A quiet price surge is underway in a seemingly minor yet indispensable part of the semiconductor supply chain, even as AI computing power, optical modules, and servers dominate tech headlines. Electronic grade hydrofluoric acid (EG-HF), a crucial but low-cost "invisible key material" in chip manufacturing, is now in the spotlight. Reports indicate that major foundries including TSMC, Samsung, and SK Hynix are actively securing supplies of EG-HF.

This year, geopolitical tensions in the Middle East have driven up prices for sulfur, sulfuric acid, and anhydrous hydrofluoric acid, subsequently increasing the production cost of EG-HF. Several suppliers have already raised their prices by approximately 20% to 30%. According to industry data, domestic prices for UP/UPS grade EG-HF in China reached 7,885/8,750 yuan per ton on June 29th, marking increases of 19% and 17% since the start of the year. This price surge is attributed not only to rising costs for raw materials like sulfuric acid and fluorite but also to robust demand fueled by AI computing expansion and semiconductor manufacturing upgrades.

Essential Role in Chipmaking

EG-HF is an indispensable cleaning agent and etchant in semiconductor fabrication, often called the "chemical key." It is one of the most widely used and demand-inelastic wet electronic chemicals in integrated circuit manufacturing. Produced by purifying anhydrous hydrofluoric acid and absorbing it into ultra-pure water, its unique property—where fluoride ions react with silicon dioxide (the core substrate of wafers)—makes it irreplaceable. It is primarily used for wafer cleaning and etching to achieve precise surface patterning.

High-Grade Supply Constraints

The chemical is categorized into multiple grades like EL, UP, UPS, and UPSSS (G5 grade for semiconductors). UPSSS, the highest grade used for advanced sub-55nm processes on 12-inch wafers, carries significantly higher technical barriers and pricing. Global leaders in G5-grade HF are primarily Japanese and Korean firms. Due to these high technical barriers, global supply of the highest-specification G5 grade EG-HF remains relatively tight.

Major producers are expanding capacity, with some projects expected to be completed by 2027. Furthermore, reports suggest that South Korean semiconductor material firms, which source about 90% of their anhydrous hydrofluoric acid from China, have recently been forced to make large-scale purchases from China at elevated prices, highlighting the supply strain for high-grade products.

Strong Demand Outlook

On the demand side, semiconductor manufacturing upgrades driven by AI computing provide solid support for high-purity EG-HF. Analyst estimates based on industry data project that by 2028, monthly 12-inch wafer capacity in mainland China could exceed 3.5 million wafers. Assuming a consumption of 2.5-3kg of EG-HF per wafer, annual demand could reach 100,000 to 120,000 tons. With G5-grade products potentially accounting for 40-50% of this, demand for G5-grade HF could reach 50,000-60,000 tons annually by 2028, representing a 30-50% increase from 2025 levels. Effective domestic capacity for G5-grade HF in China is estimated at 70,000-100,000 tons per year by the end of 2025.

Related Companies

DONGYUE GROUP (00189): Reports indicate the company has established production lines for G5-grade EG-HF, with process standards benchmarked against imported Japanese and Korean products. Its electronic-grade product capacity ranks among the industry leaders, supplying both domestic and international premium semiconductor clients. Its electronic fluorination fluid product has reportedly passed production line testing for the wafer cleaning process at SMIC's 14nm logic chip facility.

Do-Fluoride New Materials Co.,Ltd. (002407.SZ): According to a recent investor relations update, the company's current semiconductor-grade hydrofluoric acid capacity stands at 40,000 tons, operating at a high utilization rate. Current market prices have risen approximately 20%-30%, providing solid support for profitability. The company's self-developed G5-grade semiconductor hydrofluoric acid is stably supplied in volume to leading global manufacturers like TSMC, Samsung, Hua Hong, and ChangXin Memory Technologies. Its electronic-grade ammonia product has also passed certification by a leading global semiconductor firm and achieved stable volume supply.

Bluestar (Beijing) New Chemical Materials Co., Ltd. (601678.SH): The company disclosed in a stock trading anomaly announcement that it has noted recent market attention on the fluorochemical sector. In 2025, the company's electronic-grade hydrofluoric acid output was 6,405 tons, generating sales revenue of 63.3958 million yuan, accounting for 0.43% of its total operating revenue.