Chip manufacturer sells jewelry and earns 1.2 billion a year!

People in the industry may be tired of hearing the term "cross-border core manufacturing". From mobile phone manufacturers, Internet giants to automobile companies, and even department store tycoons, real estate veterans, cement industry, and clothing brands, they are all flocking to semiconductors. People with chips complained: "Everyone is here to grab a living, so what do we earn?"

Some chip companies are very talented, "Then let's cross over too! Sell jewelry and make money from jewelers!"

Yes, you heard it right. After major industries cross-border chip manufacturing, chip companies are not to be outdone and sell jewelry across borders. And the business is pretty good. For example, LED chip manufacturer Jucan Optoelectronics earned 1.218 billion yuan from selling gold in 2023; China Electronics Technology Second Institute and Wolfspeed even established jewelry brands and became diamond professionals.

Today, let’s talk about the indissoluble bond between chips and jewelry.

"Gold" is a common material in the field of electronic equipment manufacturing, and it is also the first pot of gold for chip manufacturers to sell jewelry.

Gold has very good electrical conductivity, ranking third among metals in electrical conductivity, with a resistivity of only 2.44×10^-8Ω·m, and its chemical properties are very stable, with excellent ductility, corrosion resistance and oxidation resistance. sex. Thanks to the above properties, gold is widely used in the manufacture of circuit boards and various high-end electronic devices.

In the semiconductor field, gold is commonly used to make connectors , electrodes and plating coatings , as well as gold bonding wires within semiconductor packages . In addition, high-purity gold sputtering targets are also key source materials for the preparation of electrode film layers in various chips and integrated circuits in the electronics industry.

Taking LED chip production as an example, companies will use an evaporation process to weld electrodes on the chip and increase the current conductive area of ​​the chip by evaporating metal. During this process, gold will fly around, and the gold that does not fall on the chip will become waste and fall on the bottom of the furnace, and this part of gold waste accounts for the vast majority of the entire production line.

It is understood that in the evaporation process of LED chips, about 10 kilograms of gold are consumed for every 160 million chips produced . And due to different production processes and specifications, the gold consumption may vary by about 1 times, which is about 5-10 kilograms. . For every 10 kilograms of gold consumed, about 8 kilograms can be recovered and recycled after purification.

Therefore, some chip manufacturers will deliver the gold waste generated during these processes to professional gold recycling companies for recycling based on the gold market price, such as Jucan Optoelectronics mentioned at the beginning.

According to the 2023 annual report of Jucan Optoelectronics, the company's revenue in 2023 will be 2.48 billion yuan, of which the gold scrap recycling business will have revenue in 2023 of 1.218 billion yuan, accounting for 49.13%, which is almost the same as the main LED chip business revenue. .

Source: Jucan Optoelectronics 2023 Annual Report

Also making money from the sale of gold and other precious metal scraps is LED chip leader Sanan Optoelectronics. According to Observer.com, as early as 2012, scrap sales became the company's third main business, with revenue increasing from 5.94 million yuan in 2008 to 230 million yuan in 2012; it is also an important source of profit. , contributing up to 26.4% of the company's main business gross profit in 2012.

By 2022, according to Sanan Optoelectronics' financial report, its materials and scrap sales business will have revenue of 3.216 billion yuan in 2022, accounting for 24.32%, ranking second among the company's four major revenue businesses. However, the gross profit margin of this business is only 2.66%.

Source: Sanan Optoelectronics 2022 Financial Report

In addition to gold, "diamonds" are also favored by chip manufacturers, especially silicon carbide (SiC) wafer manufacturers and SiC substrate manufacturers. Similar to LED chip manufacturers, the jewelry sold by SiC manufacturers is also made from scrap, but most of it is "unqualified" chip scrap.

Compared with traditional silicon, the manufacturing process of silicon carbide substrates is significantly more difficult. Crystal growth is the core process link and the core technology bottleneck, which determines the electrical properties of silicon carbide substrates. The so-called crystal growth is to synthesize silicon carbide powder using high-purity carbon powder and high-purity silicon powder as raw materials, and grow silicon carbide ingots of different sizes under a special temperature field.

