On March 22, the world's largest and most influential SEMICON CHINA International Semiconductor Exhibition came to a successful conclusion at the Shanghai New International Expo Center. According to information from the exhibitor, the conference was an unprecedented event. More than 1,000 companies from around the world participated in the exhibition, achieving comprehensive coverage of the entire semiconductor industry chain and the latest technology hotspots. It can be called a “carnival” for the semiconductor industry.

As a high productivity solution provider in the industry, Pudat Technology (00650) was also invited to participate in this event with three major cleaning equipment. With differentiated product performance and cost-effective solutions, Pudat Technology's products attracted the attention of many participants.

Picture: Exhibition site

Further insight reveals that Pudat Technology's vision of “providing high productivity solutions through innovation” was perfectly interpreted in the products participating in this conference. This also means that Pudat Technology has taken a solid step towards becoming a leading supplier in the industry with its differentiated competitive advantage.

Use differentiation to create a competitive advantage with high productivity and high cost performance

In 2022, with the full support and assistance of IDG Capital, the controlling shareholder, Pudat Technology successfully entered the two major circuits of semiconductor equipment and solar energy equipment. Since then, Pudat Technology has clarified the company's development path, which is to use the opportunity of re-optimization of the supply chain to expand globally after establishing a leading position in the Chinese market, and accelerate the acquisition of technology, products, channels and customers through independent research and development and external cooperation, so as to provide customers with innovation-based technology and solutions with a high level of productivity.

Up to now, in terms of semiconductor equipment, Pudat Technology has built three series of cleaning equipment, CUBE, OCTOPUS, and PARALLELO based on significant differentiated technical advantages, covering 6 inch, 8 inch, and 12 inch wafers. At this SEMICON China International Semiconductor Show, all three product lines were showcased.

Among them, the CUBE semiconductor wafer cleaning machine is a single-chip wet cleaning equipment completely independently developed by Pudat, which focuses on strong adaptability and high integration. The cleaning equipment is equipped with up to four chambers, provides a variety of wafer transmission solutions, can flexibly cover 6 inch, 8 inch and 12 inch wafers, and is equipped with vacuum, single-sided, and double-sided wafer carriers to meet the diverse needs of power devices, logic memory devices, wide bandgap semiconductors, and specialty process customers. At the same time, the equipment platform uses a modular design, high integration, and very simple installation and maintenance. Compared with similar international manufacturers, the equipment provides higher productivity and lower costs based on strong adaptability, and provides customers with cost-effective application solutions.

Figure: CUBE semiconductor single-chip wafer cleaning machine

OCTOPUS high-capacity semiconductor single-chip wafer cleaning machines focus on high-capacity applications. Currently, there are 12 mainstream semiconductor equipment chambers in the market. The 16 chambers configured on the OCTOPUS platform have increased productivity, and the wafer throughput is 17-25% higher than similar products. It is particularly suitable for large-scale mass production customers seeking maximum wafer output per unit time. It is the most cost-effective wet method application option for customers with large production capacity from R&D to mass production. Furthermore, the new platform can cover both the front and back stages of wafer manufacturing, and is more applicable.

Figure: OCTOPUS high-capacity semiconductor single-chip wafer cleaning machine

In detail, the chamber and chemical liquid supply system of this equipment use the same vertical array layout to provide high production capacity while ensuring optimal chamber process matching and chemical liquid recovery efficiency, which can provide customers with stable product performance and reduce chemical consumption costs.

At the same time, the equipment provides various wafer carrier configuration solutions to provide customers with customized requirements such as single-sided cleaning, double-sided cleaning, edge cleaning and etching of wafers. In terms of chemical solution configuration capabilities, the concept of platforming and grouping can not only rely on multiple chambers to increase production capacity in a single application, but also group different application configurations on the same platform to meet various R&D requirements.

The Parallelo semiconductor trough wafer cleaning machine is a cost-effective next-generation 300mm wafer cleaning system completely independently developed by Pudat Technology. It focuses on multi-process support and can meet high process requirements. The equipment platform uses a modular design, can process up to 50 wafers in a batch, and can flexibly configure various chemicals with functional options as needed. It supports various processes such as pre-diffusion/oxidation cleaning, wet etching, post-etching cleaning, photoresist peeling, and control sheet recycling.

Figure: PARALLELO semiconductor wafer groove cleaning machine

At the same time, the equipment is equipped with an efficient drying system that provides a controlled high concentration of IPA steam, thereby suppressing the generation of watermarks. In addition, high-concentration isopropyl alcohol vapors can quickly reduce surface tension, prevent pattern collapse, and meet high depth-to-width ratio process requirements. Furthermore, the efficient transmission system supports the transmission of 700 wafers per hour, which can stably support factory operations. Compared with similar international manufacturers, this equipment can provide higher productivity and lower costs, and provide customers with cost-effective application solutions.

