(Yicai) Dec. 26 -- Hubei Dinglong Holdings plans to invest CNY804 million (USD113 million) to build a factory that makes KrF and ArF photoresists, which are crucial light-sensitive materials needed in the production of advanced integrated circuit chips, in an important step towards helping China’s chip manufacturing industry become more self-reliant.

The facility, which will be located in Qianjiang, central Hubei province, will have an annual output of 300 tons of KrF and ArF photoresists, the Chinese semiconductor chemicals supplier said yesterday. KrF photoresists are mainly used on 130 nanometer and 250 nm chips while ArF photoresists are used on 14 nm and below semiconductors.

Given the country's dependence on imports, if Dinglong is able to achieve mass production of ArF and KrF photoresists and develop a solid customer base, it will reap considerable economic benefits, it said. So far the Wuhan-based company has developed 13 types of ArF and KrF photoresists, five of which have been sent to clients for testing.

Dinglong will set up a joint venture to manage the investment, construction and operations of the project, it said. Dinglong will own 75 percent of the JV, two companies that belong to key staff will hold 20 percent equity and the remainder will be owned by an outside investor, it added. No details of the construction timetable were given.

China’s IC photoresist market expanded 13.5 percent last year from a year earlier to CNY3.4 billion (USD470.8 million) and is expected to reach CNY3.8 billion by 2025, Dinglong said, citing data from the China Electronics Materials Industry Association. Of this, the KrF and ArF photoresist markets will account for CNY2.5 billion, it added.

Dinglong’s share price [SHE:300054] was trading up 0.7 percent at CNY22.93 (USD3.20) a share as of 1.37 p.m. today.

Editor: Kim Taylor