AI Computing Power Drives 20%-30% Price Hike in Electronic-Grade Hydrofluoric Acid
Claire Weston
TSMC, Samsung, and SK Hynix are scrambling for electronic-grade hydrofluoric acid — a key chip-cleaning chemical — and some suppliers have already raised prices by 20–30%. This means → the cost pressure from AI's compute buildout is now reaching upstream chemical supply chains.
What is electronic-grade HF, and why can't chips be made without it?
Electronic-grade hydrofluoric acid — ultra-pure HF used to clean and etch wafer surfaces — is one of the highest-volume wet chemicals in chip manufacturing, often called the "chemical key" to fabrication.
The top specification, G5-grade (UPSSS), serves 12-inch wafers at 55 nm and below. Its technical barriers and pricing sit far above lower grades.
Global G5 supply is limited. Leading producers are concentrated in Japan (Stella Chemifa, Kanto Chemical) and South Korea (Soulbrain, ENF Technology).
How big is this price increase, and what is driving it?
Per Baichuan Yingfu data as of June 29, China's UP-grade and UPS-grade electronic HF prices stand at ¥7,885/ton and ¥8,750/ton — up 19% and 17% year-to-date, respectively.
Cost side: Middle East geopolitical tensions have pushed up sulfur, sulfuric acid, and anhydrous HF prices. Demand side: AI compute expansion + semiconductor manufacturing upgrades are lifting consumption together.
In plain terms = raw materials cost more, and more buyers are competing for them — squeezed from both ends, prices rise.
Why is South Korea especially exposed?
According to Korean outlet TheElec, roughly 90% of the anhydrous HF used by South Korean semiconductor-materials firms is imported from China.
Korean companies have recently been forced to make large-scale purchases from China at elevated prices. This reflects a shift from a "price signal" to actual "procurement scramble" in high-end electronic-grade supply.
How large could the future demand gap be?
Huatai Securities, drawing on SEMI data, estimates that by 2028 mainland China's 12-inch wafer capacity could exceed 3.5 million wafers per month.
At 2.5–3 kg of electronic-grade HF per wafer, total demand would reach 100,000–120,000 tons/year. G5-grade demand alone would hit 50,000–60,000 tons/year — a 30–50% increase over 2025.
As of end-2025, China's effective G5 capacity is roughly 70,000–100,000 tons/year. This means → if demand ramps on schedule, G5 capacity will be just sufficient or tight — giving the price rally fundamental support.
Which listed companies are directly exposed?
Dongyue Group (00189.HK): Building a G5-grade production line benchmarked against Japanese and Korean imports. Its electronic fluoride product has passed SMIC's 14 nm logic-chip wafer-cleaning line test.
Do-Fluoride (002407.SZ): Current semiconductor-grade HF capacity of 40,000 tons. G5-grade product is in stable mass supply to TSMC, Samsung, Hua Hong, and CXMT. The company says market prices have risen roughly 20–30%.
Binhua (601678.SH): 2025 electronic-grade HF output of 6,405 tons, generating ¥63.4 million in revenue — just 0.43% of total sales. Small scale limits upside leverage.
How long can the rally last?
Two variables are decisive: ① whether Middle East tensions continue to push up upstream raw-material costs; ② whether AI-driven wafer-fab capex in 2026–2027 converts into actual consumption on schedule.
This means → the rally is not a short-term speculation story. Tracking fab expansion timelines is the key to gauging how long this upcycle runs.
In plain terms = the starting gun has fired, but how far the race goes depends on whether factory construction and ramp-up keep pace.
Content is for reference only, not financial advice.