However, the growth temperature of silicon carbide crystals is above 2300°C, which requires high temperature and pressure control. In addition, silicon carbide has more than 250 isomers, and only a few crystal structures can be used as semiconductor materials, which require strict control. Only parameters such as silicon-to-carbon ratio, growth temperature gradient and air flow pressure can grow ideal crystals. The difficulty can be imagined.

Because of this, the yield rate of SiC crystals is generally low, and manufacturers will always produce many ingots that cannot meet semiconductor-level requirements. So what should we do with these "defective products" and "waste products"?

What a coincidence! These semi-finished crystals only need to be polished and polished to transform into silicon carbide synthetic gemstones - moissanite . The appearance and internal crystals of moissanite are very similar to diamonds, and the price is only one-tenth of traditional diamonds. It has gradually become the new favorite in the jewelry industry and is loved by consumers.

Source: Baidu Encyclopedia

With the boom in the moissanite jewelry market in recent years, many SiC manufacturers will sell crystals that cannot meet the semiconductor parameter specifications by weight, and the downstream can be used to process artificial gemstone jewelry (moissanite). On the other hand, due to the high difficulty of growing silicon carbide crystals, domestic and foreign moissanite jewelry processors generally do not do it themselves, but purchase gem crystals as raw materials from SiC manufacturers.

Over time , it has become common in the industry for silicon carbide wafer manufacturers and silicon carbide substrate manufacturers to sell gem crystals. The most typical cases are Tianyue Advanced and Tianke Heda.

According to Tianyue Advanced’s prospectus, three of the company’s top five customers from 2018 to 2020 were jewelers. Proportionally speaking, Tianyue Advanced's crystal ingot sales business is also one of the important sources of revenue. In 2018, revenue was 43.42 million yuan, accounting for 31.89%; in 2019, it was 74.1947 million yuan, accounting for 27.63%; in 2020, it was 64.3106 million yuan. , accounting for 15.14%.

Source: Tianyue Advanced Prospectus

When another company, Tianke Heda, applied to be listed on the Science and Technology Innovation Board in 2020, because the revenue and gross profit margin of the diamond business were too high, it was questioned about its science and technology innovation attributes , and finally withdrew its IPO application. According to the prospectus, from 2017 to Q1 2020, its "silicon carbide gem crystal" business revenue accounted for 26.71%-31.73%, and its gross profit margin was 27.01-31.85%, which is higher than its main business "silicon carbide crystal".

Data source: Tianke Heda prospectus

There are even silicon carbide manufacturers that choose to create jewelry brands , and they have created a certain degree of popularity.

The overseas representative is Cree, the predecessor of Wolfspeed. A person in charge of the company established the jewelry company C3 (later renamed Charles & Colvard , referred to as C&C) and signed an exclusive supply agreement with Wolfspeed in 2014. According to the supply agreement, C&C expects to purchase at least US$4 million to US$10 million in silicon carbide gemstone crystals from Wolfspeed annually by June 2025.

The domestic representative is the Second Research Institute of China Electronics Technology Group Corporation (China Electronics Technology Group Second Research Institute). They began research on silicon carbide single crystal materials in 2007. With the support of relevant ministries and commissions, it took 8 years to fully master the preparation process of high-purity silicon carbide powder. In 2015, he founded the jewelry brand UNIMOSS , successfully applied SiC materials to the field of civilian jewelry, and provided high-quality loose moissanite, moissanite jewelry, etc. in batches. It already has a production capacity of 100,000 carats.

Source: negative review

There are also semiconductor material manufacturers who are dedicated to "jewelry". They found a new way to extract various precious and rare metal raw materials from 3C waste.

The "Global E-Waste Monitoring 2020" report released by the United Nations shows that a total of 53.6 million tons of e-waste was generated globally in 2019, with a raw material value of approximately US$57 billion, of which iron, copper, aluminum and gold contributed the largest value, accounting for 17.4% According to the official statistics of recycling rates, global e-waste can recycle more than 4 million tons of various raw materials worth approximately US$10 billion every year.

Industry insiders pointed out that one ton of old mobile phones (about 6,000 units) contains metals worth US$15,000, including approximately 3.5 kilograms of silver, 340 grams of gold, 130 grams of palladium, and 130 kilograms of copper. These treasures hidden in electronic waste are known as "urban mines". They have attracted terminal manufacturers such as Apple, Dell, Samsung, Acer, Asus, and Hon Hai to set up old machine recycling bases for recycling, and have also become a source of recycling for some semiconductor material manufacturers. sources of raw materials.

