On August 6, 2021, Hefei Jinghe Integrated Circuit Co., Ltd. (hereinafter referred to as "Jinghe Integrated") replied to the Shanghai Stock Exchange's inquiry on "fully disclosing the competitive disadvantages in light of the comparison of comparable companies in the same industry in terms of technology, product structure and future development trends of the industry, and explaining whether the issuer faces risks such as small business scale and small market share".
FDS disclosed its comparison with comparable companies in the field of semiconductor wafer foundry in terms of technology, product structure, market share, mass production time, profitability and cost performance of related process nodes.
First, in terms of wafer foundry size, wafer integration provides an illustration of how it compares with comparable companies in the semiconductor foundry field during the reporting period in terms of wafer foundry size. It also said that the company provides 12-inch wafer foundry services and does not provide 8-inch wafer foundry services. Compared with 8-inch, 12-inch wafer manufacturing technology is more advanced: Compared with 8-inch wafer foundry services, 12-inch wafers can more than twice the usable area of 8-inch wafers, and the integrated circuit manufacturing efficiency is higher, and industry leaders usually have 12-inch wafer foundry capabilities.
Secondly, in terms of technology, GCC said that during the reporting period, the company mainly provided 12-inch wafer foundry services for 150nm to 90nm process nodes.
In terms of product structure, the application field of the process platform that forms the main business income during the reporting period is mainly DDIC.
Then, in terms of market share, Jinghe Integrated revealed that according to Frost & Sullivan's statistics, in 2020, the global wafer foundry market size reached 67.7 billion US dollars, of which the top four companies in terms of market share were: TSMC (61.9%), UMC (9.3%), Grofound (8.7% market share) and SMIC (5.4%). In 2020, the company's wafer foundry business revenue reached 1,511,861,100 yuan, with a low market share.
In terms of the mass production time of the relevant process nodes, the data shows that during the reporting period, Jinghe Integration has realized the mass production of 150nm, 110nm, 90nm process node related process platforms, and in the process nodes, there is a gap with TSMC, UMC, SMIC, Huahong Group and other industry-leading enterprises, but it is more advanced than the world's advanced, China Resources Micro and other enterprises.
In terms of profitability, Jinghe Integrated said that during the reporting period, with the improvement of production capacity and the expansion of production scale, the scale effect appeared, and the company's comprehensive gross profit margin increased year by year, -276.55%, -100.55% and -8.57%, respectively, but it was still lower than TSMC, UMC, SMIC and other industry leaders.
Finally, in terms of cost performance, it is reported that Wafer Integration provided 12-inch wafer foundry services during the reporting period, and compared with 8-inch wafer foundry services, the usable area of 12 inches relative to 8-inch wafers is more than twice, and the manufacturing efficiency of integrated circuits is higher and more cost-effective. In addition, during the reporting period, on the basis of ensuring performance, GCC used aluminum processes in the process process of DDIC and other process platforms, and since the cost of aluminum process materials was lower than that of copper processes, the use of aluminum processes was more cost-effective in terms of cost.
Jinghe Integration revealed that during the reporting period, the company was in a period of rapid expansion of production capacity, with negative gross profit margin and low market share, while the gross profit margin and market share of leading enterprises in the industry such as TSMC, UMC, and SMIC were higher than those of the company, and there was a gap between the company's gross profit margin and market share.
In addition, for the question of "whether it faces risks such as small business scale and small market share", Jinghe Integration said that during the reporting period, the company's main business income was 217.6595 million yuan, 533.3601 million yuan and 1511.8611 million yuan, respectively, and the business scale and market share were lower than those of leading enterprises in the industry such as TSMC, UMC and SMIC, and there was a risk of small business scale and small market share. Jinghe Integration also added that if the company cannot continue to enrich the product structure, expand customers, improve business scale and market share in the future, it may be adversely affected by fierce market competition or huge fluctuations in the industry.
(Proofreading/Andy)