Shengqun: Signed a long order with the foundry Q4 to significantly increase the output of 32-bit MCUs

Image source: Electronic Times

Armstrong Tsai, spokesman for MCU Shengqun, said that due to the long-term capacity supply contract with the foundry partner, the company expects to significantly increase the production of its 32-bit MCU chips from the fourth quarter of 2022.

According to the Electronic Times, Tsai noted that the OEM capacity secured by Shengqun for the production of 32-bit MCUs will double in the fourth quarter of 2022, enabling the company to better fulfill orders transferred from IDM, which is shifting the focus of production to automotive MCUs.

Tsai said Shengqun is having customers validate their 32-bit MCUs to get their transferred orders and will see longer order visibility after passing the verification because customers are less likely to turn orders back to IDM. He said the company expects to significantly increase shipments of 32-bit MCUs for remote meter reading, 5G communications and motorcycle GPS applications starting in the fourth quarter of 2022.

According to the financial report, Shengqun's revenue in 2021 increased by 27% year-on-year to a record NT$7.128 billion (US$256.4 million), and its net profit almost doubled to NT$2.044 billion. MCUs accounted for 79% of Shengqun's total revenue in 2021, and shipments increased by 5% year-on-year to 870 million units. Sales of its 32-bit MCUs increased 44% year-over-year to 44 million.

Industry sources said that due to the fierce competition from Chinese mainland suppliers, the price of MCUs, especially the price of mainstream 8-bit products, is difficult to rise in 2022, and if the foundry continues to raise the quotation, the supplier will have to digest the increased production costs. At present, MCU is mostly produced in 8-inch fabs, and production capacity continues to be tight.

According to Tsai, with the 8-bit MCU dominating most of its shipments, Shengqun will not raise prices to reflect a possible increase in foundry quotes, but will instead try to increase production of 32-bit products in the second half of the year to maintain a certain level of gross margin. (Proofreading | Value）