(Yicai Global) Dec. 20 -- China's Sinyang Semiconductor Materials will work with German chemical and precious metals giant Heraeus to accelerate the development of a key component used in producing advanced integrated circuit chips.

The Chinese semiconductor material supplier penned a three-year cooperation agreement with Heraeus to optimize innovative photoresist solutions, including product development and testing, the Shanghai-based firm said in a statement on Dec. 17. The specific terms will be determined via another agreement.

The Chinese firm hasn't been producing such light-sensitive polymer resins for long. In June, Sinyang said it has secured its first photoresist order. The products will be used in manufacturing 350-nanometer to 14nm semiconductors.

The new agreement should enhance the company's competence. Sinyang can obtain some raw material supply and technical assurance through the partnership with the Hanau-based company, it said.

The world's second-largest economy has been striving to become more self-sufficient in chip manufacturing. Currently, China produces less than 5 percent of all photoresists used in KrF lithography which are needed in making eight-inch silicon wafers, according to public data.

The announcement had a limited impact on Sinyang's stock price. The equity price [SHE: 300236] closed flat at CNY41.15 (USD6.50).

Editor: Emmi Laine, Xiao Yi