Special Research on Domestic Substitution of High-End Semiconductor Packaging Materials: Can Xulun Technology Break the Monopoly of Japanese Manufacturers?

Based on the latest research data, I have conducted an in-depth analysis of Xulun Technology and the domestic substitution of high-end semiconductor packaging materials. Below is a systematic investment research report:

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Semiconductor packaging materials, especially in the high-end functional adhesive films/tape segment, have long been monopolized by Japanese companies. According to industry data:

Material Category	Market Share of Japanese Manufacturers	Key Players	Localization Rate
ABF Film (Ajinomoto Build-up Film)	~97%	Ajinomoto (Japan)	<3%
High-End Polishing Film	Dominated by Japanese manufacturers	Mitsui Chemicals, Hakuto Denko, Furukawa Electric, etc.	Extremely low
Wafer Dicing Tape	Dominated by Japanese manufacturers	Lintec, Zaiyou Chemical, etc.	Relatively low
Underfill	>60%	Namics (Japan), Panasonic Electric Works, etc.	<10%

ABF (Ajinomoto Build-up Film) is a core material for advanced semiconductor packaging, invented by Japan’s Ajinomoto and almost globally monopolized by the company:

• Market Position
  : ABF film accounts for over 95% of the global market share, and high-end processors of giants like Intel, AMD, and NVIDIA all rely on this material [1]
• Technical Barriers
  : Ajinomoto has over 20 years of technical accumulation and process know-how, which other manufacturers find difficult to replicate in the short term
• Capacity Bottleneck
  : Although Ajinomoto has announced production expansion, its CAGR of output will only be 14% by 2025, which is insufficient to meet the surging demand driven by AI chips [2]

Material Category	Global Market Size	Key Players	Progress of Domestic Substitution
Epoxy Molding Compound (EMC)	US$2.319 billion (Advanced Packaging)	Sumitomo Bakelite (Japan), Nepes (South Korea)	Mid-end: ~15%, High-end: <5%
Electroplating Solution	US$478 million	Rosearch (US), Ishihara Sangyo Kaisha (Japan)	Partial breakthrough, localization rate ~20%
Underfill	US$465 million	Namics (Japan), Henkel (Germany)	<10%
PI Dielectric Material	US$420 million	Toray (Japan), Hitachi Chemical, etc.	Initial breakthrough

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Beijing Xulun Technology Co., Ltd. was founded in May 2022, and its predecessor team entered the semiconductor materials field in 2016. The company recently completed over RMB 100 million in Series A3 and A4 strategic financing:

Financing Round	Amount	Investors	Use of Funds
Series A3	Over RMB 100 million	BEIHANG Holding Industrial Investment Fund, Qianhai Ark Fund	Production line and supporting system upgrade
Series A4	Over RMB 100 million	Nova Capital (affiliated to NAURA)	R&D innovation and talent development

:

• Nova Capital
  : An industrial fund under NAURA, representing the strategic layout of the leading semiconductor equipment enterprise for material localization
• BEIHANG Holding Industrial Investment Fund
  : A strategic shareholder of BOE and Yandong Microelectronics, capable of connecting the display and semiconductor industry ecosystems
• Industrial Synergy
  : The linkage between equipment and materials helps accelerate product verification and adoption

Xulun Technology’s technical route has significant differentiated characteristics:

Core Technology Platform
├── Resin Molecular Structure Design and Synthetic Preparation Process (Independent Original)
├── Polymer Adhesive Film/Tape Material Platform
│   ├── UV Release Tape (For Wafer Polishing)
│   ├── DAF (Die Attach Film)
│   ├── IBF (Insulating Build-up Film)
│   └── Functional Tape for New Energy Vehicles
└── Liquid/Film-Type Integrated Circuit Encapsulant

:

1. Underlying Innovation Capability
   : Starts from the design of the underlying resin molecular structure, rather than simple imitation
2. Matrix Product Layout
   : Uses a single company’s product system to benchmark multiple Japanese professional manufacturers in the semiconductor adhesive film segment
3. One-Stop Supply Capability
   : One of the few domestic enterprises capable of independently producing both DAF functional films and supporting carrier films

Dimension	Xulun Technology’s Position	Competitive Advantage
Comparison with Domestic Manufacturers	The only domestic manufacturer that has commercialized products across multiple key process scenarios in semiconductor packaging	Most comprehensive product coverage
Technical Level	Some products partially outperform Japanese manufacturers	High-end polishing films and wafer dicing tapes for memory chips perform better than Japanese counterparts
Customer Resources	Adopted by nearly 100 semiconductor enterprises including Hua Hong, ChangXin Memory Technologies, BOE, and TFME	Covers leading customers
Production Capacity Scale	Capacity corresponding to approximately RMB 500 million in sales	Economies of scale initially emerging

Xulun Technology’s products have passed strict certifications from multiple domestic leading customers and have been mass-produced:

:

• Wafer Manufacturing
  : Hua Hong, ChangXin Memory Technologies, China Electronics Technology Group (CETC), CR Micro, Yandong Micro
• Packaging and Testing
  : TFME (Tongfu Microelectronics), GalaxyCore, Maxscend Microelectronics
• Display Panels
  : BOE (introduced via BEIHANG Holding industrial ecosystem)
• New Energy
  : BYD (functional tape for new energy vehicles)

