Jiwei Network reported that Siruipu Microelectronics Technology (Suzhou) Co., Ltd. (stock abbreviation Siruipu, stock code 688536) was founded by Zhou Zhixu and Dr. Ying Feng in 2007, deeply cultivated signal chain linear products, is an integrated circuit design enterprise focusing on the research and development and sales of analog integrated circuit products, in 2019 the company received investment from Huawei's Hubble Investment Company, and was listed on the Science and Technology Innovation Board in September 2020.
Since its inception, Sripu has always adhered to the research and development of high-performance, high-quality and high-reliability analog integrated circuit products, the comprehensive performance of many core products has reached the international level, the company is one of the few local enterprises to achieve a breakthrough in the technology of communication system analog chips, becoming a global supplier of 5G communication equipment analog integrated circuit products, currently has more than 1200 product models available for sale.
Figure 1 Brief development process of Sripu
Overseas senior teams focus on analog ICs to fill the gap in the domestic high-performance market. From 1994 to 2007, Mr. Zhou Zhixu, founder, chairman and chairman and general manager of Serapu, worked in the semiconductor division of the United States, responsible for process, device and analog design research and development; from 2008 to 2012, he served as chairman and general manager of Suzhou Siripu; from April 2012 to December 2015, he served as the chairman and general manager of Serapu Co., Ltd.; and in January 2016, he served as the chairman and general manager of the company after the company was restructured into a joint-stock limited company. Mr. Ying Feng, Co-Founder and Vice President of the Company and Chief Technology Officer of texas instruments from 1998 to 2007, as the technical manager of the hybrid digital IC design department, and from 2007 to 2009, he worked at C2Microsystems. Inc., as The Design Director; from 2009 to 2012, he served as the Chief Technology Officer of Suzhou Sriepu; from April 2012 to December 2015, he served as the Chief Technology Officer of Serapu Co., Ltd.; and in January 2016, he served as the Company's Director, Deputy General Manager and Chief Technology Officer after the company was restructured into a joint-stock limited company.
As of the 2022H1 reporting period, the major shareholder of Srieura is Huaxin Venture Capital, with a shareholding ratio of 18.55%, the company is jointly initiated by Walden International, the National Development and Reform Commission and the Shanghai government, shareholders include TSMC, Micron Technology, SMIC, ARM and other internationally renowned semiconductor companies; founder Zhou Zhixu holds 8.38% of the shares, Ying Feng holds 7.9%; Huawei subsidiary Hubble Technology holds 6%, the company currently has no actual controller, and all parties to the company's important decisions participate in the decision.
Figure 2 Shareholding structure chart of the company as of 2021H1
Sriepl's products mainly cover two categories of signal chain analog chips and power management analog chips, including operational amplifiers, comparators, audio/video amplifiers, analog switches, interface circuits, data conversion chips, reference voltage chips, LDO, DC/DC converters, power monitoring circuits, motor drivers and battery management chips.
Figure 3 Schematic diagram of the company's product functions
Signal chain analog chip: Signal chain is a system signal from input to output path, signal chain is from signal acquisition (sensor), signal processing (amplification, reduction, filtering), analog-to-digital conversion (A / D converter) to program processing (microprocessor) This is a general term for the signal processing process, which is composed of a module (chip) as a whole "chain". Under the transmission of the signal chain chip, real-world sounds, pressure, temperature, humidity, images, distances and other real signals will be converted into digital world information, and then these digital signals will be handed over to the microprocessor MCU for processing. Signal chain chips are an important branch in the field of analog chips, according to IC Insights data, the global signal chain analog chip market size increased from 8.41 billion US dollars in 2016 to 9.92 billion US dollars in 2020, and is expected to reach 11.8 billion US dollars in 2023, with a compound growth rate of 4.21%. The advent of the 5G era has brought about the vigorous development of the domestic signal chain chip market, and the products of domestic signal chain chip manufacturers are still in the low-end field, mainly in the field of amplifiers, comparators, and interface chips, and the product homogenization is serious; for high-end ADCs, high-frequency devices and base station signal chain chips, etc., there are fewer involved. Moreover, domestic manufacturers lack scale advantages and cannot provide serialized solutions. From the perspective of the industrial chain, due to the long-term positioning of local enterprises in the downstream of the signal chain chip, the market is also more cautious about the use of domestic signal chain chips, there is still a huge gap between domestic manufacturers and signal chain chip giants TI, ADI and other international manufacturers, Siriphol in the field of signal chain technology level is particularly prominent, is one of the few domestic companies that can directly compete with the world's well-known companies in the same industry, and break through overseas technology monopoly in key areas. Signal chain analog chips mainly include three categories: linear products, converter products, and converter interfaces, of which the first two have a large market size.
In linear products, amplifiers and comparators are usually represented, and converters are mostly represented by ADCs and DACs. To convert from the analog world to the digital world, an analog-to-digital converter (ADC) is required, and a digital-to-analog (DAC) is required to convert from the digital world to an analog world, and in general, ADCs are mostly used after sensors and front-end amplification circuits. Sriepl's business in the signal chain is mainly based on linear products and converter products, with the highest gross profit margin of converter products and explosive performance in 2019. During the current period, the company shipped 53 million analog integrated circuit products used in equipment to communication customers, which were used in 5G base station systems on a large scale.
