AMEC: A rising star in international semiconductor equipment

After four rounds of questions and answers, AMEC, led by Yin Zhiyao (founder, chairman and general manager of AMEC), disclosed the draft prospectus for the IPO in just over two months on the evening of June 11.

　　As the first company to go to the board meeting after answering the "four questions", what "real skills" does AMEC have? "With excellent technical R&D capabilities and good product performance, AMEC's ​​market competitiveness cannot be underestimated." After using AMEC's ​​MOCVD equipment (metal organic chemical vapor deposition, a key equipment for producing LED chips) on a large scale, Liu Rong, president of HC Semitek, commented. Another senior semiconductor equipment industry insider commented, "This is a rising 'new star' in international semiconductor equipment!"

　　From breaking the monopoly of international leading companies in the Chinese market with etching equipment, to becoming the global leader in MOCVD, and then to the application of 5nm plasma etching equipment in the world's most advanced wafer manufacturing plants, AMEC has always been at the forefront of China's "core" creation, using technological innovation to safeguard the "Chinese core".

　　Never lost a patent lawsuit to break foreign monopoly

　　When it comes to semiconductors, the first thing that comes to mind for Chinese people is that they are "choked" by international advanced technologies, especially semiconductor equipment, which has been a long-term "heartache" for Chinese people. Today, AMEC is changing this situation bit by bit with its tenacity and hard work.

　　In 2015, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce issued a special announcement: Because a Chinese company has made plasma etchers of the same quality and quantity as American equipment companies, the export control of etchers to China will be lifted. This company is AMEC, a new star in global semiconductor equipment.

　　After that, AMEC achieved great success in the MOCVD field. In 2010, AMEC began to develop MOCVD, the most critical equipment for LED device processing. By 2017, it had gradually broken the monopoly of international manufacturers such as Veeco of the United States and Aixtron of Germany.

　　How can AMEC break the foreign monopoly? In the eyes of industry insiders, this is a company with "giant genes". In 2004, Yin Zhiyao led a luxurious global team to establish AMEC, dedicated to the localization of semiconductor equipment. At that time, Yin Zhiyao had been working in the semiconductor field for 20 years, and had held important positions in top international semiconductor companies such as Intel, Lam Research, and Applied Materials, with rich experience in the field of semiconductor equipment. Other co-founders and core technical personnel of AMEC, such as Du Zhiyou, Ni Tuqiang, and Mai Shiyi, are also top talents in this field.

　　Integrated circuits are an industry that requires a long period of time, especially in the semiconductor equipment segment. AMEC spent 11 years in this field before forcing the United States to relax its monopoly on etching machines; it took 14 years of hard work to gain a dominant position in the global GaN-based LED MOCVD equipment market.

　　Real high-tech companies all start with R&D. From 2016 to 2018, AMEC's ​​R&D expenditures were 302 million yuan, 330 million yuan, and 404 million yuan, accounting for 49.62%, 34%, and 24.65% of its revenue in the same period, respectively.

　　In November 2017, when Veeco applied to prohibit SGL from selling graphite disks using its patent to AMEC, AMEC finally won the key patent validity decision in the lawsuit against Veeco for patent infringement.

　　This is one of the things that makes Yin Zhiyao most proud - relying on strong independent research and development, AMEC has never lost any patent lawsuit.

　　According to the prospectus, as of the end of 2018, AMEC was involved in a total of four intellectual property litigation cases at home and abroad, including two patent cases and two trade secret cases. The company reached a settlement or won the lawsuits, proving that the company has a solid intellectual property position and the ability to cope with complex international intellectual property challenges, providing strong guarantees for the company's healthy development.

　　"It is not surprising that AMEC faces lawsuits from international giants. Its job is to steal the giants' cake." Faced with the lawsuits that AMEC has faced since its inception, an executive of an international semiconductor equipment company explained to reporters that the semiconductor industry is actually a highly concentrated market. The top three companies in almost every segment account for nearly 90% of the market share, so new entrants are naturally suppressed when they emerge.

　　Etching equipment enters 　　the international advanced ranks of 5nm MOCVD

　　TSMC revealed at a technical forum in May that the first phase of the 5nm process production line has begun installation and is expected to go into mass production in the first quarter of next year. As a result, AMEC has once again become the focus of the market.

