Huawei’s Tao (τ) Law’s Comprehensive Impact on the Specialized Semiconductor Gas Industry

A material transformation driven by “time compression”

When Moore’s Law approaches the physical and economic limits, how can the performance of chips be further enhanced?

In May 2026, Huawei officially released the “Ta (τ) Law”, replacing the traditional “geometric shrinkage” with “time shrinkage”, and achieving continuous improvement in chip performance through original technologies such as “logical folding”. This fundamental shift in the technical route is profoundly reshaping the underlying logic of the semiconductor industry chain. Among them, electronic special gases, the second-largest consumable in wafer manufacturing, are undergoing a full-dimensional reshaping from the demand structure to the value logic.

一. Total Demand: A Leap from “Process Dependency” to “Step-driven” Approach

The core path of Tao’s Law – “logical folding” – transforms traditional flat chips into three-dimensional ones through 3D stacking. This means that each chip requires more etching, deposition, and cleaning processes. The consumption of special gases is directly proportional to the number of process steps: the more layers, the deeper the etching, and the greater the gas usage.
Taking fluorocarbon gases used for etching (such as C₂F₆, C₃F₈, C₄F₆, etc.) as an example, the high aspect ratio etching requirements brought about by 3D stacking will increase the consumption of special gases per wafer by 30% – 50% compared to traditional planar processes. Industry data shows that the market size of electronic special gases in the Chinese mainland will reach 27.9 billion yuan in 2024, and the industry growth rate will increase to over 11% in 2025. The “same process, higher density” effect brought by the Taotao Law is expected to further boost this growth rate.

二. Product Category Structure: Dual-driven by High Purity and High-endization

“Time compression” achieves the ultimate compression of signal transmission delay, translating into stringent requirements for material purity – impurity control needs to reach the ppt (parts per trillion) level. This means:

First, the value of etching gas has increased. In the logic folding process, deep-submicron etching requires more precise and stable etching gas. Suppliers with high-purity (above 6N) fluorocarbon gases will gain greater bargaining power and market share.

Second, the incorporation of cleaning gases benefits simultaneously. The 3D stacking process increases the steps of thin film deposition and epitaxy, resulting in a simultaneous increase in the demand for gases such as silane gas (SiH₄), high-purity chlorine gas, and hydrogen chloride.

Thirdly, upgrading of bulk gas support systems. With the expansion of the 3D packaging production line, there is a greater demand for the continuous and stable supply of high-purity gases such as nitrogen and argon, which are essential for electronics.

三. At-a-glance Overview: The Comprehensive Changes Before and After the Release of Tao’s Law

Summary in one sentence: From “process follow-up” to “empowering stacking” – a comprehensive revaluation of the value of TetraTech.

四. Current Situation of the Chinese Gas Market: From “Lagging Behind” to “Competing on Par”

The Taou law has significantly reduced the extreme reliance of advanced manufacturing processes on EUV lithography machines, greatly enhancing the value of mature processes (28nm – 7nm). This technical approach is highly compatible with the current capabilities of China’s electronic gas industry.

In terms of market size, China has become the second-largest electronic specialty gas market globally. The domestic market size will reach 27.9 billion yuan in 2024 and approximately 31 billion yuan in 2025, accounting for about 20% of the global share. With the continuous expansion of domestic wafer factories and the intensive construction of 3D packaging lines, it is expected that the market size will exceed 45 billion yuan by 2028.

In terms of process standards, the Chinese electronic gas industry has achieved a key breakthrough:

• 
  Purity level: The mainstream specialty gas products have been upgraded from the earlier 5N (99.999%) to the 6N (99.9999%) level. Some high-end etching gases have reached the 7N level. The impurity control capability has advanced from the ppm level (one part per million) to the ppb level (one part per billion). The leading domestic manufacturers have achieved ppt-level impurity control verification in the laboratory, but have not yet achieved large-scale mass production.
• 
  Product coverage: The range of domestic electronic special gases has expanded from over ten types to nearly a hundred types, covering major process steps such as etching, deposition, doping, and cleaning. Among them, key categories such as fluorocarbon etching gases, high-purity silane gas, and high-purity chlorine gas have achieved breakthroughs in domestic production.
• 
  Process adaptation: Domestic gas processing technology has achieved the capability of batch production support for processes ranging from 28nm to 14nm. A small number of products have completed the submission of 7nm sample for testing. However, it has not yet entered the formal process verification stage for 7nm/5nm.

In terms of the competitive landscape, in the past, the Chinese electronic special gas market was largely dominated by overseas gas giants (such as Linde, Air Liquide, and Sumitomo Dainippon) with a domestic production rate of less than 20%. In recent years, domestic gas enterprises have accelerated their progress in technology, production capacity, and customer verification. The overall domestic production rate of semiconductor-specific electronic special gases has increased to 24%-28%, and significant progress has been made in high-value-added categories such as etching gases and silane gas.

More importantly, the supply chain system of Tao’s law has been fully verified within Huawei – over the past six years, Huawei has mass-produced 381 types of chips based on this law. This indicates that

5. Reassessment of Value Logic: From “Cycle Stocks” to “Growth Stocks”

Traditionally, electronic gases were regarded as consumables whose demand was highly correlated with the utilization rate of wafer fabrication plants and exhibited a clear cyclical pattern. However, the structural changes brought about by the Tao Law are altering this logic:

Demand rigidity has intensified: Logical folding involves increasing the number of process steps in exchange for performance, turning specialty gases from “the shadow of production capacity” into “a lever for performance” – as long as the path to performance improvement relies on the increase of process steps, the demand for specialty gases will have an independent growth momentum that exceeds the production capacity cycle.

Technical barriers are raised: the requirement of ppt-level purity, the multi-category product matrix, and the long-term verification cycle of wafer factories (usually 12-24 months) jointly form the moat of high-end specialty gas suppliers.

Domestic substitution premium: Under the framework of self-reliance and controllability, special gas companies that enter the supply chains of leading enterprises such as Huawei and SMIC will enjoy a double boost in valuation and performance.

Conclusion

The essence of Taub’s law is to achieve performance improvement by “system reconfiguration” when physical dimensions approach their limits. This paradigm shift is positioning semiconductor specialty gases from “behind-the-scenes consumables” to “strategic materials” – with greater demand, higher value, and a more favorable landscape.

For special gas enterprises, the real test is no longer “whether they can produce high-purity products”, but whether they can, under the impetus of the Tao Law, jointly define the next-generation material standards with downstream customers within the new process system. This is both a challenge and an unprecedented historical opportunity.