Electronic gases are a high-value, sustained category within cleanrooms and a crucial consumable in semiconductor manufacturing that cannot be overlooked, possessing significant "chokepoint" characteristics. Electronic specialty gases are often supplied via retail models with high technical barriers; this model is asset-light but places high demands on logistics and distribution management capabilities. Three primary drivers—domestic substitution, process iteration, and accelerated capacity expansion—are propelling the domestic industrial gas sector's upward momentum.

Industry Chain: Electronic gases are a high-value, sustained category in cleanrooms, an indispensable consumable in semiconductor manufacturing. Upstream, the chain includes mineral resources, air, and natural gas. Downstream, in China's electronic specialty gas demand structure, integrated circuits/display panels/photovoltaics/LED account for 42%/37%/13%/8%, respectively. They are categorized into electronic bulk gases and electronic specialty gases. Electronic bulk gases include nitrogen, helium, oxygen, hydrogen, argon, and carbon dioxide, with nitrogen constituting over 90% of bulk gas usage, serving multiple functions in manufacturing as environmental, protective, cleaning, and carrier gases. Electronic specialty gases are highly fragmented, with over 100 types involved in semiconductor production, extensively covering core processes like etching, cleaning, film formation, lithography, doping, and deposition. Among these, nitrogen trifluoride/silane/tungsten hexafluoride account for 28%/19%/17% of usage, respectively. In terms of strategic importance, electronic gases possess significant "chokepoint" attributes: (1) Supply must be continuous and uninterrupted under sustained semiconductor production, making inventory buffering difficult. (2) Purity directly impacts semiconductor wafer manufacturing yields. (3) They have consumable characteristics; electronic gases are a vital material in semiconductor manufacturing, accounting for approximately 13% of wafer fabrication costs.

Business Model: On-site gas generation is typically for bulk gases and is asset-heavy, while electronic specialty gases often involve retail supply with high technical barriers. (1) The production mode determines cost and barriers: Air separation: Representative gases include bulk gases like nitrogen, oxygen, and argon. Primary costs are electricity and equipment depreciation, with core barriers lying in ultra-high purity, detection technology, and uninterrupted supply. Chemical synthesis: Representative gases include specialty gases like nitrogen trifluoride and tungsten hexafluoride. Core costs are raw materials and depreciation of complex technical process equipment. Technical barriers are reflected in synthesis, purification, trace analysis, packaging/cylinder handling, and related steps. Beyond these two main paths, some electronic gas companies purify and sell industrial-grade raw materials, crude products, or waste gases, earning a purity premium, with helium being a representative example. (2) Daily usage and production path determine the sales model: On-site gas generation: Typically serves large semiconductor, panel, or photovoltaic manufacturers. Suppliers must build gas generation facilities within or adjacent to the customer's plant, delivering gas directly to production workshops via pipelines—a capital-intensive model. Under this model, gas producers usually sign 10-15 year long-term service contracts with clients, contributing stable cash flow and profits. Retail gas supply: Primarily serves small-to-medium-sized customers or applications with fluctuating gas demand, such as electronic specialty gases. It employs methods like tanker transportation, cylinder filling, or liquid storage tanks to deliver liquid or gaseous products to customer sites. This model is asset-light but requires strong management capabilities for the logistics and distribution system.

Drivers & Market Potential: Three primary drivers—domestic substitution, process iteration, and accelerated capacity expansion—are propelling the domestic gas industry's upward trend. Driver 1: Increased penetration by domestic firms. The localization rate of China's electronic specialty gases has risen from 9% in 2018 to 14% in 2020 and is expected to reach 25% by 2025. Around 2025, domestic companies are projected to cover less than 30% of the electronic specialty gas varieties used in integrated circuit manufacturing. With policy support, domestic firms are accelerating capacity expansion and new product R&D, and the localization rate is expected to continue rising. By 2025, China Shipbuilding Industry Group Power Co., Ltd (Specialty Gas) has expanded its portfolio of electronic specialty gases achieving domestic mass production to 73 types. Guangdong Huate Gas Co., Ltd has achieved import substitution for over 50 electronic specialty gas products, with coverage exceeding 85% among domestic 12-inch wafer manufacturing customers. Driver 2: Continuous process iteration drives non-linear growth in gas consumption. The number of etching steps for 65/14/7/5nm processes is 20/64/140/160, respectively. As NAND stacking layers advance from 32 to 128 layers, the number of step etching steps alone surges from 4 to 16. The increase in etching steps drives up the usage of electronic gases in related areas like cleaning, exhaust gas treatment, and process chamber maintenance. Driver 3: Accelerated construction of domestic wafer fabs and continuous growth in equivalent wafer capacity. Expansion in memory and logic is vigorous, with continuous breakthroughs in advanced processes, accelerating domestic wafer fab expansion. According to ForSilicon Research, domestic monthly wafer capacity is projected to reach 14.8 million wafers by 2030, a 104% increase from the actual capacity expected in 2025. The domestic electronic gas market is estimated to reach RMB 70.6 billion by 2030.

Investment Recommendations: Focus on China Shipbuilding Industry Group Power Co., Ltd (Specialty Gas) (specializing in domestic substitution for tungsten hexafluoride and nitrogen trifluoride), Guangdong Huate Gas Co., Ltd (lithography gases, high-end niche varieties, and a platform company for import substitution), and Jinhong Gas Co., Ltd (with a presence in both electronic specialty gases and helium supply elasticity, possessing low-cost helium resources).

Risk Warnings: Downstream demand may fall short of expectations; risks of overcapacity; geopolitical risks.