Technological breakthroughs

Comprehensive Analysis of the Specialty Electronic Chemical Industry - From Technology Applications to Market Dynamics

EXECUTIVE SUMMARY

The global high purity phosphoric acid (HPPA) market for the semiconductor industry was valued at USD 672 million in 2024 and is projected to reach USD 947 million by 2032, with a compound annual growth rate (CAGR) of 5.7% during the forecast period.

High purity phosphoric acid for semiconductor manufacturing is a specialized form of phosphoric acid with an exceptionally low level of impurities, a critical factor for producing high-quality integrated circuits. In the semiconductor industry, HPPA is primarily used for etching and cleaning silicon wafers during the fabrication process. The purity of the acid ensures that no contaminants interfere with the delicate processes involved in creating microelectronic devices.

MARKET CONTEXT

Role of HPPA in Semiconductor Manufacturing

In modern semiconductor chip manufacturing processes, chemical purity is a vital factor. High purity phosphoric acid plays a crucial role in two critical stages. First is etching, the process that creates complex circuit patterns on silicon wafers with nanometer-level precision. During this process, HPPA has the ability to selectively remove silicon nitride layers without affecting silicon dioxide, an essential characteristic for fabricating increasingly complex 3D semiconductor structures.

The second stage is cleaning, where HPPA is used to remove metallic contaminants from wafer surfaces. This cleaning process not only ensures high production yields but also maintains the integrity and performance of semiconductor components. This is particularly important for ultra-clean processes in advanced technology nodes, where even an infinitesimally small amount of impurity can cause serious product defects.

Importance of Purity Levels

The purity level of HPPA is classified according to impurity content, with three main grades used in the industry. The 75% purity grade is applied for basic applications, while the 85% purity grade serves intermediate applications. However, the above 85% purity segment is capturing the largest market share and showing the strongest growth trend.

The dominance of this ultra-pure segment stems from three main factors. First, it is an indispensable critical requirement for ultra-clean processes in advanced semiconductor fabrication, where cleanliness standards have been raised to unprecedented levels. Second, the highest-grade HPPA demonstrates superior performance in removing metallic contaminants without damaging silicon wafers - a very difficult technical balance to achieve. Finally, growing demand from advanced semiconductor nodes below 10nm, where increasingly stringent design rules require absolute purity, is strongly driving this market segment.

MARKET GROWTH DRIVERS

1. Global Semiconductor Industry Boom

The global semiconductor industry is experiencing an unprecedented expansion phase, strongly driving demand for high purity chemicals. The continuous miniaturization trend is leading the industry to transition to increasingly smaller technology nodes such as 5nm, 3nm, and even 2nm, which require much higher chemical purity than previous generations. Simultaneously, the increase in production capacity with new chip factories being built worldwide is creating enormous demand for HPPA. The diversification of applications from traditional smartphones to new fields such as electric vehicles, artificial intelligence, and the Internet of Things also contributes significantly to this growth.

In the global consumption landscape, the consumer electronics sector occupies the leading position with 40-45% market share, including devices such as smartphones, tablets, laptops, and smart home appliances. The automotive industry is emerging as an important growth driver with 20-25% market share, propelled by the electric vehicle revolution, advanced driver assistance systems, and autonomous vehicle technology. The telecommunications sector contributes 15-20% of demand through 5G network deployment, expansion of data center infrastructure, and network equipment upgrades. Finally, industrial applications account for 10-15% of the market, focusing on factory automation, robotics, and IoT sensors that are becoming increasingly prevalent in the Industry 4.0 era.

2. Semiconductor Technology Advances

The development of new chip architectures is placing increasingly high demands on production chemical quality. Advanced technologies such as FinFET and GAA (Gate-All-Around) require much more precise cleaning and etching processes compared to traditional planar transistor generations. The emergence of 3D semiconductors with complex multi-layer structures has significantly increased HPPA consumption per wafer due to the increased number of processing steps. Additionally, advanced packaging technologies such as chiplets and 3D stacking require many additional cleaning steps, contributing further to overall demand for high purity phosphoric acid.

In particular, technology nodes below 10nm are becoming the main premium driver of the market. As feature sizes decrease, purity requirements increase exponentially - an impurity level acceptable at the 28nm node can cause serious failures at the 5nm or 3nm node. The role of HPPA becomes even more critical in FinFET and GAA transistor architectures, where any contamination can affect the electrical characteristics of devices. Moreover, advanced packaging applications at these technology nodes consume more HPPA per wafer, due to more complex processes and higher cleanliness requirements in each manufacturing step.