It is worth noting that also featured at this exhibition was Xinkai Semiconductor Equipment (Xuzhou) Co., Ltd. (hereinafter referred to as Xinkai Semiconductor), the holding company of Pudat Technology. Holding Xinkai Semiconductor is Puda Technology's strategic layout based on the extension of cleaning equipment to deposition equipment. It is one of the important deployments to improve the company's diversified semiconductor equipment product matrix.

The Zhitong Finance App learned that Xinkai Semiconductor is a high-tech enterprise focusing on R&D, manufacturing and sales of high-end semiconductor equipment. It has the industry's top international technical team and management team, leading experts with more than 20 years of experience in the industry.

At the same time, Xinkai Semiconductor is positioned as a “leading semiconductor equipment system service provider”. Its main products are high-end equipment such as LP-CVD and ALD for 12-inch semiconductors, which can provide equipment, application solutions and after-sales support for global semiconductor manufacturers. This time, Xinkai Semiconductor's portable Ald-SiN/SiCN atomic layer silicon nitride deposition equipment participated in the exhibition.

Figure: Ald-SiN/SiCN atomic layer silicon nitride deposition equipment

Growth in industry demand+release of new products boosts continued high growth in performance

From an industrial perspective, it is just the right time for Pudat Technology to enter the semiconductor circuit. This is not only because the localization of the semiconductor industry is a long-term trend, but also because the semiconductor industry has entered a new upward cycle driven by artificial intelligence.

Since 2023, the rise of generative AI has brought the popularity of the global AI industry to a new climax. Countries around the world have joined the “AI arms race” one after another. Computing power is of great strategic importance as the core foundation of the AI industry, and computing power infrastructure construction has also become a key layout direction in China.

According to SEMI forecasts, thanks to the promotion of applications such as generative AI and high-performance computing (HPC) and the recovery in demand for chips, global semiconductor devices will resume growth in 2024, achieve a strong rebound in 2025 and hit a record high of 124 billion US dollars. This is more than 24% increase over the scale of about 100 billion dollars in 2023.

Among them, China will continue to be the main battleground driving the growth of the global semiconductor industry and will continue to lead the expansion of the global industry. In 2024 alone, it is expected that 18 new fabs will be put into operation in China. The continued rapid expansion of fab plants will drive a continuous increase in demand for upstream equipment.

Facing new opportunities in the semiconductor industry, Pudat Technology has launched cleaning equipment with significant differentiation advantages from competitors in the market, which can provide customers with cost-effective solutions with higher productivity and lower costs, and has a unique competitive advantage. Currently, the company has expanded many leading customers such as memory chip manufacturers, leading domestic wafer manufacturers in the field of segmented chip applications, and leading domestic wafer manufacturers with automotive OEM backgrounds, and will continue to benefit from industry growth in the future.

Moreover, according to Guohai Securities Research Institute, the current localization rate of domestic thin film deposition equipment is only 8%, and there is still plenty of room for growth. Through self-development+equity participation, Pudat Technology aims to turn thin-film deposition equipment into a new growth curve for the company's semiconductor business. The company can ship high-end characteristic CVD equipment to target top manufacturers this year. With the release of thin film deposition equipment in the future, it is expected to help the company's performance continue to grow.

In terms of manufacturing, Pudate Technology's production base is located in Xuzhou Electronic Technology Park, covering a total area of 30,000 square meters. Currently, the production capacity of the production base can reach 100 units of various semiconductor wafer cleaning equipment (which can be expanded to 300 units/year in the future) and 300 units of various solar wet processing equipment per year. The rich production capacity planning has laid a solid foundation for the company's future equipment.

Judging from the performance, Pudat Technology, which has successfully transformed, has entered the fast track of development. In fiscal year 2022 (12 months ending March 31, 2023), thanks to the continued release of products, Pudat Technology's revenue during the reporting period increased by 310.27% to HK$568 million.

Furthermore, according to the company's announcement, from April 1, 2023 to January 17 of this year, Pudat has received 83 purchase orders and prototype orders for semiconductor wafer cleaning, solar cell wet processing, and solar cell copper plating equipment from various customers. It can be seen that Puda Technology products are in high demand in the market.

Whether judging from the continuous breakthroughs of new products with differentiated competitiveness, the continuous increase in the number of orders, or the explosive growth in performance, it is proof that the true value of Pudat Technology is undergoing accelerated fission, but this has not yet been reflected in stock prices, and this may be a good opportunity to obtain excessive investment returns.

In the future, as the company's products continue to expand under industry opportunities, the true value of Pudat Technology will eventually be discovered by the market. Now is probably a good time to lay out Pudat Technology in the long term.