Featured Experts
Yu Xiaona
General Manager of Jinhong Puhua and Chairman of Jingneng Puhua. Deeply engaged in the helium sector since 2014, she has achieved the largest import scale from Russia among domestic private enterprises, built a full-chain system from source locking to terminal distribution, and continuously promoted the security of the domestic helium supply chain and the high-quality development of the industry.
Kang Lizhong
Deputy General Manager of Jinhong Gas and concurrently General Manager of the Electronic Bulk and Specialty Gas Business Center. A senior operator in the domestic electronic gas and rare gas industry, he leads the supply chain integration and market development of core categories such as electronic gases (electronic bulk carrier gases, electronic specialty gases/precursors/chemicals, and related engineering) and rare gases, promoting the domestic substitution process of Jinhong Gas in the semiconductor field.
Company Profile
Jinhong Gas Co., Ltd. (hereinafter referred to as "Jinhong Gas", stock code: 688106.SH) is a national-level "Little Giant" and specialized & innovative comprehensive gas service provider focusing on the entire high-end gas industry chain, and a core carrier for ensuring the supply of national strategic scarce resources. With nearly 30 years of deep cultivation in the supply of specialty gases and bulk gases, it has built an integrated full-chain closed-loop system of "R&D innovation - green intelligent manufacturing - global storage and transportation - customized operation and maintenance". Empowering high-end manufacturing with core technologies, it builds a solid security foundation for the industrial and supply chains of high-end manufacturing in national strategic emerging industries such as IC (Integrated Circuit), aerospace, biomedicine, new energy and new materials.
Editor's Note
Helium is an irreplaceable key rare gas in semiconductors, aerospace, and high-end medical care. In the past, domestic supply highly relied on imports, making the supply chain highly vulnerable to geopolitical disruptions. In this episode of "Chip Unveiled", we talk with Kang Lizhong, Deputy General Manager of Jinhong Gas, and Yu Xiaona, General Manager of Jinhong Puhua/Chairman of Jingneng Puhua, to review the process of the strong alliance between the two enterprises, forecast the demand growth and cyclical supply-demand pattern of the helium market in the next 3-5 years, and interpret the opportunities and challenges behind the domestic supply guarantee of specialty gases.
Welcome to the dialogue podcast. *The following is the text transcript of the podcast, confirmed and authorized by the guests.
Strong Alliance: The Starting Point to Break the "Choke Point"
Huanshi: The backgrounds of today's two guests are very interesting. One is a leading female entrepreneur in the private helium energy sector. She entered this track in 2014 and has now made the import scale of Russian helium the first in China. The other is the core operator of a leading domestic specialty gas company. Together, they have accomplished something that many in the industry have wanted to do but failed to achieve, which is also the focus of our discussion today: how to make up for the "choke point" in the industrial chain of electronic specialty gases and achieve independent and controllable domestic key assets.
Let Huanshi keep a suspense first. Let us welcome Yu Xiaona, General Manager of Jinhong Puhua and Chairman of Jingneng Puhua, and Kang Lizhong, Deputy General Manager of Jinhong Gas. Please greet the listeners of "Chip Unveiled". Mr. Kang, please go first.
Kang Lizhong: I am Kang Lizhong. Hello to all the listeners and viewers of "Chip Unveiled".
Yu Xiaona: Hello to all the listeners of "Chip Unveiled". I am Yu Xiaona.
Huanshi: Hello to both of you. Actually, I am particularly curious about one thing—your two companies, one focusing on helium and the other deeply engaged in comprehensive specialty gases, have both performed exceptionally well in your respective fields. What brought you together and led to the decision to form a joint venture? Is it driven by strategic considerations or some special attraction? And why at this specific time? I have quite a lot of curiosities. How about one of you sharing the story behind this with us first?
