Open-source Securities has released a research report indicating that as wafer fabrication plants continue to increase their input volumes, the semiconductor materials sector is poised for sustained growth. With expansion across multiple application areas coupled with process upgrades, the wet electronic chemicals industry has entered a fast track of simultaneous volume and price increases.

The firm believes that local substitution is progressively advancing from general-purpose products to high-end materials, and during this critical window, the ability to ensure stable supply may determine medium-term market share. It favors material platform players and leading specialists in niche segments. Below are the key viewpoints from Open-source Securities.

Strong Manufacturing Activity Ushers in a New Upswing for Semiconductor Materials

The AI era has presented fresh development opportunities for the semiconductor materials market. AI is driving demand release in advanced computing and storage sectors, keeping semiconductor manufacturing utilization rates high and pushing capacity expansion into an upward cycle. As the industry's most upstream segment, semiconductor materials are also experiencing robust activity during this growth period. The global semiconductor materials market has grown from USD 65 billion in 2023 to USD 73.2 billion in 2025, while the wafer fabrication materials segment has risen from USD 41.5 billion to USD 45.8 billion, with projections to further increase to USD 48.9 billion by 2026. In Q1 2026, global silicon wafer shipments grew 13% year-on-year, marking the seventh consecutive quarter of annual growth. The firm asserts that as wafer fabs ramp up input volumes, the semiconductor materials industry will continue to benefit.

Wet Electronic Chemicals: Multi-Sector Expansion and Process Upgrades Propel Volume-Price Growth

Wet electronic chemicals are categorized by function into general-purpose and functional types, and by application into integrated circuits, display panels, and photovoltaics. Photovoltaics contribute the largest demand volume due to massive production capacity, while integrated circuits account for roughly 70% of the global market value, primarily because high-grade products demand stricter purity, cleanliness, and stability standards, commanding higher value.

In the integrated circuit sector, process upgrades are boosting unit material consumption and driving product premiumization. Beyond the direct demand expansion from manufacturing capacity increases, the more critical factor is that new wafer fabrication capacity is concentrated in advanced nodes and high-end chips such as 3D NAND. This increases the number of patterning process steps, thereby raising demand for supporting processes like cleaning, etching, and CMP, which in turn lifts average material consumption per unit. Simultaneously, product premiumization is pushing prices upward.

In the display panel and photovoltaic sectors, the display panel industry is seeing steady demand growth for wet electronic chemicals, supported by recovering utilization rates and improving downstream demand. In photovoltaics, although purity requirements for wet electronic chemicals are relatively lower, the large shipment volumes of solar cells and repetitive process steps create strong economies of scale in overall usage.

Japanese and Western Firms Dominate Core Categories; "De-Japanization" Expectations Accelerate Local Breakthroughs

Foreign players hold sway in the high-end segment: Japanese and Western companies command approximately 27% and 30% market shares, respectively, in global wet electronic chemicals for integrated circuits. Japanese materials clusters have distinct advantages, with deep expertise in high-purity fluorides, ultra-pure cleaning materials, and CMP materials, as well as in chemicals and supporting materials required for photolithography. Due to geopolitical tensions, supply chain risks for upstream critical materials have been elevated to unprecedented levels. Rising "de-Japanization" risk-aversion sentiment may prompt domestic mainstream wafer fabs and packaging houses to significantly accelerate the qualification and volume ramp-up of local suppliers.

Domestic wet electronic chemicals manufacturers are moving swiftly into a golden window for "comprehensive substitution."

Risk Warning

Risks include industry performance falling short of expectations, local substitution underperforming expectations, and fluctuations in raw material prices.