chain, and the material side is expected to enjoy a sharp rise in volume and price. AI big model training is driving the data center network architecture from traditional three-layer convergence to a fully interconnected leaf-spine architecture, and the shift of data traffic from north-south access to east-west interconnection within GPU clusters. In order to meet the demand for non-blocking, low-latency communication, the fiber consumption of a single rack or single GPU is growing rapidly. Furthermore, the rapid expansion of drone capacity has also made optical fiber a consumable material. Driven by demand for AI+ drones, products such as upstream optical fiber materials silicon tetrachloride, silicone D4, optical fiber coatings, and para-aramid are expected to usher in a sharp upward trend in volume and price.

Demand for high frequency and high speed, such as computing power, is growing rapidly, and electronic grade PTFE is expected to be used on a large scale. PTFE material is known as the “King of Plastics” because of its main characteristics including excellent thermal stability, chemical resistance, and dielectric properties. Demand for PTFE downstream military, high-speed cable, and high-speed board is expected to grow rapidly. As the Rubin Ultra mass production node for Nvidia's next-generation server approaches, the industry is actively discussing the possibility of using PTFE materials as orthogonal backplates, and domestic Shengyi Technology is actively cooperating to verify it. We believe that as demand for high-frequency high-speed transmission continues to grow, led by computing power infrastructure, etc., the downstream field of PTFE is expected to be redefined.

Pay attention to the certainty of downstream expansion, decentralization and value increase in the precursor industry. Precursor products benefit from a large cycle of downstream production capacity expansion, and have high performance and strong certainty of growth. Downstream fabs such as Hynix plan to double the production capacity of the fab over the next 5 years, and Changxin also has plans to expand production capacity close to doubling by 2030. Based on the critical role of precursor products in the manufacturing process and the subsequent process of increasingly microscopic/high-end chip manufacturing, we believe that leading companies in the industry have the possibility of higher and downstream bargaining and changes in value under product category iteration.

The rapid development of AI has led to a wave of MLCCs being out of stock. With the rapid development of the artificial intelligence industry, the MLCC load capacity of AI servers has increased dramatically compared to ordinary servers due to huge power consumption. According to the China Securities News, the increase has more than tripled, and supply constraints have intensified due to a surge in demand. Electrification, intelligence, and connectivity have become trends in the automotive industry. With the increase in control modules, the amount of MLCCs used for bicycles has also increased markedly.

SEMI said semiconductor demand will continue to surge despite being affected by the Middle East crisis, trade uncertainty and raw material shortages. Driven by AI data centers, global semiconductor sales are expected to reach 1 trillion US dollars this year and double to 2 trillion US dollars in 2035. Geopolitical risks are difficult to contain the industry's prosperity this year, but the shortage of raw materials may affect long-term prospects. Countries are addressing the shortage of key minerals and key gases such as bromine and helium. Among them, the price of helium rose sharply in March due to the situation in the Middle East, and bromine is also at risk of shortage.

The main source of helium supply is blocked. Downstream acceptance of price increases is high, and price flexibility is worth looking forward to. 1) Supply side: Currently, the main import sources from the Middle East and Russia are almost completely “zeroed out”. Even if the air supply is completely restored immediately, it will take several months considering the transportation time and device restart time; Russia expects the replacement gas source to be blocked and export controls on helium will be implemented on April 14; 2) On the demand side, in major terminal applications such as nuclear magnetic resonance and semiconductors, helium does not account for a high share of the overall cost; 3) Inventory side: the conflict is close to March, and domestic inventories have declined rapidly. We believe that the continued rise in helium prices is strong and resilient.

The planned wind and light installed capacity exceeds 930 GW, and the “15th Five-Year Plan” key new energy plans for 21 provinces and cities have been announced. As of April 2026, out of 31 provinces and cities across the country, 21 provinces and cities of Inner Mongolia, Shanxi, Beijing, Tianjin, Heilongjiang, Jilin, Shandong, Shanghai, Anhui, Zhejiang, Jiangsu, Hunan, Hainan, Guizhou, Yunnan, Sichuan, Gansu, Ningxia, Shaanxi, Qinghai, and Tibet have announced the outline of the fifteenth five-year plan. According to the new energy construction targets of each province and city and the installed capacity by the end of 2025, 21 provinces and cities are planning to add more than 930 GW of wind and light. Among them, Inner Mongolia plans to add the largest scale, nearly 155 GW. Qinghai is second, with about 102 GW. The five provinces of Shanxi, Gansu, Jiangsu, Shandong and Sichuan plan to add 50 GW or more.

Mass production of solid-state batteries will accelerate in 2026. Starting in 2026, the solid state battery market continues to be hot, and 16 solid state battery and material projects have been put into operation, started and signed. Sixteen solid state battery and material projects in Jiangsu, Zhejiang, Guangdong and other places have been intensively started, put into operation, or signed. Of these, 8 have been put into operation and 8 have been signed, covering the two core links of core electrolyte materials and solid state batteries. Among them, semi-solid state battery technology is more mature and is currently the main force driving mass production implementation in the industry, while all-solid-state batteries are in the “mass production pilot and commercial exploration” stage. On the technical side, among the projects that have already been put into operation and construction, the oxide electrolyte route is faster in terms of mass production and commercialization; on the material side, there are 2 solid-state battery projects that have been put into operation and started, namely the Zijin Mining Solid State Battery Lithium Battery New Material Project and the Taizhou Qingtao Solid State Battery Raw Material Project (Phase 1). Currently, the boom in the solid-state battery industry continues to rise. Leading companies are promoting pilot line construction and product trial production verification. It is expected that more heavyweight all-solid-state products will be launched in the second half of 2026.