Source: Mirror Weekly

For example, "Weist", an electrolytic equipment and consumables factory for PCB manufacturing processes , recycles 3C waste and scrap copper liquid to refine precious metals for use in the semiconductor packaging, LCD photovoltaic panels and PCB manufacturing industries, realizing resource recycling and reuse.

There is also the world's largest storage medium thin film sputtering target manufacturer "Koyangke" , which extracts gold, silver, platinum, palladium, ruthenium, indium, gallium, tantalum and other precious and rare metals from electronic waste to provide sputtering Plating targets, evaporation materials, precious metal chemicals and materials, etc.

Taking waste copper liquid as an example, Koyangke recycles the copper sulfate liquid produced by TSMC and makes it into recycled copper tubes after multiple treatments. The copper tubes are then made into anode copper targets that can be used in the wafer process to supply the semiconductor front-end. target material for the process.

Source: Guangyangke official website

The same goes for "jewelry". Some semiconductor manufacturers have very strange brain circuits. They do not plan to make money from selling jewelry. Instead, they plan to use "diamonds" to make chips, that is, diamond semiconductors. Once you succeed, you can make more money.

This path originated in the 1970s. American scientists developed the use of high-temperature and high-pressure methods (HPHT) to grow small diamond single crystals, which set off a craze in the scientific community to study diamond semiconductors.

Diamond has a bandgap of up to 5.5eV, higher carrier mobility (holes: 3800 cm2·V-1·s-1, electrons: 4500 cm2·V-1·s-1), higher With its higher breakdown electric field (>10 MV·cm-1) and larger thermal conductivity (22 W·K-1·cm-1), it is more suitable for use in extreme environments such as high temperature, high radiation, and high voltage.

According to rough estimates, diamond's performance as a semiconductor is 23,000 times better than silicon, 120 times better than gallium nitride (GaN), and 40 times better than silicon carbide (SiC). Therefore, diamond is considered a key material for fourth-generation semiconductor technology and is also known as the "ultimate power semiconductor."

Source: Guoke Hard Technology

It is reported that the American Akhan Company, the British Element Six Company, the Japanese NTT Company, the Japanese Institute of Industrial Technology (AIST), the Japanese Institute of Materials and Materials (NIMS), the American Geophysical Laboratory Carnegie Institution, the American Argonne National Laboratory, etc. They are all promoting the industrialization of diamond semiconductors.

Because there are still a large number of unsolved problems in basic research, materials, devices, etc., diamond semiconductors also disappeared for a time. Until the advent of the post-Moore era in recent years, the industry has continued to invest in the research and development of new materials, and has also accelerated the development of ultra-wide bandgap semiconductor materials such as diamond, ushering in another wave of "diamond chips" in 2023.

In early 2023, Japan's Saga University and the Japanese precision parts company Orbray jointly developed a power semiconductor made of diamond. In October, the American company Diamond Foundry cultivated the world's first single-crystal diamond wafer, with a diameter of 100 mm and a weight of 100 carats.

On October 27, 2023, the patent "A hybrid bonding method for three-dimensional integrated chips based on silicon and diamond" jointly applied by Huawei and Harbin Institute of Technology was made public, which attracted widespread attention and even staged a "Crazy Stone" plot. , triggering a rise of more than 16% in lab-grown diamond concept stocks.

Source: Qichacha

Currently, diamond can serve as both a substrate and epitaxy (the process of growing a new single crystal on a single crystal substrate after cutting, grinding, polishing, etc.) in semiconductors. Single crystals and polycrystals also All have different uses.

However, due to issues such as doping, size and price, diamond is still a long way from officially entering the semiconductor industry. As for when "Diamond Chip" can start making money? Let us look forward to it together.

References:

There are many chip factories that are making money by making jewelry; negative reviews

3C garbage digs gold mines, Hon Hai flags "mobile phone recycling" to seize the circular economy; Mirror Weekly

Extracting gold from old mobile phones: At a cost of only $5, this new polymer can recover $64 of gold; DeepTech

Can diamonds take over chip jobs? Guoke Hard Technology

https://www.guancha.cn/Industry/2013_04_01_135743.shtml