:

1. Products have completed verification and adoption by multiple leading customers
2. Entered a stage of stable volume ramp-up
3. Production capacity can reach a scale corresponding to approximately RMB 500 million in sales

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Growth Driver	Impact Analysis
Surge in AI Chip Demand	Surge in demand for advanced packaging such as HBM and GPU drives demand for high-end materials
Accelerated Penetration of Advanced Packaging	The global advanced packaging market is expected to reach US$57.1 billion in 2025 and US$78.6 billion in 2028
Increased Localization Rate	The localization rate of semiconductor equipment in mainland China will exceed 35% in 2025, accelerating the localization of materials
Policy Support	The 3rd Phase of the National Integrated Circuit Industry Investment Fund focuses on supporting materials and equipment segments

Market	2024 Size	2025 Forecast	CAGR
Global Advanced Packaging Market	US$51.9 billion	US$57.1 billion	10.6%
China’s Advanced Packaging Market	RMB 69.8 billion	RMB 85.2 billion	18.7%
China’s Packaging Materials Market	Approximately RMB 49 billion	Sustained Growth	-
High-End Adhesive Film/Tape Market	US$1.19 billion	Rapid Growth	>10%

Current Status          Breakthrough Direction      Target Status
──────────────────────────────────────────────────────────────────
Mature Low-End Substitution → Accelerated Mid-End Substitution → Ongoing High-End Breakthrough
     ↓                          ↓                          ↓
Mature Process Materials     Advanced Packaging Materials     Core Materials such as ABF
Localization Rate >50%       Localization Rate ~20%          Localization Rate <5%

Highlight Type	Details	Investment Significance
Track Dividend	Domestic substitution of semiconductor materials + boom in advanced packaging	Dual beta overlap
Technical Barriers	Independent original resin molecular design + full process coverage	Differentiated competitive advantage
Customer Resources	Mass adoption by leading customers + capacity ramp-up	Earnings certainty
Industrial Synergy	Ecosystem synergy between NAURA and BEIHANG Holding	Accelerates verification and adoption
Management Team	Precision manufacturing experience in Japanese enterprises + practical experience at Samsung, etc.	Guarantee of execution capability

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Risk Type	Details	Impact Level
Technology Verification Risk	Long verification cycle for high-end materials	Medium-term Risk
Price Competition	Japanese enterprises may launch price wars to block domestic players	Potential Risk
Overcapacity	Accelerated industry expansion may lead to oversupply	Long-term Risk
Technology Iteration	Changes in advanced packaging technical routes	Technical Risk

Risk Type	Details	Response Measures
Small Scale	Capacity corresponding to RMB 500 million in sales, economies of scale yet to emerge	Continuous financing for capacity expansion
Profit Pressure	High R&D investment in semiconductor materials	Optimize product structure
Customer Concentration	High dependence on leading customers	Expand customer matrix
Technology Catch-Up	Overall still in a catch-up position	Differentiated breakthroughs

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1. Short-Term (2025-2026)
   : Accelerated domestic substitution of mature process materials, advanced packaging materials enter the verification and adoption phase
2. Mid-Term (2027-2030)
   : Accelerated breakthroughs in high-end materials, core materials such as ABF are expected to achieve localization
3. Long-Term (2030+)
   : Basic realization of independent and controllable semiconductor materials, participation in global competition

Time Horizon	Strategic Focus	Goal
Short-Term	Capacity expansion + customer deepening	Full utilization of RMB 500 million capacity
Mid-Term	Technology deepening + product upgrading	Breakthrough in high-end application scenarios
Long-Term	International layout	Serve the global semiconductor industry chain

:
As a leader in the domestic high-end semiconductor packaging materials segment, Xulun Technology has the following investment values:

✅

: The only domestic adhesive film manufacturer that has commercialized products across multiple key process scenarios
✅ : Some products have outperformed Japanese counterparts in performance
✅ : Mass adoption by leading customers, healthy customer structure
✅ : Ecosystem empowerment by NAURA and BEIHANG Holding
✅ : Dual-driven by capacity ramp-up and domestic substitution

: Technology verification falls short of expectations, intensified industry competition, fluctuations in downstream demand

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[1] In-Depth Report on Huazheng New Materials: Pioneer of Domestic Substitution of ABF Film

[2] Elecfans: The Invisible Core of ABF Film in Semiconductor Packaging and the Domestic Breakthrough Battle

[3] 36Kr: Domestic High-End Semiconductor Material Company Raises Over RMB 100 Million and Secures Mass Adoption by Leading Customers

[4] iyiou: Xulun Technology Receives Over RMB 100 Million in Industrial Capital

[5] TMTpost: Xulun Technology Secures Over RMB 100 Million in Strategic Financing

[6] Ciqichina: 2025 China Advanced Packaging Industry Chain Map and Investment Layout Analysis

[7] Elecfans: In-Depth Analysis of China’s Packaging Materials Industry Chain from “Choke Point” to Independent Innovation

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: This report is for reference only and does not constitute investment advice. Investment involves risks, and you should exercise caution when entering the market.