Global supply of electronic grade hydrofluoric acid (EHF) is tightening, driven by rising upstream raw material costs and growing demand from the AI semiconductor sector. This has led several major suppliers to raise product prices, with overall increases ranging from approximately 20% to 30%.
Orient Securities Company Limited notes that the high-end G5 grade EHF market is currently dominated by Japanese firms. However, these Japanese manufacturers show limited willingness to expand production capacity. In contrast, domestic Chinese companies are making significant strides in breaking into the high-end market. For instance, Do-Fluoride New Materials Co., Ltd's G5 grade product has achieved stable, bulk supply to leading global manufacturers like TSMC and Samsung.
Key Market Drivers and Analysis
EHF is a core wet electronic chemical in semiconductor and microelectronics manufacturing, primarily used in critical processes such as cleaning and etching within integrated circuits. The highest grade is classified as UPSSS (semi G5). The industry faces high technical barriers, and the current price hikes reflect the supply-demand imbalance.
Supply Side: High-End Dominance and Domestic Progress
Japanese companies like Stella Chemifa Corp and Morita Chemical Industries Co., Ltd lead the global G5 grade EHF market. Their main production facilities have long service histories, and their expansion plans are conservative, limiting global growth in high-end capacity.
Chinese firms are actively overcoming high-end production challenges. Beyond Do-Fluoride New Materials Co., Ltd, other notable players include Binzhou Chemical Industry Co., Ltd, which has an annual EHF design capacity of 6,000 tons with purity exceeding the international SEMI C12 standard for G5 grade. Zhongju Semiconductor Materials Co., Ltd is one of the few domestic companies capable of stably supplying EHF for 12-inch, 1Xnm process node manufacturing. Zhejiang Sanmei Chemical Ind. Co., Ltd is also involved, with a project for 52,000 tons of high-purity electronic grade hydrofluoric acid.
Demand Side: Growth Fueled by Semiconductor Expansion
Demand from EHF's primary downstream sectors is expected to remain robust. According to industry forecasts, global silicon wafer shipments bottomed out in 2025 and are projected to grow steadily through 2028. Furthermore, demand for display panels is anticipated to recover, and the market value for DRAM and NAND Flash memory is forecast to expand significantly in the coming years. This multi-sector demand synergy is likely to drive sustained growth for EHF.
Investment Outlook and Related Considerations
The concurrent demand growth across multiple end-use sectors for EHF, coupled with the ongoing breakthroughs in domestic high-end production challenging the long-standing Japanese supply dominance, presents a favorable outlook. Companies with well-established industry chain layouts and proven high-end EHF supply capabilities are well-positioned.
Potential Risks to Monitor
Key risks include potential delays in the technical certification process for electronic-grade products, significant capacity expansion on the supply side, substantial volatility in raw material prices, and a downturn in downstream demand.