Kang Lizhong: Let me start. First of all, Jinhong Gas itself is positioned as a comprehensive gas company, and helium is a very important part of all the industrial gases we operate. On the one hand, the physical characteristics of helium are very special; on the other hand, its supply chain is relatively fragile and the sources are single. In addition, helium is also very special at the application end. Many of our products need to be packaged to provide services to customers, and helium is an indispensable part of it, especially in the pan-semiconductor fields such as IC (Integrated Circuit) and LCD panels, where helium plays a very important role.
Therefore, as a comprehensive gas company, we must make up for the helium part. Moreover, just making it up is only the most basic requirement; we also need to make it strong enough. Only in this way can we make our overall packaged services more value-added and provide customers with a more guaranteed gas supply.
Huanshi: Mr. Kang just answered why Jinhong wants to do this. As for why the two companies came together for cooperation, let's ask Ms. Yu to reveal the secret!
Yu Xiaona: Well, it's actually like this. This decision was not made suddenly, but has years of historical precipitation. As early as 2019, I went to Russia to discuss cooperation and slowly accumulated a lot of resources. Then in 2022, I was fortunate to meet Jinhong Gas. Against that background, you could say I came with a lot of "dowry", introducing myself with great sincerity. Our destiny was formed from that time.
Up to now, we have been cooperating for more than 3 years. During this period, Mr. Jin and Mr. Kang from Jinhong Gas have given quite a lot of support to our work here. For a female entrepreneur like me, going to Russia alone to secure such a large volume of resources indeed requires strong support behind the scenes. Of course, this achievement is definitely not mine alone, but of our entire team, especially the strong support given to me by Jinhong Gas.
Huanshi: That is to say, the two companies actually started cooperating a long time ago, but it was relatively "under the radar" at that time, not perceived by the public. Now that such good results have been achieved, it is just the right time to announce it to the outside world. Mr. Kang, do you have anything to add?
Kang Lizhong: I might need to add a point. I just talked about the importance of helium in our comprehensive gas company, so let's go further back to the source. Actually, Jinhong was involved in the helium product line at the very beginning. But at that time, the self-sufficiency rate of helium in China was only 1%~2%, and 99% basically relied on imports from abroad, mainly from the United States, Qatar, as well as Algeria, Australia, and South Africa. Moreover, the helium entering China was basically imported through foreign-funded companies. At that time, we cooperated with Taiyo Nippon Sanso—they had the supply but lacked the repackaging and distribution channels. We built a distribution station at our headquarters in Suzhou. They provided the supply, and we each took half of the volume, responsible for our own customers.
But later, they set up their own repackaging devices, and our cooperation ended. From that moment on, we had to build the entire helium supply chain ourselves, and at the same time, we were looking for very good partners. At that time, we already had a repackaging center and containers, but the only thing missing was a supply source.
Previously, the share of Gazprom was basically divided among foreign-funded companies, but due to some geopolitical factors, this gap was opened. And Ms. Yu happened to have very good contact and cooperation with Gazprom at that exact time point. So we acted as a whole and slowly got this thing done.
Huanshi: It feels like a two-way journey.
Kang Lizhong: Exactly. There is another very important reason for us to cooperate with Ms. Yu's team, which is that they are very passionate, and every employee possesses an entrepreneurial spirit. Therefore, Jinhong Gas also hopes to make a pilot through this cooperation: we take out a business unit, or rather a product sector, to work together with external partners. In this way, it can not only stimulate everyone's enthusiasm and upward drive, but also bring more differentiated working methods, thinking modes, and attitudes towards running the enterprise to the group. This will provide a lot of beneficial help to the group. So, this is a very important pilot.
Huanshi: Actually, this is also a very strong signal of cooperation you are releasing to the outside world—helium can be played this way, and maybe other products are also possible, right?
Kang Lizhong: Yes, this is a very important signal. It's not just a possibility; we must play it this way. Only this kind of cooperation can make the enterprise more dynamic.
Negotiating Helium Alone: From Source Direct Supply to Terminal Delivery
Huanshi: Okay, let's turn the topic back to Ms. Yu. You just mentioned that you negotiated the helium deal alone in Russia back then. Can you recall with us, was the negotiation process difficult at that time? Or rather, what was particularly difficult behind securing such an order? Some people might think, could they have had such an opportunity if they went instead? So, how high is the threshold for this opportunity exactly?
