China Chemical Sector "Fluorochemicals: Beneficiary of AI-driven new opp..."

Research evidence excerpt

China Chemical Sector "Fluorochemicals: Beneficiary of AI-driven new opp..."

China Chemical Sector UBS Research

Figure 2: Fluorochemical value chain and its connection with AI

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ts connection

with AI

Fluorochemical value chain an

Source: UBS-S

Semis manufacturing: electronic-grade hydrofluoric acid

Electronic-grade hydrofluoric acid (EG-HF) is a key wet electronic chemical. It is

an aqueous solution prepared by purifying anhydrous hydrogen fluoride and absorbing

it into ultrapure water. EG-HF is one of the larger-scale categories in the field of wet

electronic chemicals with relatively rigid demand, with 2025 market size around

Rmb4.25bn in China. EG-HF has seen its total addressable market (TAM) driven by

downstream capacity expansion (e.g. semis and display panels) as well as domestic

substitution. It is mainly used in cleaning and etching processes in semiconductor

manufacturing. Cleaning primarily involves removing the natural oxide layer and trace

residual impurities from the wafer surface to ensure the interface cleanliness required for

subsequent thin-film deposition and processing. Etching, which is primarily based on its

chemical reaction with materials such as silicon dioxide, is to achieve precise patterning

and structural formation on the wafer surface.

Figure 3: China's electronic-grade hydrofluoric acid consumption and revenue

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Source: Befar Group's H-share IPO prospectus (Application Proof), China Chemical Economic and Technological

Development Center (CNCET), Frost & Sullivan analysis

In terms of application and purity levels, EG-HF is classified into grades of EL, UP, UPS,

UPSS, and UPSSS (semis G5). UPSSS is currently the highest grade (typically used in