3. Investment in Semiconductor Supply Chain

Governments worldwide are investing heavily in building autonomy in the semiconductor supply chain, creating an unprecedented wave of investment. In the United States, the CHIPS Act with a support package worth USD 52 billion is promoting the development of domestic semiconductor manufacturing, aimed at reducing dependence on Asia. The European Union is not standing aside in this race with the EU Chips Act setting a goal to capture 20% of global semiconductor manufacturing market share by 2030, accompanied by massive investments in manufacturing infrastructure.

China is pursuing its self-sufficiency ambition through the "Made in China 2025" strategy, setting a target to achieve 70% semiconductor autonomy by 2025, although currently facing many challenges due to technology restrictions. Meanwhile, countries with strong semiconductor foundations such as Japan, South Korea, and Taiwan continue to pour large amounts of capital to maintain and expand their leading positions in the industry.

These policy moves create direct and profound impacts on the HPPA market. The number of new chip manufacturing plants is increasing significantly worldwide, from Arizona and Ohio in the US to Dresden in Germany and many other locations in Asia. Each government emphasizes the importance of building domestic chemical supply chains to ensure supply security and reduce geopolitical risks. Simultaneously, quality standards are increasingly being raised as countries strive to achieve excellence in semiconductor manufacturing, which naturally leads to demand for higher quality and more stable HPPA.

MARKET SEGMENTATION ANALYSIS

Segmentation by Purity Level

Segmentation by Application

Etching - Strongest Application

Accounts for 55-60% of demand due to:

• Critical role in patterning semiconductor devices with nanometer precision
• Superior selectivity in removing silicon nitride layers
• Increasing complexity of 3D semiconductor structures

Cleaning

Accounts for 35-40% of demand:

• Removal of metallic impurities
• Surface preparation for subsequent steps
• Improved production yields

Others

Accounts for 5-10%:

• Equipment maintenance
• Special applications

Segmentation by End User

1. Foundries - 60-65% Market Share

Account for the majority of consumption due to:

• Trend of outsourcing semiconductor manufacturing
• Large capacity expansions of leading foundries for advanced nodes
• Strict quality requirements in contract manufacturing environment

Major foundries:

• TSMC (Taiwan): Accounts for >60% of global advanced chip production
• Samsung Foundry (South Korea)
• GlobalFoundries (USA)
• SMIC (China)

2. Integrated Device Manufacturers (IDMs) - 25-30% Market Share

Companies that produce their own chips:

• Intel (USA)
• Texas Instruments (USA)
• Infineon (Germany)
• STMicroelectronics (Switzerland/France)

3. Research Institutions - 5-10% Market Share

• Development of new technologies
• Small scale but high quality requirements

GEOGRAPHICAL ANALYSIS

Asia-Pacific: Global Manufacturing Hub

Market Share: 75-80% Global

The Asia-Pacific region dominates the HPPA market for semiconductor applications, driven by robust electronics manufacturing ecosystems.

Taiwan - Advanced Chip Manufacturing Center

• TSMC accounts for over 60% of global advanced semiconductor manufacturing
• TSMC's fabs require consistent HPPA supplies for sub-5nm chip production
• Stringent quality control protocols set global standards

South Korea - Memory Specialization

• South Korean memory chip manufacturers maintain dedicated phosphoric acid purification facilities
• SK Materials operates specialized high purity chemical plants supporting Samsung and SK Hynix
• Extreme purity requirements for DRAM and NAND flash production

China - Domestic Push

• Chinese chemical producers are rapidly upgrading capabilities
• Reducing reliance on Japanese and EU suppliers
• SMIC and Yangtze Memory Technologies are driving demand for domestic ultra-clean chemicals
• Hubei Xingfa Chemicals Group is a major domestic supplier

Japan - Technology Transfer

• Japanese chemical giants provide critical technology and joint ventures
• Mitsubishi Chemical and Stella Chemifa supply proprietary filtration systems
• Transfer of purification expertise to regional producers

Southeast Asia - Emerging Secondary Hubs

• Singapore and Malaysia hosting backend semiconductor packaging operations
• Medium-grade HPPA requirements
• Developing domestic production capabilities

North America: Innovation Center

Market Share: 12-15% Global

Key Drivers:

