----Interview with Yifan Zhang
Vice General Manager
Shaanxi Injay Semiconductor Co., Ltd.
Shaanxi Injay Semiconductor Co., Ltd. was established in June 2020. The company is committed to the R&D and industrialization of Group III–V compound semiconductor materials, primarily indium phosphide (InP). It focuses on overcoming foreign technological constraints, promoting the localization and import substitution of high-end semiconductor materials, and becoming a globally leading supplier of compound semiconductor materials.
Asian Metal: Mr. Zhang, thank you for joining our interview. Could you briefly introduce your company’s operations and core business?
Mr. Zhang: Shaanxi Injay Semiconductor was founded in June 2020 and is recognized as a National High-Tech Enterprise. Located in Tongchuan, Shaanxi Province, the company operates a first-phase facility covering more than 5,000 square meters. We specialize in the R&D and production of Group III–V compound semiconductor materials, with a core focus on high-purity indium phosphide polycrystals, as well as the manufacturing of related key production equipment. Our products are widely applied in high-end sectors such as optoelectronic communications. In niche segments, we have successfully broken through foreign technological barriers, achieving import substitution and exporting our products overseas, where they have received industry recognition. Our indium phosphide polycrystalline optoelectronic semiconductor material project has been successfully industrialized, marking a breakthrough in foreign technological constraints and replacing imported raw materials. To date, we have established a production base with an annual capacity of 20 metric tons of indium phosphide polycrystals. In 2024, we completed an expansion project that increased capacity to 50 metric tons per year, further strengthening our competitive position in the global indium phosphide polycrystal market.
Asian Metal: As the primary raw material for indium phosphide, what proportion and role does indium play in your products? How was indium consumption in 2025?
Mr. Zhang: Indium is the core raw material for producing indium phosphide polycrystals, accounting for over 50% of the material composition of our core product. High-purity indium is critical to the entire industry chain, particularly for high-end applications such as optoelectronic communications and AI hardware, which impose stringent requirements on quality and supply stability. In 2025, demand for indium phosphide has grown rapidly, leading to a continuous increase in demand for high-purity indium. Our monthly indium consumption has risen by more than 20% compared with last year. In 2025, the market size of China’s indium phosphide substrate sector reached RMB 15 billion, with a compound annual growth rate (CAGR) of 12%–15%, exceeding the global average.
Asian Metal: Indium ingot prices have fluctuated significantly since early 2024. What do you believe are the main reasons, and how has your company responded?
Mr. Zhang: At the beginning of 2024, indium ingot prices surged rapidly from around RMB1,950/kg to nearly RMB3,000/kg, then gradually declined and stabilized at approximately RMB2,500/kg. In 2025, prices have continued to fluctuate sharply within the RMB2,500–3,000/kg range. In my view, the core reason for these fluctuations lies in short-term supply-demand imbalances. On the supply side, phased capacity expansions in certain global semiconductor segments coincided with production cuts at upstream smelters due to environmental inspections and maintenance, resulting in temporary tightness in indium supply. On the demand side, cyclical adjustments in downstream sectors such as consumer electronics and new energy further amplified price volatility. In response, we have adopted a strategy of “forward price locking, dynamic inventory management, and diversified collaboration,” based on our long-term assessment of the industry chain. Specifically, we have signed long-term framework agreements with key suppliers to ensure raw material stability, and we align procurement with production planning and market trends through advance purchasing and rational inventory management to balance cost pressures.
Asian Metal: What is your outlook for indium ingot prices over the next three months?
Mr. Zhang: Over the next three months, we expect indium prices to exhibit significant volatility followed by stabilization at a lower level. Current price fluctuations are heavily influenced by investment factors. While upstream supply remains relatively tight and downstream buyers are cautious, we anticipate that supply-demand conditions will gradually rebalance as upstream capacity recovers and downstream demand stabilizes. Given the absence of strong bullish or bearish fundamental drivers and more rational inventory behavior in the market, we expect limited downside. Ultimately, prices are projected to stabilize at around RMB3,500/kg, maintaining a reasonable and stable range that provides a more predictable environment for production planning and cost control across the industry chain.
Asian Metal: How will rising indium raw material prices affect the indium phosphide market? What is the current demand situation for indium phosphide semiconductors?
Mr. Zhang: Sustained increases in indium prices directly raise production costs for indium phosphide, squeezing margins for midstream material producers and potentially passing cost pressure downstream to sectors such as optoelectronic communications and AI hardware. In the short term, this may slightly affect procurement rhythms for some small and medium-sized enterprises. However, overall demand for indium phosphide semiconductors remains solid. Applications in 5G infrastructure, data center optical modules, and autonomous driving sensors represent rigid demand segments with unchanged long-term growth logic. Although short-term cost disturbances exist, high technological barriers and limited substitutability have prevented significant demand fluctuations, and overall demand continues to expand steadily. Compared with gallium arsenide (GaAs), indium phosphide demonstrates superior electrical and physical properties, giving it a leading position in semiconductor optical communication applications. Indium phosphide and GaAs are not in a simple substitution relationship; rather, they compete dynamically across different niche markets, jointly advancing compound semiconductor technologies.
Asian Metal: In which downstream sectors do you expect indium phosphide demand to grow over the next year?
Mr. Zhang: We anticipate continued rapid growth in demand driven by AI computing power expansion and optical module technology upgrades. Over the next three years, China’s indium phosphide industry is expected to maintain a compound annual growth rate of 40%–50%, sustaining high-speed growth momentum.
Asian Metal: What is your projected indium demand over the next year, and what procurement plans will you implement?
Mr. Zhang: Based on sustained growth in downstream customer orders, we expect our indium procurement volume to increase significantly over the next year—by more than 50% compared with previous levels. We have already made advance procurement plans and preparations to secure stable raw material supply and support core product manufacturing. Given the current high volatility in prices and the limited ability to pass raw material costs downstream, we will only make limited purchases when prices exceed RMB4,000/kg, strictly in accordance with production schedules. Future procurement pricing will be dynamically adjusted based on negotiations with downstream customers, and normal procurement volumes will resume once prices stabilize.
Asian Metal: Please share your development outlook for 2025.
Mr. Zhang: We will continue to deepen our presence in niche segments, further refine and strengthen our indium phosphide products, and intensify R&D investment to support rapid development across the industry chain.
