The war in the Middle East has affected the semiconductor equipment sector, with manufacturers receiving notifications from downstream clients that engineering plastics will rise in price by up to 20%.

It is reported that South Korea's Kumho Petrochemical and Japan's Mitsubishi Chemical have recently issued price increase notices. Depending on the product, the price increase range this time varies from a minimum of 5% to a maximum of 20%. For products with higher raw material prices, the increase range is relatively lower. The supply price range of plastics is very wide, ranging from 100 US dollars to 50,000 US dollars per kilogram.

Although most contracts were signed before the outbreak of the geopolitical conflict, there is currently a trend to share the impact of price increases with suppliers and customers, given the long-term cooperative relationships involved.

An industry insider stated, "Equipment companies are currently bearing the brunt of the rising plastic prices." He added, "We need to wait and see, because if this situation continues, profitability may decline. However, for companies with a low proportion of engineering plastics used in their equipment, the direct impact is expected to be limited."

Some key raw materials for engineering plastics are derived from crude oil refining. Taking epoxy molding compound (EMC) as an example, its core component is epoxy resin (EP resin). Crude oil, after refining and petrochemical processing, yields basic chemical raw materials such as benzene and propylene, which are the key sources for synthesizing epoxy resin.

In the semiconductor industry chain, engineering plastics used in equipment and related components account for 10% to 20% of production costs. Engineering plastics have heat resistance and impact resistance, and can reduce weight by 20% to 30% compared with traditional metal products. They are mainly used for precision machining in semiconductor processes.

For example, in chemical mechanical polishing (CMP) processes, engineering plastics can be used as abrasives. A CMP polishing pad consists of a support, a polishing pad, and a carrier (wafer holder). The polishing pad is made of polyurethane. This is because using metals can generate foreign matter such as particles, which can severely affect the yield.

Open Source Securities believes that escalating global geopolitical risks and the potential for supply chain disruptions in sectors reliant on foreign technology will likely lead to a market revaluation. The investment logic for semiconductor materials has formed a "dual-engine" model. In the short term, supply chain security anxieties are accelerating the willingness and urgency of downstream manufacturers to adopt domestic solutions, especially for critical bottlenecks. In the long term, capital investment has accelerated across the board, and a flurry of industry catalysts will open up growth opportunities for upstream semiconductor companies.

China Galaxy Securities emphasizes that, given the external environment, supply chain security and self-reliance remain long-term trends. Equipment and materials have the strongest logic under the top-level design for domestic substitution, and Chinese semiconductor equipment manufacturers are demonstrating strong momentum towards high-end processes and platform-based development. Dongfang Securities states that, overall, domestic companies have achieved breakthroughs in multiple areas of core semiconductor equipment components, and the domestic semiconductor equipment component supply chain system is expected to continue to improve.