Two years of financing 6 rounds, but the net profit declined year by year.
Author | Fan Wenjing
Edit | Liu Jingfeng
Speaking of silicon carbide and gallium nitride, many people will be confused, but when it comes to fast charging, I believe most people are not strangers - now mobile phone charging has evolved to fast charging, and electric vehicle fast charging has also been widely used. Gallium nitride is one of the necessary materials for the manufacture of fast-charging components.
Semiconductor materials represented by silicon carbide and gallium nitride, also known as third-generation semiconductor materials, are more suitable for device production in high temperature, high voltage and high frequency scenarios. With the improvement of new energy demand and the development of semiconductor technology, the third generation of semiconductors is heading for an outbreak.
On January 12, 2022, Shandong Tianyue, known as the hidden champion of "silicon carbide", was listed on the Science and Technology Innovation Board. Its opening price was 77.98 yuan, lower than the issue price of 82.79 yuan; the closing price of the day was stable at 85.50 yuan, and the market value exceeded 35 billion yuan.
Founded in 2010, the third generation of semiconductor substrates (i.e., wafer wafers) companies, the main products include semi-insulated substrates and conductive substrates, the former is usually composed of SiC substrate + GaN epitaxial layer, more suitable for making RF devices, such as 5G communication RF devices; the latter is composed of SiC substrates and SiC epitaxial layers, more suitable for making power devices, such as new energy vehicles, photovoltaic power generation, smart grids, etc. In 2019, the company received a capital injection from Huawei's Hubble investment.
In 2020, the company's revenue was 452 million yuan, an increase of 58.2% year-on-year. Operating income in the first three quarters of 2021 was RMB370 million, an increase of 29.91% year-on-year; it is expected that the operating income for the whole year of 2021 will be 465 million yuan to 505 million yuan, an increase of 9.46% to 18.88% over 2020. But as far as is known, the company is not yet profitable and has accumulated unrecovered losses. In 2018-2020, the company's net profit declined year by year, and the cumulative unmade loss by the end of 2020 was -158 million yuan.
The heat of the industry and the continuous loss of the company's finances also reflect the ice and fire of the third generation of semiconductor development.
1. China's first, the world's third semi-insulated substrate company
Semiconductors have a history of 70 years. In the past 70 years, semiconductor materials have gone through two stages of development, the first and second generations, and entered the third generation of development.
In the development stage of the first two generations of semiconductor materials, China has been lagging behind foreign countries; in the development stage of the third generation of semiconductor materials, although the international giants are still ahead of domestic manufacturers in terms of technology and experience, the overall technical gap between domestic and international giants is narrowing compared with the previous gap.
As a result, the third generation of semiconductor materials has also become a key industry encouraged by China's development. In 2016, the Ministry of Science and Technology and other four ministries and commissions mentioned the development of "third-generation semiconductors" for the first time in the "Special Plan for Promoting Scientific and Technological Innovation Cooperation in the Construction of the "Belt and Road"" in the "Special Plan for Promoting scientific and technological innovation cooperation in the "Belt and Road". By 2021, the "14th Five-Year Plan" has clearly mentioned that it is necessary to concentrate resources on tackling core technologies, especially "wide bandgap semiconductors such as silicon carbide and gallium nitride (that is, third-generation semiconductors)".
For a time, third-generation semiconductors became an emerging hot industry. According to semiconductor analyst firm Yole, the global siC power device market size will increase from $540 million in 2019 to $2.56 billion in 2025. Under this development opportunity, Shandong Tianyue has become an industry leader.
According to the prospectus of Shandong Tianyue, the company's revenue in 2020 is 452 million yuan, of which the semi-insulated substrate revenue accounts for 81.6%, the conductive substrate accounts for less than 1%, and the semi-insulated substrate is the company's main source of revenue. According to Yole's data, in 2020, Shandong Tianyue ranked first in the semi-insulated silicon carbide substrate market share in China and third in the world, after Wolfspeed and II-VI, with a share of 30%.
In addition, to examine the strength of a semiconductor company, it also depends on its process level. At present, the more mainstream in the world is a six-inch and four-inch substrate, and has a mass production capacity of eight inches. The larger the substrate, the more chips can be made, which also means that the company has stronger technical capabilities.
From the information disclosed by Shandong Tianyue, the company has already had the mass production capacity of the six-inch substrate, and the eight-inch conductive substrate has also entered the research and development stage. However, in the past three years, from the perspective of sales, the revenue of the four-inch substrate accounted for 98.29%, and it will become the main source of revenue in the short-term future.
This means that compared with the international mainstream technology level, Shandong Tianyue still has a big gap.
2. Who else is doing third-generation semiconductors?
The industrial chain of the third generation of semiconductors includes substrates, epitaxy, devices and other links, in which China has the main enterprises, equipment and production also have some enterprises involved, the industrial chain can achieve independent controllability.
