For NF3, we have 95 per­cent of mar­ket share do­mes­ti­cally and 30 per­cent in­ter­na­tion­ally. ”

China Daily (Latin America Weekly) - - Business -

Not many might be aware that a Chi­nese en­tity called the 718th Re­search In­sti­tute is the world’s third-largest man­u­fac­turer of in­dus­trial gases such as ni­tro­gen tri­flu­o­ride or NF3 and tung­sten hex­aflu­o­ride or WF6.

These gases are used widely in in­dus­tries such as semi­con­duc­tors and so­lar en­ergy.

Semi­con­duc­tors are key to many high-tech in­dus­tries. They are used ex­ten­sively in com­put­ing, com­mu­ni­ca­tion, in­for­ma­tion stor­age and pro­cess­ing, elec­tronic counter mea­sure­ments and even in up­grades of mil­i­tary weapons. They also play a sig­nif­i­cant role in sus­tain­ing eco­nomic growth and in na­tional se­cu­rity.

The in­sti­tute sup­plies its prod­ucts to do­mes­tic com­pa­nies such as Semi­con­duc­tor Man­u­fac­tur­ing In­ter­na­tional Cor­po­ra­tion, as well as ex­port­ing them to the United States, Ja­pan, France, Ger­many and Sin­ga­pore. Among its prom­i­nent clients are In­tel, Toshiba and Sam­sung.

To reach the stage where the global NF3 and WF6 mar­ket pin­na­cle ap­pears within grasp, the He­bei-based 718th Re­search In­sti­tute, a sub­sidiary of China Ship­ping In­dus­try Cor­po­ra­tion, had to toil for decades — more than five decades, to be pre­cise.

“We’ve over 50 years’ ex­pe­ri­ence in pro­duc­ing gases from hy­dro­gen, oxy­gen, toxic and haz­ardous gases. We’ve been work­ing on spe­cial gases for over four decades,” said Li Jun­hua, head of the in­sti­tute.

“For NF3, we have 95 per­cent of mar­ket share do­mes­ti­cally and 30 per­cent in­ter­na­tion­ally. We also sup­ply 40 per­cent of WF6 to the global mar­ket.”

The jour­ney will likely get tougher go­ing for­ward, as the State-owned spe­cial gases man­u­fac­turer is seek­ing to ex­pand its busi­ness glob­ally. head of the 718th Re­search In­sti­tute

Through­out its jour­ney so far, the in­sti­tute notched up sev­eral cred­itable achieve­ments.

For in­stance, it helped China to over­come de­pen­dency on NF3 im­ports. It has spent the past five decades devel­op­ing spe­cial gases for com­mer­cial and mil­i­tary use in spite of the fact that the mar­ket has been dom­i­nated by in­ter­na­tional com­pa­nies.

Thanks to its per­sis­tent ef­forts and per­se­ver­ance, the in­sti­tute is now able to serve both do­mes­tic and ex­port mar­kets for NF3 and WF6.

“The coun­try is en­ter­ing a strate­gic phase in the devel­op­ment of elec­tron­ics and in­for­ma­tion tech­nol­ogy in­dus­tries,” Li said. “We’re well-pre­pared for the chal­lenges ahead (as these in­dus­tries will need spe­cial gases).”

In­dus­trial gases are used as ba­sic raw ma­te­rial in the pro­duc­tion of in­te­grated cir­cuits, semi­con­duc­tors, op­tic fiber, so­lar power bat­ter­ies and many other high-tech prod­ucts.

With the global elec­tron­ics in­dus­try grow­ing rapidly in re­cent decades, de­mand for spe­cial gases such as NF3 has soared. So has the price of im­ported gas, to $300 per kilo­gram in the year 2000.

China alone used 2.5-bil­lionyuan ($390 mil­lion) worth of spe­cial gas in the semi­con­duc­tor mar­ket and spent 2.2 bil­lion yuan for spe­cial gas in the panel dis­plays mar­ket in 2016. China con­sumed 1,150 met­ric tons of NF3 in 2010, and sees growth of 20 per­cent an­nu­ally.

“With the deep­en­ing in­te­gra­tion be­tween mil­i­tary and civil­ian in­dus­tries, the in­sti­tute has suc­cess­fully de­vel­oped spe­cial gases with high pu­rity. It also has been able to ap­ply its tech­nol­ogy for mass pro­duc­tion, fill­ing a gap in the do­mes­tic mar­ket. This has helped lower the costs to one­tenth of past lev­els,” said Guo Jianzeng, deputy head of the in­sti­tute.

“The in­sti­tute’s suc­cess has ended China’s ut­ter de­pen­dence on im­ports. It also meant a lot to the devel­op­ment of do­mes­tic semi­con­duc­tors and the liq­uid-crys­tal panel sec­tor.”

The an­nual pro­duc­tion ca­pac­ity of the in­sti­tute’s man­u­fac­tur­ing plant for NF3 was 300 tons when it be­gan mass pro­duc­tion in 2016. The ca­pac­ity has grown since by leaps and bounds. The cur­rent NF3 an­nual ca­pac­ity is 9,000 tons while that for WF6 is 1,300 tons.

To fur­ther ex­pand its pro­duc­tion ca­pac­ity and di­ver­sify its prod­uct port­fo­lio of spe­cial gases, the in­sti­tute has firmed up a struc­tured plan.

Un­der the first phase which be­gan last April, the in­sti­tute set up a spe­cial gases man­u­fac­tur­ing plant at Feix­i­ang on the out­skirts of Han­dan, He­bei prov­ince, at a cost of about 3.2 bil­lion yuan.

In less than a year, the new plant was built with more than 5,000 ma­chines and 39 build­ings, cov­er­ing 100,000 square me­ters.

The in­sti­tute ex­pects to in­crease the an­nual pro­duc­tion ca­pac­ity of NF3 and WF6 to 12,000 tons and 2,000 tons, re­spec­tively, by 2020. The com­bined pro­duc­tion value at those lev­els would be 4.5 bil­lion yuan.

Ac­cord­ing to LEK Con­sult­ing, the in­dus­trial gases mar­ket will see dou­ble-digit growth, and sales rev­enue is ex­pected to reach 135 bil­lion yuan this year.

The in­sti­tute’s rev­enue in 2020 is ex­pected to reach 6.4 bil­lion yuan, a leap frog jump from 94 mil­lion yuan in 2000.

Given this back­drop, do­mes­tic com­pa­nies should en­hance their com­pet­i­tive edge to re­duce de­pen­dence on im­ports, a re­port from LEK Con­sult­ing stated. Most Chi­nese man­u­fac­tur­ers of in­dus­trial gases are not com­pet­i­tive enough against their for­eign coun­ter­parts, it said.

The do­mes­tic com­pa­nies need to fur­ther en­hance their re­search and devel­op­ment of tech­nol­ogy, lower costs and op­ti­mize their ser­vices to com­pete with for­eign com­pa­nies, the re­port said.

Li Jun­hua,


A worker mea­sures the pres­sure in a gas tank at a man­u­fac­tur­ing plant of the 718th Re­search In­sti­tute.

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