• CHIPS Act accelerating domestic semiconductor investment
• Intel's fabs in Arizona and Ohio
• GlobalFoundries facilities in the US
• Micron's memory expansion projects

Regional Suppliers:

• Emphasis on sustainable production methods
• Advanced purification technologies
• Tight integration between chemical producers and semiconductor equipment manufacturers

Europe: Specialized Applications

Market Share: 8-10% Global

Characteristics:

• Focus on specialized chips (automotive, industrial)
• Ultra-high purity HPPA requirements for automotive chips
• EU Chips Act supporting regional chemical supply chain development

Major Players:

• Infineon (Germany)
• NXP (Netherlands)
• STMicroelectronics (Switzerland/France)

Suppliers:

• BASF (Germany)
• Merck (Germany)
• Solvay (Belgium)

Middle East & Africa: Emerging Markets

Market Share: 1-2% Global

• Emerging as strategic location for semiconductor chemical production
• Leveraging low energy costs for purification processes
• Saudi Arabia's Wafer City development plans include onsite high purity chemical plants

South America: Consumption Market

Market Share: <1% Global

• Brazil's nascent semiconductor ecosystem
• Mainly a consumption market, importing HPPA
• Future development potential

COMPETITION AND LEADING COMPANIES

Competitive Characteristics

The HPPA market for semiconductor applications is a specialized segment dominated by a handful of global chemical conglomerates and highly focused specialty chemical manufacturers. Market leadership is consolidated among companies with:

• Extensive expertise in ultra-pure chemical production
• Deep-rooted relationships with major semiconductor fabricators
• Advanced production technologies
• Significant R&D investments
• Robust global supply chains

Leading Suppliers

1. Global Chemical Conglomerates

Arkema (France)

• Advanced purification technology
• Global distribution network
• Strong R&D investment

Solvay (Belgium)

• Diverse product portfolio
• Long-standing expertise in electronic chemicals
• Supplier to major foundries

BASF (Germany)

• World's largest chemical conglomerate
• Large-scale production capabilities
• Strong vertical integration

Honeywell (USA)

• Proprietary purification technology
• Focus on premium market
• Stringent quality management systems

2. Regional Specialty Manufacturers

Rin Kagaku Kogyo (Japan)

• Deep expertise in electronic chemicals
• Japanese quality standards
• Supply to Asian market

Rasa Industries (Japan)

• Focus on high-grade HPPA
• Long-term partnerships with Asian foundries
• Advanced purification technology

3. Asian Companies

ICL Group (Israel/China)

• Large-scale production
• Global network
• Competitive pricing

Hubei Xingfa Chemicals Group (China)

• China's largest HPPA producer
• Supporting China's localization strategy
• Rapid capacity expansion

OCI Company (South Korea)

• Supplier to Samsung and SK Hynix
• High quality standards
• Supply chain integration

SoulBrain (South Korea)

• Specialty in semiconductor chemicals
• Strategic partner of major foundries
• Proprietary technology

4. Specialty Materials Suppliers

CMC Materials/Entegris (USA)

• Comprehensive product portfolio
• Focus on premium segment
• In-depth technical services

KMG Chemicals (USA)

• Specialty in ultra-pure electronic chemicals
• Major foundry customers
• Continuous innovation

Mitsubishi Gas Chemical (Japan)

• Advanced purification technology
• Diverse HPPA product range
• Strong Asian distribution network

Kanto Chemical (Japan)

• High-quality electronic chemicals
• Stringent Japanese standards
• Domestic supply and export

Competitive Strategies

1. Technology Innovation

• Development of new purification processes
• Enhancement of purity levels (>99.999%)
• Cost reduction in production

2. Geographic Expansion

• Building plants near chip manufacturing centers
• Joint ventures with local partners
• Meeting domestic supply chain needs

3. Strategic Partnerships

• Long-term relationships with foundries
• Co-development of products
• Supply chain integration

4. Certifications and Standards

• ISO 9001, ISO 14001
• Certifications from major foundries
• Compliance with stringent environmental regulations

CHALLENGES AND BARRIERS

1. High Production Costs

Producing high purity phosphoric acid for semiconductor applications requires complex processes with sophisticated technology to achieve the necessary purity levels. This process typically involves multiple consecutive purification steps, each requiring strict control conditions and consuming significant resources. Initial equipment investment is extremely large, with advanced filtration systems, vacuum distillation equipment, and special clean rooms to avoid contamination during production.

