Transfer from: China Post Securities Research Institute

Event: On May 22, the company launched a framed wafer cleaning equipment for advanced packaging, which can effectively clean semiconductor wafers during the cleaning process after debonding.

Investment Points:

framed wafer cleaning equipment is rich in advanced packaging layout, and advanced packaging revenue is expected to account for about 10%-15%. On May 22, the company launched a framed wafer cleaning equipment for advanced packaging, which can effectively clean semiconductor wafers during the cleaning process after debonding. The innovative solvent recovery system for framed wafer cleaning equipment is environmentally and cost-effective, enabling nearly 100 percent solvent recovery and filtration, thereby reducing the amount of chemicals used in the production process; the company has completed the installation and verification of the first collaborative equipment with a Chinese integrated circuit manufacturer. At present, the company has a comprehensive layout of advanced packaging equipment, with the domestic packaging factory for 2.5D, 3D packaging demand growth, the company's related equipment products domestic orders will have a greater room for improvement. At the same time, the company will also open up markets including South Korea, the United States, and Taiwan, waiting for overseas orders. Combined with domestic and overseas market demand, the advanced packaging market has great room for growth. It is expected that the company's advanced packaging equipment will account for about 10%-15% of the overall sales revenue.

high temperature single-chip SPM, supercritical CO2 and other cleaning new products launched to open up the cleaning plate growth point. 1) The company's SPM equipment includes Tahoe, low-temperature single-chip SPM equipment and new high-temperature single-chip SPM equipment, and it is expected that Tahoe equipment will enter a rapid growth phase in the future. At present, there is only one high-temperature single-chip SPM equipment supplier in the world. Recently, the company has made a major technological breakthrough in high-temperature single-chip SPM equipment, and has independent global intellectual property rights, becoming the second global supplier. It is expected that the potential market size of the company's SPM equipment will account for 25-30% of the total front cleaning market, and products with differentiated competitive advantages will help the company to increase its domestic and international market share. 2) The company continues to promote the research and development of supercritical CO2 cleaning and drying equipment verification work, the company's SCCO2 supercritical CO2 drying equipment will be specifically used for DRAM 18nm and below process node STI/SN layer drying.

Vertical furnace tube is developed according to LPCVD-oxidation furnace & diffusion furnace-ALD line, and ALD is progressing smoothly at present. The vertical furnace tube equipment developed by the company can be used in 12-inch wafer production line, mainly to achieve different types of thin film deposition process on the wafer surface, for different applications and process requirements for design and manufacturing, first focused on LPCVD equipment, and then to the oxidation furnace and diffusion furnace development, and finally gradually into the ALD equipment application. During the 23-year reporting period, the company further developed the plasma atomic layer deposition vertical furnace Ultra FnA based on the Ultra Fn vertical furnace equipment platform and the previously introduced thermal atomic layer deposition furnace tube technology (Ultra FnA). This equipment focuses on the research and development of core technology and strives to meet the high-end requirements of high-yield batch ALD process. It can meet the atomic layer deposition process and have low cumulative film thickness gas cleaning function, ensure the stability of the particles. Downstream application perspective, the future, HBM market will be the company's great growth point, the future of the company's furnace tube ALD equipment will also be applied to the HBM production line.

Advanced thin film PECVD,KrF Track and other differentiated product designs drive new growth. In terms of PECVD, the company's plasma enhanced chemical vapor deposition Ultra PmaxTMPECVD equipment is equipped with independent intellectual property cavity, gas distribution device and chuck design, which can provide better film uniformity, more optimized film stress and less particle characteristics. This year, PECVD will have 2-3 customers. At the same time, the company's Lingang Research Laboratory will also start operation from May to June, which will speed up the research and development progress of PECVD, cleaning equipment and furnace tube equipment. It is estimated that the process coverage rate of PECVD will be about 50% this year. In the front track, the first batch of process results are expected around June for ArF gum coating and development. Iterative products may be launched at the end of the year, with a higher capacity architecture design, applied to the KrF process, and equipped with back cleaning technology, when the immersion ArFi process glue development will also be launched simultaneously. In the future, the company's differentiated product design will generate greater value and benefits at the client end. In 2025-2026, the company's PECVD and Track began to achieve sales revenue. It is expected that with the continuous development of these two equipment markets, the company's high performance will be driven again.

investment suggestion: we expect the company to realize an income of 57/78/10.7 billion yuan in 2024/2025/2026 and a net profit of 11/16/2.5 billion yuan respectively. the current stock price corresponds to 31 times, 21 times and 14 times PE in 2024-2026 respectively, maintaining the "buy" rating.

Risk Alert: Risk of uncertainty in the external environment; Risk of technology iteration; Risk of market development less than expected; Risk of downstream expansion less than expected.

securities research report "shengmei Shanghai (688082): high temperature monolithic SPM & supercritical CO2 + furnace tube ALD, advanced thin film PECVD,KrF Track drives new growth"

Release date: June 11, 2024

Report Issued by: China Post Securities Co., Ltd.

Analyst: Wu Wenji SAC Number: S1340523050004

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