Among them, most of the device manufacturers have been listed, including Sanan Optoelectronics, China Resources Micro, Tyco Tianrun, BYD Electronics, Silan Micro, Star Semiconductor, Yangjie Technology, etc.; the manufacturers focusing on epitaxy, Han Tiancheng and Dongguan Tianyu, have not yet been exposed to the listing plan; and the manufacturers who focus on the substrate like Shandong Tianyue, such as Tianke Heda and Tongguang Crystal, have also reached the listing stage.
The core of substrate manufacturing is "crystal growth", and the requirements for raw materials and processes are relatively high, so the substrate is the main cost item of silicon carbide devices. The industry believes that substrates account for about 50% of the silicon carbide value chain. Leaving aside the sanan optoelectronics of the whole industrial chain layout and the luxiao technology that rubs hot spots everywhere, the more powerful competitors in the current substrate field are mainly Shandong Tianyue, Tianke Heda and Tongguang Crystal.
In fact, these three substrate companies have been chased by capital in the past, and the background is full of halos.
According to publicly available data, in the past year alone, Tongguang Crystal has completed six rounds of financing from Round A to Pre-IPO to strategic financing. Among them, there are many industrial investments from downstream manufacturers such as Huichuan, BAIC and Great Wall Motors, as well as investment institutions with major state-owned backgrounds.
Coincidentally, Shandong Tianyue also completed six rounds of financing in just over two years from mid-2019 to the end of 2021. In addition to major state-owned capitals, there are also capital injections from industrial capital such as Huawei Hubble, CRRC Times and Xiaopeng Motors. At present, in addition to the major shareholder Zong Yanmin, the more shares are Jinan State Materials 10%, Liaoning Zhongde 8.8%, hubble 7%.
Source: Sky Eye Check
Tianke Heda is a company with a "state-owned background", which originated from the Institute of Physics of the Chinese Academy of Sciences, which was listed on the "New Third Board" as early as the end of 2016, and during the capital increase and equity transfer from 2017 to 2019, there were "big funds" and state-owned capital holdings. In July 2020, the IPO application submitted by Tianke Heda for the Science and Technology Innovation Board was accepted, but the company revoked the IPO application in December 2020.
Although the three companies are focused on the substrate materials of third-generation semiconductors, and have also received the attention of capital and industry, there are certain differences in products and positioning of the three. For example, Shandong Tianyue is more focused on semi-insulated substrates, Tianke Heda is more concerned about conductive substrates, and public information shows that the two sides of the same optical crystal are balanced.
In the outbreak period of new energy vehicles brought about by the dual-carbon policy, conductive substrates will be the focus of short-term future competition.
Tesla's Model 3 is the first electric model to use silicon carbide power devices, compared to the Model S using IGBT modules, the Model 3 brings an increase in the efficiency of the inverter, and then improve the endurance. New energy vehicle manufacturers BYD and Nio have also announced that they will use silicon carbide solutions to improve the efficiency of power systems. Just in December 2021, the new generation of C-Power 220s incubated by CRRC Times Electric C-Car platform was officially released, which is the first high-power electric drive product based on autonomous silicon carbide in China, with a system efficiency of up to 94%.
Although Shandong Tianyue conductive substrates account for less than 1% of revenue in 2021, it is not difficult to find that Shandong Tianyue also hopes to develop business-guided electric substrates. On December 30, 2021, Shandong Tianyue announced the completion of a strategic investment of nearly 100 million yuan in Xiaopeng Automobile, which shows the decision of Shandong Tianyue. In the results of the listing and issuance of the Science and Technology Innovation Board announced on January 6, The Winning Investment of CATL Times, the GuangqiQi Of GUANGZHOU AUTOMOBILE Group, saic motor group and Xiaopeng Automobile all showed shareholding investment, and it can also be seen that silicon carbide materials will inevitably be the main materials for China's new energy vehicle power devices in the future.
At present, China's car companies have announced the third generation of semiconductor power devices, and the downstream demand is still rich.
Tesla recently announced that its pure electric vehicle sales in 2021 will be 930,000 units, and it is expected that production and sales will exceed 1.2 million units in 2022. According to the calculation of a substrate for two vehicles, Tesla alone is expected to use up 600,000 substrates in 2022, and the current global production capacity of 400,000-600,000 pieces per year is far from enough. Therefore, the explosive space of this market is visible to the naked eye. The successful listing of Shandong Tianyue also reflects the recognition of the third generation of semiconductors by capital.
But at the same time, how to use funds to increase production capacity also requires customers to think forward with third-generation semiconductor manufacturers. After all, the competition of the third-generation semiconductor substrate depends on the landing situation in the new energy vehicle.