　　In its prospectus, AMEC disclosed that its independently developed plasma etching equipment has been widely used in internationally advanced 14nm, 7nm and 5nm production lines.

　　When AMEC was first established, it set its sights on the etching equipment field. "The processing accuracy of a plasma etcher is equivalent to one-five thousandth of a human hair, and it also requires continuous stability." In the view of the aforementioned international semiconductor equipment company executives, it is the exquisite technology in the fields of process and design, as well as decades of persistence, that enables AMEC to have the strength to break the monopoly.

　　In just three years, AMEC produced its first generation of dielectric etching machines in 2007. In July of the same year, AMEC was included in the list of "China's Top 50 Most Valuable Companies for Investment in 2007" by Zero2IPO Group. It was also in this year that AMEC became a thorn in the side of international semiconductor giants, and patent lawsuits began to arise one after another.

　　At present, AMEC has become a global leader in both etching equipment and MOCVD.

　　In the field of etching equipment, according to AMEC, the research and development and industrialization of 14-7 nanometer CCP dielectric etcher and CCP etching equipment used for advanced logic circuits have reached the international advanced level, and the CCP etching equipment used for memory etching is catching up with the advanced level.

　　"Excellent R&D capabilities and good product performance." After purchasing and using large-scale MOCVD from AMEC, Liu Rong, president of HC Semitek, gave this evaluation in an interview. At present, AMEC has developed three generations of MOCVD equipment, and high-temperature MOCVD equipment, 30-inch large-size MOCVD equipment, and new high-capacity MOCVD equipment have all reached the international advanced level. The products have been purchased in large quantities by many first-class LED manufacturers such as Sanan Optoelectronics, HC Semitek, and Qianzhao Optoelectronics, gradually realizing domestic substitution.

　　With its strength, AMEC has undertaken a number of major national science and technology projects. According to the prospectus, since 2009, AMEC has successively undertaken major national science and technology projects such as the R&D and industrialization of 65-45nm dielectric etcher, the R&D and industrialization of 32-22nm dielectric etcher, the development and localization of 22-14nm dielectric etcher and key parts, the R&D and industrialization of 14-7nm dielectric etcher, and the verification and application of etching process parts, as well as Shanghai projects such as the R&D and industrialization of high-end MOCVD equipment and the R&D of 450mm large-size etcher.

　　With its pioneering and innovative spirit, AMEC has won numerous awards in the field of semiconductor equipment. According to reports, AMEC has won 69 well-known awards, such as ranking third among global semiconductor equipment companies in the 2018 VLSI Research "Customer Satisfaction" survey, second in the ranking of etching and cleaning equipment suppliers, and first in the ranking of global thin film deposition equipment suppliers.

　　Aiming to benefit the world deeply from the development of domestic IC

　　"With the continuous development of my country's semiconductor industry, AMEC is entering a period of rapid growth." Regarding the development prospects of AMEC, some industry researchers believe that under the guidance of Moore's Law, more than 60 new production lines will be built worldwide, of which more than 40% are in China, which will bring huge opportunities to AMEC.

　　"By 2020, the market size of chip front-end equipment alone will reach 30 to 40 billion US dollars." Yin Zhiyao cited relevant data in a speech in 2017, describing the good market prospects of etching and chemical thin film equipment engaged in by AMEC. "According to our statistics, from 2016 to 2020, semiconductor equipment investment was 74.8 billion US dollars, of which plasma etching equipment investment was about 13.47 billion US dollars. AMEC's ​​etching equipment can get a considerable share."

　　Although the prospects are bright, the road is tortuous. At the beginning of their business, Yin Zhiyao and AMEC suffered a lot from the "money" problem.

　　According to a person familiar with semiconductor equipment, high technology, high investment and high risk are the typical characteristics of the semiconductor industry; coupled with the long investment cycle, it is even more difficult to seek market-oriented funds in the semiconductor equipment field.

　　At this time, the importance of government funds, especially special funds such as the National Integrated Circuit Industry Investment Fund (referred to as the "Big Fund"), has become prominent. According to disclosures, from 2016 to 2018, AMEC launched multiple rounds of financing, introducing several institutional shareholders with state-owned backgrounds, including Xunxin Investment, Shanghai Venture Capital, Guokai Innovation, and Pudong Xinxing.