Additionally, stringent quality control is an indispensable factor throughout the process. Continuous analysis to ensure purity requires advanced measurement equipment such as inductively coupled plasma mass spectrometry (ICP-MS) and high-performance liquid chromatography (HPLC), which are very expensive. Operating personnel also need high professional qualifications, from chemical engineers to quality assurance specialists, contributing to increased overall production costs. Raw material costs are also significant, including high-quality input materials, substantial energy for high-temperature purification processes, and many special auxiliary chemicals.

2. Raw Material Supply Volatility

Dependence on phosphate ore creates significant risks for the HPPA industry. Global phosphate ore supply is concentrated mainly in a few countries such as Morocco (accounting for about 70% of world reserves), China, and the USA, creating geographical imbalance. Phosphate ore prices often fluctuate strongly according to global commodity markets and are heavily influenced by geopolitical factors such as trade tensions, export policies, and regional instability.

A further complicating factor is the influence from the fertilizer market. Since phosphoric acid is primarily used in fertilizer production (accounting for over 80% of global demand), its price is strongly affected by agricultural cycles and global food demand. Supply competition between the semiconductor and agriculture sectors can lead to shortages and sudden price increases, especially during peak seasons or when there are disruptions in the global supply chain.

3. Environmental Regulations

The HPPA production process inevitably generates industrial waste, including gas emissions from distillation processes, wastewater containing metallic impurities, and solid residues from purification stages. Waste treatment requirements are becoming increasingly stringent, requiring large investments in advanced environmental treatment systems. Compliance costs can account for up to 15-20% of total production costs in some regions.

Increasingly strict environmental regulations worldwide place great pressure on manufacturers. In Europe, REACH and RoHS regulations impose strict requirements on chemical registration, assessment, and restriction. The US Environmental Protection Agency (EPA) also continuously updates emission standards and hazardous waste treatment requirements. In Asia, countries such as Japan, South Korea, and even China are raising their environmental standards, requiring manufacturers to continuously invest in greener technologies.

4. Market Entry Barriers

High technical requirements are the first barrier that new entrants must face. Expertise in chemical purification at ultra-pure levels requires many years of accumulated experience and technological know-how. Equipment investment can reach tens of millions of USD for a medium-scale production line, while product development time from testing phase to commercial production typically extends from 2-3 years.

Customer certification process is an equally challenging obstacle. Chip manufacturing plants (foundries) have extremely stringent new supplier approval processes, typically lasting 12-18 months with a series of tests on purity, stability, and supply capability. Each batch must be analyzed in detail, and even a small deviation in composition can lead to rejection of the entire batch. Long-term relationships between suppliers and customers are essential in this industry, creating a significant advantage for established companies.

Finally, competition with established suppliers creates difficult-to-overcome barriers. Market share in the HPPA industry is highly concentrated, with a few large companies controlling most of the market. These companies have advantages in production scale, customer relationships sustained over decades, and reputation built through years of providing stable products. This makes it very difficult for new entrants to penetrate the market, especially in the premium segment serving advanced technology nodes.

OPPORTUNITIES AND FUTURE TRENDS

1. Advanced Technology Nodes (<5nm)

Fastest Growth:

• TSMC, Samsung investing heavily in 3nm, 2nm
• Requirements for extremely high purity (>99.999%)
• High value addition

New Technologies:

• Gate-All-Around (GAA) transistors
• Chiplet and 3D packaging
• Increased HPPA consumption per wafer

2. Supply Chain Autonomy

Europe:

• EU Chips Act - 43 billion EUR investment
• Building new fabs (Intel, TSMC)
• Development of domestic chemical supply chain

United States:

• CHIPS Act - USD 52 billion
• New fabs from Intel, TSMC, Samsung
• Reducing dependence on Asia

China:

• Increasing domestic HPPA production capacity
• Reducing imports from Japan, EU
• Supporting domestic foundries

3. Emerging Applications

Electric Vehicles and Autonomous Driving:

• Increasing demand for power chips, sensors
• High reliability requirements
• Global EV market growing >20%/year

Artificial Intelligence (AI) and Data Centers:

• Specialized AI chips (GPU, TPU, NPU)
• Demand for high-end processing chips
• Large investments in AI infrastructure

Internet of Things (IoT):

• Billions of connected devices
• Sensor chips, microcontrollers
• Requirements for low-power, low-cost chips