Yu Xiaona: This question can actually be answered from many dimensions. I believe it is difficult to replicate anyone's path to success. At that time, I had a prerequisite, which was that I directly established a communication channel with them, and it was a direct one, without any intermediaries. I ran it all down myself. Whether it was dialogue or market information, it was mutually accessible. They saw my sincerity and gradually built trust.
At that time, it was 2019. Gazprom actually didn't know much about the strategies, sales policies, and even sector division of the entire helium market. For them, this was a brand-new small product sector. After I went, surely many Chinese buyers went one after another later. The leaders of Gazprom even said to me, "Are you Chinese so short of helium? I receive your procurement emails every day." Of course, many of them were double or multiple counted.
So, with the superposition of multiple factors, I was the first to sign an agreement with them, and some of the agreement texts were even repeatedly polished by us. Later, some Chinese companies also continued to deepen cooperation based on the stepping stone we laid. I think this is also a relatively good exploration for the Chinese market.
Huanshi: You blazed a trail for everyone.
Yu Xiaona: Yes, a hard-fought trail.
Huanshi: After years of cultivation by you, it has finally come to the time of bearing fruit. I want to ask Mr. Kang, now that the helium resources are in place, what kind of strategy do you plan to adopt in domestic market development?
Kang Lizhong: It's like this. The product helium has many unique characteristics. First of all, it has four irreplaceable properties: first, ultra-low temperature (especially in the liquid state); second, its heat dissipation is very good; third, it is a very inert molecule; fourth, it is also a very small molecule. These four basic characteristics determine that it is almost irreplaceable in certain process links.
Currently, helium plays a very important role in several core fields. The first is the IC (Integrated Circuit) and pan-semiconductor industry; the second is aerospace launches; the third is high-end medical care, especially MRI (Magnetic Resonance Imaging); the fourth is the field of high-energy physics and some frontier scientific research, such as scenarios that require creating ultra-low temperature or superconducting environments; and there is also the fiber optic communication industry. Other applications are relatively scattered, but these are enough to illustrate the importance of helium.
Currently, our helium market expansion mainly focuses on semiconductors, aerospace, high-end medical care, and scientific research projects related to high-energy physics, while doing a good job in the management of full logistics and the full product chain. From supply sources, logistics, and packaging containers, to repackaging, on-site customer service, technical testing, and after-sales support, we need to make every link in the industrial chain very perfect, so as to give customers the best experience.
Huanshi: What you mentioned is actually a very important topic—the problem to be solved by "the last mile" delivery. So at present, in the process of domestic helium sales, is the competition pressure high? Are there many challenges faced?
Kang Lizhong: There are definitely challenges. Our response strategy is: serve the terminal customers well, and at the same time maintain good communication and collaboration with channel distributors. Because sometimes we need to help them, and sometimes they will help us in return.
After all, we are all peers in the same industry, and we will do our best to maintain the healthy and benign growth of the market. Of course, a certain degree of competition is necessary. Without competition, the service quality cannot be improved. Therefore, we hope that this industry can maintain a good growth momentum under the state of benign competition, so that terminal customers can also get satisfactory services.
Supply and Demand Mismatch: Cyclical Forecast of the Helium Market
Huanshi: Please share your views respectively. Where do you think the future helium market will go in the next three to five years? You can answer from the perspectives of supply chain, customers, demand, or market capacity. Each of you can combine your own experience to talk about the forecast for the next three to five years.
