Analysis of Synergy Between Nanda Optoelectronic's Silicon Precursor Materials and Photoresist Business

Based on the collected information and data, I will provide you with a systematic analysis of the synergy between Nanda Optoelectronic’s silicon precursor materials and photoresist business.

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According to the latest financial data, Nanda Optoelectronic (300346.SZ)'s first-half 2025 revenue structure presents a “three pillars” pattern:

Business Segment	Revenue Share	Gross Margin	Business Positioning
Electronic Special Gases	60.1%	46.13%	Core Pillar Business
Precursor Materials	27.8%	39.9%	High-Growth Potential Business
Photoresist and Supporting Materials	~12%	—	Strategic Layout Business

The company is the only domestic semiconductor material enterprise with mass production capabilities for both

and . This “dual-wheel drive” model is unique among domestic semiconductor material enterprises [0][1].

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Nanda Optoelectronic’s silicon precursor business has achieved

, including:

• Metal Precursors
  : Trimethylgallium (TMGa), Trimethylindium (TMIn), Trimethylaluminum (TMA), Triethylgallium (TEGa)
• Silicon Precursors
  : A variety of new silicon-based precursor products
• High-k Materials
  : High-k trimethylaluminum (used for advanced process gate dielectrics)

In 2023, the company mass-produced

, marking a major breakthrough in the field of precursors for advanced processes [1]. In 2023, the company’s advanced semiconductor precursor sales exceeded RMB 100 million for the first time, becoming the main growth driver for its performance.

Indicator	Data
Precursor Materials Sales Volume (2024)	208.92 tons (YoY growth of 62.22%)
Precursor Business Revenue (2024)	RMB 340 million (YoY growth of 17.86%)
Capacity Utilization Rate (1H2025)	93.15% (Tight Supply)
Global Market Share of MO Sources (2019)	Ranked No. 1 Globally

Nanda Optoelectronic is one of the world’s leading MO source manufacturers. Its products not only realize domestic import substitution but also are exported to Europe, America, and the Asia-Pacific region [1].

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Nanda Optoelectronic’s photoresist business is mainly carried out by its holding subsidiary

:

• ArF Photoresist
  : The company is the first domestic manufacturer to pass customer verification for ArF photoresist [1]
• Capacity Layout
  : A 25-ton annual production line for ArF photoresist has been completed (a 50-ton annual production line will be completed in 2025)
• Sales Performance
  : In 2024, sales of ArF photoresist exceeded RMB 10 million, and continuous stable supply has been maintained in 2025

Nanda Optoelectronic’s technological layout in the photoresist field includes:

• Dry ArF photoresist
• Immersion ArF photoresist (used for advanced processes of 28nm and below)
• Multiple KrF photoresists under development

The company undertakes the National 02 Special Projects: “Key Technology R&D Project for High-Resolution Photoresist and Advanced Packaging Photoresist Products” and “ArF Photoresist Development and Industrialization Project”, and is a leading domestic enterprise in R&D and industrialization of ArF photoresist [1].

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In semiconductor manufacturing, precursor materials and photoresist form a

:

Process Step	Materials Used	Synergy Mechanism
Thin Film Deposition	Silicon Precursors (ALD/CVD)	Forms various functional thin film layers
Photoresist Coating	Photoresist	Carrier for pattern transfer
Exposure and Development	Photoresist	Precise pattern transfer
Etching	Hard mask generated from precursors	Transfers pattern to thin film

As process nodes evolve to 28nm, 14nm and below,

:

• Multi-Patterning Technology
  : During the transition from DUV lithography to EUV lithography, ALD precursors are required to cooperate with photoresist to achieve self-aligned double patterning (SADP)
• Ultra-Thin Film Layer Control
  : Advanced processes require atomic-level thin film thickness control (a core advantage of ALD technology)
• High Purity Requirements
  : Both require purity control at the ppt level [2]

Nanda Optoelectronic has simultaneous layouts in:

• Silicon Precursors
  : Used to form functional thin films such as SiO₂, Si₃N₄, SiOCN
• Photoresist
  : Photosensitive resin material used for pattern transfer

These two materials form a

in advanced packaging and logic chip manufacturing, enabling the company to provide customers with [2][3].

According to the company’s announcement, photoresist and supporting materials, as well as ALD/CVD precursor products, are all applied to

, and the customer groups are [1].

Customer Type	Potential Customers
Wafer Foundries	SMIC, Hua Hong Semiconductor, Yangtze Memory Technologies
LED Chip Manufacturers	Sanan Optoelectronics, HC SemiTek, etc.
Advanced Packaging Enterprises	JCET, Tongfu Microelectronics, etc.

