The financial reports of the domestic semiconductor industry are coming out one after another. Under the tight supply chain and the continuous fluctuation of the external macro-environment, the performance of relevant enterprises is obviously improving. According to the data of published financial reports or performance letters, among the 86 listed semiconductor companies, the growth rate of net profit of more than 40% of the companies doubled.
Industry analysts said that the national support policies for the semiconductor industry have been vigorously promoted. As the underlying technology of the science and technology industry, the importance and strategy of semiconductors are self-evident. At present, although the tension in the supply chain has been alleviated, it is expected that this situation will continue this year. Therefore, the whole semiconductor ecosystem, especially in China, is actively cultivating a multi-supplier system, which brings a development window period for domestic manufacturers to further break through the medium and high-end market.
On April 29, 107 companies in the semiconductor and semiconductor production equipment industry released their first quarterly reports, of which 68 companies achieved a year-on-year increase in net profit, accounting for more than 60%; The net profit of 48 companies increased by more than 50% year-on-year, accounting for more than 40%. Overall, semiconductor companies performed well last year. However, since this year, with the periodic decline of the semiconductor market, “whether the prosperity of the industry can be maintained” has become a topic of concern in the market. As the leader of the domestic memory chip industry, Zhaoyi innovation’s net profit in the first quarter was 686 million yuan, a year-on-year increase of 127.65%. The company said that the market demand for memory, MCU and other products is strong and continues to maintain structural shortage.
National technology, the leader of information security chips, achieved a revenue of 340 million yuan in the first quarter of this year, a year-on-year increase of 249.35%; The net profit was 24.6177 million yuan, a year-on-year increase of 251.39%, turning losses into profits.
Zhongying electronics, which is mainly engaged in MCU integrated circuit design, realized a net profit of 128 million yuan in the first quarter of this year, with a year-on-year increase of 89.97%. The company said that at present, the orders are full. Due to the year-on-year increase of production capacity and supply, the sales revenue has increased well year-on-year, driving the growth of the company’s profit.
Fudan micro electronics and Powerchip, two chip design companies just listed in 2021, also had a year-on-year increase in net profit of more than 100%, and their performance exceeded expectations. Among them, Fudan micro power achieved a net profit of 233 million yuan in the first quarter, a year-on-year increase of 169.62%; The net profit of powercore micro in the first quarter was 65.5709 million yuan, a year-on-year increase of 171.99%. In this regard, the companies said that the good benefits during the reporting period were mainly due to the strong demand for downstream applications.
In addition, the performance of Leon micro (52.050, 1.00, 1.96%) and Northern Huachuang (239.000, 1.28, 0.54%) in the upper reaches of the semiconductor industry chain are equally outstanding. Among them, Leon micro achieved a revenue of 756 million yuan in the first quarter, a year-on-year increase of 63.86%; The net profit attributable to the parent company was 238 million yuan, a year-on-year increase of 214.02%. Northern Huachuang achieved a net profit of 206 million yuan in the first quarter, a year-on-year increase of 183.18%. From the downstream of the semiconductor industry, the current demand is divided. On the one hand, consumer electronics demand is weak. On the other hand, the problem of “lack of core” is still serious.
“At present, affected by the epidemic and other factors, the electronic commodity market with strong consumption attributes has shown a significant decline in confidence, including smart phones, TWS, display panels and other sectors. This also makes the price rise momentum of its upstream related semiconductor products such as PMIC and display driven IC weaken or even decline. Releasing inventory and adjusting production capacity are the appropriate strategies at present.” He Xiaoxiang, an analyst in the electronics industry of Chuancai securities, told the Securities Daily.
In contrast, “core shortage” has become the focus of the whole automobile industry. “At present, automotive electronics has become an important growth factor in the downstream of semiconductors. In particular, the sales volume of new energy vehicles continues to be strong, driving the demand for simulation, power and MCU. The ‘lack of core’ of vehicles will continue in the short term. According to the data, the sales volume of automotive MCU is expected to grow at a CAGR of 7.7% in 2022.” Zhou Jia, a researcher of Yihu investment electronics, told reporters.
In addition, the development of photovoltaic, wind power, energy storage and other new energy industries also brings new demand to the semiconductor industry. Guojin securities (8.250, 0.32, 4.04%) said that under the opportunity of new energy, power semiconductor (IGBT, silicon carbide), thin film capacitor, isolation chip, connector and other subdivided industries will focus on benefiting.
It is worth noting that, according to wind data, the semiconductor industry index has declined by 32.2% since this year. How the market scene looks in 2022 has become an important issue of concern to many investors. In this regard, insiders told reporters that on the whole, the prosperity of the semiconductor industry has not decreased this year. At present, the cycle of domestic semiconductor industry is mainly composed of inventory cycle, innovation cycle and domestic substitution cycle. The short-term inventory cycle dominated by supply is generally about 2 years; In the medium term, it is driven by the underlying innovation of 5g, smart tram and smart phone, which is generally 3 to 5 years; Driven by domestic substitution for a long time, it is expected to last for about 10 years.