Kang Lizhong: Let me talk from a market perspective. China is now the market with the fastest growth in helium usage and a relatively large capacity in the world. This is especially reflected in three industries:
The first is IC (Integrated Circuit). Because in modern China, especially in the recent three to five years, China's IC development has been very fast. Whether it is mature process nodes or advanced process nodes, whether it is the production of factories under construction or the expansion of existing factories, the growth rate is relatively fast. Since helium is an indispensable product in IC, in the future, let alone three to five years, even five to ten years will continue to grow at a considerable speed. Moreover, as process nodes move towards more advanced directions, the usage ratio of helium will also become higher and higher, especially in the storage field, such as 3D NAND, etc. Therefore, in the IC industry, the future helium market should be very good.
The second is aerospace, especially rocket launches. Previously, it was more about state-led institutional launches, but now commercial aerospace is becoming more and more vigorous. In liquid rocket launches, helium is used as an important tool to push the fuel out, so the usage of helium in commercial aerospace will also become larger and larger.
The third is high-end medical care, especially MRI, which has been growing all the time before. China is a major manufacturing country. In the past, equipment like MRI mainly relied on imports. Later, Chinese manufacturers (such as United Imaging) developed, and the proportion of foreign-funded equipment became lower and lower. At the same time, as the national demand for medical conditions is getting higher and higher, in the past, only tertiary Grade A hospitals might have MRI, but now county-level hospitals and even community hospitals are gradually equipped with it. This is not only an increment on the production and manufacturing end, but also helium will be used for daily maintenance and helium replenishment at the hospital end.
Combining these three aspects, I think the Chinese helium market will maintain steady growth in the future, with a compound growth rate of about 5% to 7%. Overall, helium will still have a very good market in China in the future.
Huanshi: Mr. Kang's words make me extremely excited! How does Ms. Yu view the development trend of helium in the next three to five years?
Yu Xiaona: This is how I see it. Recently I am reading a book called "Kondratiev Wave Cycle". This cycle theory is divided into five stages. Applied to the product helium, I think the next three to five years will be a process from "severe shortage" to "slow superimposed recovery".
I think within the next three to five years, we will experience the most severe shortage in history. First of all, we need to deeply recognize our own situation. Mr. Kang just introduced the current situation of the entire Chinese industrial chain. I think the industry prospects are very optimistic. But as for the supply system of this single product, helium, my own forecast is: some backward production capacities will be eliminated.
Gradually, helium will concentrate towards high-precision and advanced fields, as well as very prosperous industrial areas in the industrial chain. Superimposed with its compound growth rate, I think it is difficult to recover to the previous "abundant" state within two years. Later, new products will be superimposed, such as the helium extraction project put into production by Jinhong Gas itself, including domestic supply sources that may pop up quickly and sporadically. At the same time, overseas, it may also take three to five years to recover, and their own helium factories will also be put into operation one after another. After these layouts and points are established, the market pattern may be adjusted again.
So in the short term, the supply may be relatively tight. This is the law of the cycle itself. It is now at the bottoming stage, but it will warm up next.
Huanshi: Right, it is confirmed that many people are still extracting helium themselves using the natural gas method. So do you think that in the short term, within these two to three years, the helium market may still be difficult to recover to the previous state?
Yu Xiaona: Yes, it's difficult. Actually, several key anchor points globally are breaking out at the same time.
Huanshi: But opportunities often arise in such collisions, right? The more fragile the supply chain, the more it is actually a process of industry reshuffling.
Yu Xiaona: Exactly. So I went through these forecasts in my mind a few years in advance, and we have also rehearsed the most dangerous moments in our minds many times. Of course, as the enterprise grows bigger, the responsibility will also become heavier, which is undoubtedly true. We will certainly do our best to play our role well on this platform and try our best to guarantee services for everyone.
Huanshi: Anyway, I still want to congratulate Jinhong Gas for having such a fundamental basis today. This is great progress and also a great achievement. I think without you, the supply guarantee in many domestic industries might have problems now. From this perspective, I think what you are doing is still very pride-worthy. Okay, blessings to Jinhong Gas, and blessings to Ms. Yu and Mr. Kang for making your business map bigger and bigger.
Kang Lizhong: Thank you. We are also contributing to China's national economy.
END
Interview | Huanshi Editor | Xiaoqie Review | Huanshi