5G and 6G:

• New network infrastructure
• Advanced RF, baseband chips
• Global deployment

4. Sustainable Production Technology

Reducing Environmental Impact:

• Greener purification processes
• Chemical recycling and reuse
• Renewable energy in production

Circular Economy:

• Recovery of phosphoric acid from waste
• Reducing dependence on new ore
• Cost and environmental efficiency

5. Digitalization and Automation

Smart Manufacturing:

• Real-time quality monitoring
• AI for process prediction and optimization
• Error reduction, efficiency increase

Digital Supply Chain:

• Complete traceability
• Smart inventory management
• Just-in-time delivery

MARKET FORECAST 2025-2032

Growth by Region

Growth by Purity Level

• 75% purity: Declining ~2% CAGR (replaced by higher grades)
• 85% purity: Growing ~4% CAGR (stable)
• >85% purity: Growing ~8% CAGR (strongest demand)

Growth by Application

• Etching: CAGR 6.5% (3D technology, advanced nodes)
• Cleaning: CAGR 5.0% (steady growth)
• Others: CAGR 4.0% (stable)

Market Value Forecast

IMPLICATIONS FOR VIETNAM

Potential and Opportunities

1. Role in Global Electronics Supply Chain

Vietnam is gradually becoming an important link in the global electronics supply chain:

• Electronics manufacturing: Major corporations like Samsung, Intel already present
• Semiconductor packaging: Potential for backend assembly development
• Electronic equipment: Large exports of phones, computers

2. Potential Demand

Although Vietnam does not yet have large-scale chip production, there are opportunities in:

• Research and development: Semiconductor R&D centers are developing
• Packaging and testing: Need pure chemicals for processes
• Education and training: Semiconductor laboratories at universities

3. Development Opportunities

• Distribution and logistics: Become distribution hub for Southeast Asia
• Technical services: Technical support for regional customers
• Auxiliary chemical production: Develop related chemical production capabilities

Challenges to Overcome

1. Technology and Expertise

• Lack of experience in ultra-pure chemical production
• Need for in-depth workforce training
• Research and development investment required

2. Initial Investment

• Expensive production equipment
• Complex process, long development cycle
• Large capital requirements

3. Regulations and Standards

• Need to establish national standards
• Quality assurance system
• Stringent environmental regulations

Recommendations

For Enterprises:

1. Collaborate with international manufacturers for technology transfer
2. Invest in R&D and workforce training
3. Start with distribution and technical services

For Government:

1. Build policies encouraging investment in electronic chemicals
2. Support international cooperation and technology transfer
3. Develop specialized industrial zones for electronic chemicals

For Educational Institutions:

1. Develop semiconductor chemistry training programs
2. Collaborate with enterprises in practical training
3. Research applications suitable for Vietnamese conditions

CONCLUSION

The global high purity phosphoric acid market for the semiconductor industry is on a solid growth trajectory, driven by the continuous development of the semiconductor industry and the increasing demand for advanced electronic devices.

Key Highlights:

Market Growth:

• Market value from USD 672 million (2024) to USD 947 million (2032)
• CAGR 5.7% - stable and sustainable growth
• Asia-Pacific leads with 75-80% market share

Main Drivers:

• Chip miniaturization (nodes <10nm, <5nm)
• Semiconductor supply chain autonomy
• New applications (EV, AI, 5G, IoT)
• Government investments (CHIPS Act, EU Chips Act, Made in China 2025)

Challenges:

• High production costs
• Stringent quality control
• Raw material volatility
• Environmental regulations

Opportunities:

• Advanced technology (<5nm nodes)
• Production localization
• Sustainable manufacturing
• Digitalization and automation

The HPPA market is not only a specialty chemical industry but also an essential foundation for the digital technology revolution. With its critical role in semiconductor chip production - the heart of all modern electronic devices - HPPA will continue to be a key factor ensuring the quality and performance of high-tech products.

For Vietnam, although currently not a major player in this market, with its increasingly important position in the global electronics supply chain and the development of supporting industries, the country has many opportunities to participate in this potential field in the future.

This report is compiled from public market data, industry analysis, and global semiconductor technology trends. Data sources: Industry reports, announcements from major semiconductor and chemical companies, semiconductor industry expert analysis.

Publication Date: December 2025

Category: Chemical Market - Semiconductor Industry

Scope: Global with detailed regional analysis