China Merchants electronics research said that with the subsequent gradual improvement of wafer manufacturing capacity at home and abroad, the relationship between supply and demand is expected to be gradually alleviated. In this context, it is suggested to pay attention to the downstream areas with strong share promotion logic and category expansion, such as automobiles, photovoltaics and servers, under the background of domestic substitution.
According to the data, among the 86 listed semiconductor companies, the growth rate of net profit attributable to shareholders of the parent company of 38 companies is close to (more than 90%) or more than 100%, and the growth rate of four listed companies is more than 1000%. Of course, the net profit base of some companies is slightly low, which leads to the performance of growth rate to a certain extent.
However, globally, high net profit growth is a universal trend. Industry insiders pointed out that the semiconductor industry is generally subdivided into four fields: integrated circuits, optoelectronic devices, discrete devices and sensors. It has always been pouring resources into integrated circuits, but now the trend is to “blossom in an all-round way”. In particular, policies and capital promote the semiconductor industry chain to make up for weaknesses, so that the whole industry develops at a high speed. The outbreak of downstream demand makes the performance of semiconductor companies generally optimistic.
Specifically, enterprises with large net profit base and high growth rate include Silan micro, SMIC international, China Resources micro, GigaDevice, JCET Group, Ingenic, Maxscend, etc. According to the annual report, SMIC, an IC foundry enterprise, achieved revenue of 35.633.1 billion yuan, a year-on-year increase of 29.7%. The micro revenue of IDM (vertically integrated manufacturing plant) enterprise Shilan reached 7.194 billion yuan, a year-on-year increase of 68.07%, and the net profit increased by 21 times. The net profit of chip sealing and testing enterprise JCET Group was 3.08 billion, a year-on-year increase of 136.2%.
For the prospect of 2022, Wingtech said that the company’s product integration business will usher in a harvest stage in the field of new products and new customers. As of the time point of this report, several key products invested in R & D in 2021 have received a number of new orders from key customers. With the promotion of the relevant R & D expansion process, new products and new customers will be mass-produced in 2022, and will enter the harvest stage from category to quantity, becoming a new engine for the growth of the company. At present, the first products of specific customers have been mass-produced and supplied in the first quarter of 2022, and the subsequent new types of products will also enter the mass production stage one after another; The cloud server business has won several hundred million yuan projects for high-quality customers, and the 48V cloud server system products with collaborative power semiconductor technology innovation are expected to start shipping within this year; The laptop business continues to develop and is expected to achieve a multiple growth in shipments in 2022; In terms of innovative products based on wafer-level packaged SIP modules, TWS SIP solution products won the million-unit project and are expected to further expand the scale; PA FEM SIP scheme in RF field has been introduced into customers of world-class mobile phone brands; The onboard intelligent terminal products have also achieved customer breakthrough and will be shipped successively from the third quarter of 2022; Develop new mini / micro led products and expand new customers. New products and new customers will fully enter the harvest stage. The company will also strengthen fine management, improve business efficiency and strive to enter a new stage of growth as soon as possible.
In addition, Wingtech also said that in the future, it will further explore semiconductor and optical collaborative technological innovation and further implement the product strategy. The company will make full use of the technological collaborative innovation ability of semiconductor, optical business and product integration business to further promote the commercialization of solutions and the commercialization of accessories represented by SIP, mini / microled and advanced optical modules.
In terms of optical module business, the net loss in 2021 was 335 million yuan (of which the net loss attributable to shareholders of listed companies was 234 million yuan). In the first quarter of 2022, the net loss was 39 million yuan (including 27 million yuan attributable to shareholders of listed companies). From the situation in the first quarter, the net loss of Wingtech’s optical module business is narrowing.
Wingtech said that since the acquisition and delivery of assets in May 2021, the company has actively promoted the R & D and certification of optical module business. The company has started the supply of dual-camera products in November 2021 to reduce operating losses. The company will make full use of its management advantages, R & D advantages, scale advantages and customer resource advantages in the field of product integration business and semiconductor business to comprehensively promote the effective integration of optical module business and upstream and downstream of the industrial chain.
Wingtech stressed that the company’s optical module business is scarce in the field of camera module business. Its advanced sealing and testing technology capability, the development capability of some sealing and testing equipment and the ability to supply large customers of world-class mobile phone brands will promote the company to deeply cut into the optical competition and open up the core links of the upstream industrial chain. Promote the company to optimize customer structure and further improve profitability and comprehensive competitiveness.
It is worth mentioning that in 2021, Wingtech significantly increased its R & D investment to 3.7 billion yuan, a year-on-year increase of 32.14%. Among them, the R & D investment of product integration business in 2021 was about 2.782 billion yuan.