:

• Once precursor products enter a customer’s supply chain, they can provide
  channel reuse
  for the introduction of photoresist products
• The technical verification of the two products can
  mutually validate
  each other, enhancing customer trust
• The procurement of two types of products by the same customer helps form a
  one-stop service
  advantage

Synergy Dimension	Specific Performance
Technical Talents	The semiconductor material R&D team can cover both precursors and photoresist
R&D Investment	In 2021, the company’s R&D expense ratio reached 20.11%, forming technological accumulation [1]
Equipment Sharing	Some analytical and testing equipment can be shared, reducing R&D costs
Patent Layout	Constructs a patent barrier through the acquisition of DuPont’s silicon precursor patents

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Material Type	Global Market Size (2024)	Domestic Substitution Space
Semiconductor Precursors	Approximately USD 3 billion	Localization rate less than 10%
Photoresist	Approximately USD 10 billion	Localization rate of high-end ArF/KrF <5%

The combined market size of the two is huge, and both are in the

[1][2].

Business Segment	Gross Margin Level	Synergy Effect
Precursor Materials	39.9%	High technological barriers, strong profitability
Photoresist	~50% (industry average)	High-margin business, expected to enhance overall profitability after mass production
Electronic Special Gases	46.13%	Stable cash flow supports R&D investment

The high gross margin characteristic of the precursor business (maintained at around 50% for years) effectively boosts the company’s overall profitability. Once the photoresist business scales up, it will form a

[1].

Capacity Project	Expected Capacity	Status
Industrialization Project of 45 Tons/Year Semiconductor Precursors for Advanced Processes	45 tons	Completed
ArF Photoresist Production Line	50 tons/year	To be completed in 2025
Ulan Qab Nanda Microelectronics (NF₃/WF₆)	7200 tons/500 tons	Under construction

The synergistic layout of capacity helps the company form

and reduce unit costs [1].

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• Photoresist Business
  : High stickiness between downstream integrated circuit manufacturing enterprises and upstream photoresist manufacturers, resulting in high customer barriers
• Precursor Business
  : It takes at least five years from product R&D to mass production

• Both precursors and photoresist require
  R&D matching the product and technological iteration of clients
• Advanced processes have continuously increasing requirements for material performance, leading to great pressure of technological update

• The precursor market is dominated by international giants such as Merck, Air Products, and Linde
• The photoresist market has long been monopolized by Japanese companies such as JSR, Shin-Etsu Chemical, and Tokyo Ohka Kogyo

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1. Scarcity
   : The only domestic enterprise with mass production of both precursors and ArF photoresist
2. Technological Barriers
   : Undertakes National 02 Special Projects and owns independent intellectual property rights
3. Customer Resources
   : Products have been supplied to leading customers such as SMIC and Yangtze Memory Technologies
4. Growth Space
   : Precursor sales exceed RMB 100 million, and the photoresist business has just entered the scaling-up phase

Indicator	Focus Area
Revenue Growth Rate of Precursor Business	YoY growth of 17.86% in 2024, whether high growth can be sustained
Photoresist Order Status	Sales exceeded RMB 10 million in 2024, what is the growth rate in 2025
Capacity Utilization Rate	93.15% capacity utilization rate of precursors in 1H2025, whether it remains saturated
Change in Gross Margin	39.9% gross margin of precursors, whether it is affected by price competition

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Nanda Optoelectronic’s silicon precursor materials and photoresist business have

:

1. Process Synergy
   : Forms a complete process chain of “Deposition - Lithography - Etching”
2. Customer Synergy
   : Shares semiconductor manufacturing customer resources, reducing introduction costs
3. Technological Synergy
   : Advanced processes put forward common technical requirements for the two materials
4. Strategic Synergy
   : Forms a “dual-wheel drive” business layout, enhancing risk resistance

This synergistic layout gives Nanda Optoelectronic a

among domestic semiconductor material enterprises, and it is expected to fully benefit from the wave of domestic substitution of semiconductor materials. It is recommended to focus on the order breakthrough progress of the company’s photoresist business and the capacity release rhythm of the precursor business.

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[0] Jinling API - Company Profile and Financial Data of Nanda Optoelectronic (300346.SZ)

[1] Futu News - “Domestic Photoresist, Who Will Laugh Last?” (https://news.futunn.com/post/66459902)

[2] GF Securities - In-Depth Research Report of ZenFan Tech (688596.SH) (https://pdf.dfcfw.com/pdf/H3_AP202309151598504756_1.pdf)

[3] Jishulink - “Core Process of Chip Manufacturing: Understand Thin Film Deposition in One Article” (https://www.jishulink.com/post/1877926)