According to a research report released by Guotou Securities, the core contradiction in the current electronic grade hydroxylamine industry chain lies in the mismatch between demand growth driven by AI computing power and stock supply constraints. On the demand side, the growth of AI computing power is driving the aggressive expansion of HBM and DRAM production capacity, as well as the miniaturization of advanced logic processes and the stacking of 3D NAND layers, resulting in an absolute increase in wafer production capacity and a significant increase in the proportion of wet cleaning steps in high aspect ratios and complex multi-layer metal structures. On the supply side, BASF's production capacity is physically embedded in the main caprolactam plant, lacking independent expansion motivation. Coupled with high energy and carbon costs in Europe, its supply elasticity continues to be tight. In this context, domestic enterprises have ushered in a breakthrough opportunity by optimizing their process routes.
The main viewpoints of Guotou Securities are as follows:
The expansion of AI computing power drives the increment of advanced cleaning consumables
Hydroxyamine, with its dual properties of strong reducibility and weak alkalinity, can effectively decompose metal oxides and cross-linking residues that are difficult to remove by traditional solvents and plasma ashing through redox and nucleophilic reactions. Although cleaning agents have undergone four generations of technological evolution, in advanced logic, 3D NAND, and G5 high-end scenarios, the hydroxylamine free solution is limited by extreme corrosion margins, deep hole mass transfer limitations, and metal protection requirements, making it difficult to achieve complete replacement. This has established hydroxylamine as a process must-have in high-end wet cleaning. With the increasing demand for AI computing power, the aggressive expansion of HBM/DRAM production capacity and the stacking of 3D NAND layers have driven a dual leap in wafer production capacity and cleaning process frequency. It is expected that by 2030, the theoretical demand for G4/G5 grade electronic hydroxylamine worldwide will reach 20500 tons, with a compound annual growth rate of 13.5% between 2024 and 2030.
Domestic substitution under process route reconstruction
Electronic grade hydroxylamine is subject to extreme purity requirements at ppb/ppt levels, long-term wafer fab certification of 2-3 years, and high-risk safety production barriers, resulting in a long-term tight and highly concentrated supply in the industry. The production capacity of overseas leader BASF is physically embedded in the main unit of caprolactam. Without independent expansion motivation, it also faces high energy and carbon tax costs in Europe, resulting in weakened supply elasticity. Domestic enterprises have switched to a green circular industry chain centered on ketoxime hydrolysis through bottom-up process routes, which not only achieves closed-loop utilization of materials and independent supply of hydroxylamine, freeing them from physical dependence on the main equipment, but also significantly reduces the overall cost. After crossing the barriers of purity and certification, it is expected to achieve rapid penetration of market share.
Domestic production fills the gap in total volume, but there is still a structural shortage in high-end supply
On the supply side, assuming BASF maintains a stock capacity of approximately 7200 tons per year, domestic expansion has become the core source of global supply growth. Driven by this, the global supply-demand gap may gradually converge. However, the actual effective supply of high-end products such as G5 level is still deeply constrained by extreme purity control, process adaptation capabilities, and long-term wafer fab customer certification barriers. On the price side, the short-term tight supply and demand will support product prices to maintain an upward channel. With the concentrated realization of domestic production capacity after 2028, it is expected that product prices will face some downward pressure. However, with its technological barriers and electronic grade material properties, its price center will still be significantly higher than traditional industrial grade products.
