Core Viewpoint - Xiamen Hengkang New Materials Technology Co., Ltd. has successfully passed the IPO review for the Sci-Tech Innovation Board, aiming to raise 1.007 billion yuan for two major projects related to integrated circuit precursor materials and advanced materials [1][3]. Industry Overview - The domestic market for key materials in integrated circuits, such as photoresists and precursors, is heavily dominated by foreign manufacturers from Europe, the United States, Japan, and South Korea. Chinese companies face significant gaps in raw material supply, equipment development, technology accumulation, talent cultivation, and financial reserves [4]. - The increasing restrictions imposed by foreign countries on China's integrated circuit industry have created substantial challenges for the domestic supply chain, making the push for domestic production of key materials urgent, especially in the high-end integrated circuit sector [4]. Company Strategy - The fundraising projects by Hengkang New Materials align with the industry's trend towards domestic production of key materials. The focus will be on the research and industrialization of precursors and other critical materials, which is expected to enhance the domestic supply chain security for high-end integrated circuits [4]. - The current reliance on imports for key materials presents a competitive disadvantage for domestic manufacturers. However, the growing wafer fabrication capacity and rapid downstream demand create a unique opportunity for domestic companies to capture market share during this "golden development window" [5]. - Hengkang New Materials aims to leverage its existing customer base in the integrated circuit sector to quickly develop products that meet industry standards and ensure stable supply and quality, thereby seizing opportunities in the domestic market [5]. Product Development - Hengkang New Materials has made progress in the integrated circuit materials sector, with products including photoresists and precursors used in 12-inch wafer manufacturing. The company serves several leading domestic wafer manufacturers [6]. - The product range includes silicon-based and metal-based precursors, as well as advanced photoresist materials that meet the needs of cutting-edge manufacturing processes. The introduction of new products will enhance the company's ability to meet domestic demand for localized materials [6]. - The implementation of the fundraising projects will further diversify the product matrix of Hengkang New Materials, increasing its competitiveness and brand influence in the market, which is essential for long-term growth [6].

Core Viewpoint - The domestic production process of key materials in the integrated circuit industry is being driven by both policy and market forces, with Hengkun New Materials successfully passing the IPO process to raise 1.007 billion yuan for projects targeting high-end materials and precursor production [1][3]. Policy Support - The projects related to precursors and photoresists are included in the "Key New Materials First Batch Application Demonstration Guidance Catalog (2024 Edition)," which are encouraged by the state [3]. - A series of policies, including tax incentives and local government support, have provided substantial benefits for integrated circuit material companies, laying a solid policy foundation for Hengkun New Materials' capacity expansion [3]. Technical Capability - Hengkun New Materials has accumulated research and development capabilities and mass production experience in key materials for integrated circuits, with products like TEOS and SOC already in mass production [3]. - The company has formed a composite technical team covering material formulation design, process development, quality control, and application, which is crucial for achieving true domestic substitution [3][4]. Market Outlook - The demand for precursors and high-end photoresists is rapidly increasing as domestic wafer manufacturing processes advance, with a projected compound annual growth rate of over 27% for the integrated circuit precursor market in the next five years [4]. - The ArF photoresist market is expected to grow at an annual rate of 30.5%, indicating significant room for domestic substitution as the current localization rate remains low [4]. - Hengkun New Materials' fundraising projects have multiple feasibilities in terms of policy, technology, and market, which may enhance the company's competitiveness in the key materials sector and support the realization of domestic substitution and industrial autonomy [4].