Hubei Feilihua Quartz Glass (SZ:300395)2025-12-31 16:02Summary of the Conference Call on Synthetic Quartz for Photomasks Industry Overview - The synthetic quartz material for photomasks has a limited annual demand of less than 200 tons, with domestic prices around 350-400 RMB per kilogram and imported prices exceeding 1,000 RMB per kilogram. Major suppliers include Japan's Shin-Etsu, South Korea's SS, and IGC [1][2] - Domestic advanced process synthetic quartz materials are heavily reliant on imports, with foreign total production capacity around 20,000 tons, 40% of which is supplied to China. Domestic ordinary process capacity is about 2,000 tons, mainly provided by companies like Fihua and Changfei [1][3] Key Points and Arguments - The price of synthetic quartz materials has risen due to strong downstream demand, particularly for blank masks. The domestic advanced process still depends on Japanese and Korean imports, which has contributed to the price increase [1][5] - Current domestic prices for synthetic quartz materials are stable at 350-400 RMB per kilogram, but prices for high-end processes are expected to continue rising due to ongoing reliance on imports [1][8] - In the overseas market, prices for synthetic quartz materials used in advanced processes (28nm and below) are currently over 1,000 RMB per kilogram and are expected to continue rising due to strong demand [1][9] Production and Supply Chain Insights - Domestic companies like Fihua and Changfei are pushing for localization but face challenges in mass production and customer validation. Short-term reliance on foreign suppliers is expected to continue [1][11] - New Moon Company plans to add 8,000 tons of capacity in China, expected to be operational by the second half of 2026, which may impact the market but will not immediately change the competitive landscape dominated by foreign suppliers [1][13] - The production process for synthetic quartz substrates involves chemical vapor deposition (CVD) or silicon oxide deposition, which requires high purity and advanced technology [1][6] Challenges and Market Dynamics - Domestic production is limited by the inability to produce high-purity synthetic sand, which is a significant bottleneck. If this issue is resolved, the transition from synthetic sand to final products would not face technical barriers [1][28] - The market is currently characterized by a B2B sales model with minimal involvement of intermediaries, and companies typically maintain a safety stock of around three months [1][15][16] - The domestic market's demand for natural quartz products is approximately 80%, while synthetic quartz products account for about 20%. The demand for synthetic quartz is expected to increase significantly with advancements in semiconductor processes [1][23] Future Outlook - The profit margins for synthetic quartz materials are relatively high, estimated between 50% to 60%, while mature process products have lower margins of about 30% to 40% [1][25] - The overall market demand for synthetic quartz materials is growing, with current production capacity insufficient to meet future needs, which could reach 16,000 tons [1][24] - The enhancement of domestic production capabilities is a strategic goal, but achieving significant localization will take time and may not immediately alter the existing supply-demand dynamics [1][14]