Core Insights - Anhui Hechen New Materials Co., Ltd. has completed over 100 million RMB in B-round financing, led by Guotai Junan Innovation Investment and CRRC Guochuang Fund, with participation from other institutions [1][2] - The raised funds will primarily be used for expanding production capacity of 8.6 generation blank mask plates and advanced semiconductor polishing pads, as well as increasing collaborative R&D efforts with strategic customers [1] Company Overview - Established in 2016, Hechen New Materials focuses on the R&D and production of new display and semiconductor precision polishing materials, including blank mask plates and polishing pads [1] - The company has completed the construction of a cleanroom production line with a ten-level cleanliness standard for G6 and G8.6 generation blank mask plates, with some products already in mass production [1][2] Market Position - Blank mask plates and CMP (Chemical Mechanical Polishing) pads are core materials in semiconductor manufacturing and display panel processes, traditionally dominated by Japanese and Korean companies, resulting in a low domestic production rate [1] - Since 2021, Hechen New Materials has been focusing on the localization of semiconductor display blank masks and advanced polishing pads, with some products already in mass production and key customers including QY Optoelectronics and Luy Optoelectronics [1] Project Development - The G8.6 generation blank mask plate project, which started in January this year, completed the installation of coating equipment in August and has begun debugging, expected to enhance the company's capacity and delivery capabilities in high-generation blank mask plates [2] Financing History - Hechen New Materials has completed multiple rounds of financing since its establishment, including 70 million RMB in A-round financing in December 2020, an undisclosed A+ round in July 2021, an undisclosed Pre-B round in April 2022, and the recent B-round financing of 100 million RMB in January 2023 [2]

Core Viewpoint - The article discusses the critical role of photomasks in semiconductor manufacturing, highlighting the technological challenges and market dynamics that affect China's chip industry, particularly in the context of US export restrictions and the need for domestic alternatives [2][3]. Group 1: Photolithography and Photomasks - Photolithography is a key process in chip manufacturing, where patterns from photomasks are transferred onto silicon wafers, directly impacting chip performance and power consumption [5][8]. - The precision required for photomasks has reached atomic levels, with line width errors needing to be controlled within 5 nanometers, equivalent to one ten-thousandth of a human hair [3][4]. - The photomask manufacturing process involves complex steps including CAM data processing, coating, exposure, development, etching, and inspection, with each step having stringent requirements [15][17]. Group 2: Technical Challenges in Photomask Production - The photomask manufacturing process faces significant challenges, including the need for precise environmental control during exposure, where temperature fluctuations can lead to position drift of up to 0.5 nanometers [18][19]. - Position accuracy between different layers of photomasks is critical, with requirements for 7nm processes needing alignment within 1.5 nanometers [19][20]. - Exposure control is vital, as deviations in exposure energy can lead to significant variations in line width, affecting the final product quality [20][28]. Group 3: Market Dynamics and Trends - The global semiconductor materials market is projected to grow, with the photomask segment expected to reach a market size of approximately $5.4 billion by 2023, driven by increasing demand for advanced processes [49][50]. - The photomask market exhibits higher profit margins compared to flat panel displays, with advanced process photomasks showing significant improvements in profitability due to technological advancements [54][57]. - The shift of semiconductor manufacturing capacity to China is anticipated to increase domestic demand for photomasks, with projections indicating a rise in the number of 12-inch wafer fabs in the region [61][63]. Group 4: Photomask Industry Structure - The photomask supply chain is characterized by a heavy reliance on imports for key materials, with major suppliers located in Japan and Korea, leading to a significant domestic technology gap [42][44]. - The cost structure of photomasks is primarily composed of direct materials and manufacturing costs, with photomask substrates accounting for over 90% of direct material costs [46]. - The photomask industry is segmented into in-house production by wafer manufacturers and independent third-party suppliers, with the latter being more prevalent in mature process nodes [52].