The main products used in 5G base stations are ADC/DAC, RF switch, switching chip and so on. Linear products are mostly used for the conditioning and filtering of power signals in communication base stations, converter products are mostly used for monitoring and loop control of specific devices of communication base stations, and special ADC technology is mostly used in mixed-signal chips to provide real-time data for energy consumption monitoring and regulation of 5G base stations. In recent years, the number of product models of the company has increased, and the application areas are mostly concentrated in industrial control and communication.
Figure 4 Product profile of Siripu Signal Chain
Power management analog chip: is the power supply heart of electronic equipment, responsible for the electronic equipment required for power conversion, distribution, detection and other control functions, its functions generally include: voltage conversion, current control, low dropout voltage regulation, power supply selection, dynamic voltage regulation, power switch sequencing control, etc.; is a key device in electronic equipment, its performance has a direct impact on the performance and reliability of electronic products, widely used in various types of electronic products and equipment, is one of the largest segments of analog chips. The power management chip can be divided into AC/DC (AC to DC), DC/DC (DC to DC), driver IC, protection chip, LDO, load switch, PMIC, etc. Si Ruipu for the power management analog chip field of entry, from 2021 products began to increase, according to the company's announcement, large current low dropout linear regulator power supply and other power management products to achieve mass production, the future will focus on the layout of linear power supply, general DC / DC switching power supply, PMIC, digital multiphase power supply and battery management system and other fields, power chips are expected to inject new impetus into the company's development.
Figure 5 Product profile of Siripu power management chip
In recent years, the integrated circuit industry chain has shifted to Chinese mainland, and local system manufacturers have begun to continuously find domestic chip suppliers to cooperate. In 2016, the company established cooperative relations with the leading domestic communications industry, and has developed a new series of converter products and linear products for it, and during the run-in period with downstream companies, the company's product strength has gradually increased. In 2020, while focusing on the original business sector, Sripu actively laid out new products and technologies, and enriched product categories and product models.
Figure 6 General product core technology
Battery management products gradually achieved amplification, 2021Q1 company power management chip revenue increased by 1,240.97% year-on-year, making the proportion of power management product revenue increased to 19.8%. The company's revenue of power management products in the first three quarters of 2021 accounted for 11.14%, 14.49%, and 19.8%.
Figure 7 As of 2021Q3, the company's product revenue accounted for
With leading R&D strength, reliable product quality and excellent customer service, the company's analog chip products have entered the supply chain system of customers in many fields such as information and communications, industrial control, monitoring and security, medical and health, instrumentation and household appliances.
Figure 8 The application areas of the company's products
Sriepl chip business mainly adopts the Business Model of Fabless, which concentrates the company's resources on chip design and sales, and outsources chip manufacturing and packaging testing to other fabs and packaging test plants, thereby reducing the company's plant and equipment expenditure. In terms of wafer suppliers, the company has established strategic cooperative relations with the world's leading analog device manufacturers and maintained long-term good cooperation with the company. The company's main wafer foundry for TowerJazz, packaging and testing plants include Changdian Technology, Huatian Technology, Huatiantian Water, etc., at that time the main company was small in scale, did not have to choose a number of wafer foundries, with the company's product research and development through important milestones, rapid revenue, into the high-speed growth period, the company increased the purchase of equipment and the introduction of SMIC, Tongfu Microelectronics and other new wafer and packaging and testing suppliers and other ways to improve the supply side delivery capabilities. And in the third quarter of 2021, a total increase of more than 400, there are trading customers on behalf of customers such as Samsung, Mitsubishi Elevator, Midea (refrigeration equipment), Desay SV (automotive electronics), Panasonic Appliances and so on. It should be noted that although Sripu has established cooperation with the above customers and started trading, it still needs a certain amount of time and process to start the business volume of each client.
Figure 9 Siripu product end customers
On January 25, 2022, Siripu released its 2021 performance forecast, benefiting from the high prosperity of downstream demand, and the company's operating income is expected to be 430-440 million yuan in 2021Q4, an increase of 5.91-8.37% month-on-month. Since the equity payment expense in the single quarter of the third quarter was 30.1071 million yuan and the equity payment expense in the fourth quarter was 54.8413 million yuan, the company's non-attributable net profit in 2021Q4 is expected to be 0.88-118 million yuan, down 16-59% from the previous quarter. The company is expected to make a profit of approximately $436 million for the full year 2021 and an EPS of $5.45.
Revenue and profit have reached new highs, and the product structure is becoming more and more reasonable. In 2016, Sriepu entered the list of leading domestic communications suppliers, tailor-made converters, signal amplifiers and other products. With the deepening of cooperation, in 2019, the company's communication products began to increase, driving the revenue growth of 166% to 300 million yuan. Subsequently, the 915 ban in the United States, including TSMC, Qualcomm, Samsung, SK Hynix, Micron, etc., will no longer supply chips to Huawei. This has limited the growth of Sripu's revenue to a certain extent, but its excellent research and development capabilities have enabled its products to quickly increase in other fields, and the company's revenue in 2020 and 2021 still maintains a high-speed growth trend. From 2017 to 2020, the company's operating income increased from 112 million to 566 million, and the CAGR was 71.8%. As of the third quarter of 2021, the company's revenue is about 891 million, the communications industry contributes 60% of the company's revenue, the revenue of industrial control products accounts for about 24.48%, and the revenue of consumer electronics accounts for about 11.3%. The reasons for the rapid growth of the company's revenue are mainly: 1) the power supply product line began to gradually increase the volume, and the overall product structure was balanced. 2) New products such as high voltage isolation, high-current and low-voltage linear regulated power supply have been launched, and the establishment of MCU and AFE digital-analog hybrid product lines has led to a richer variety of product models for the company. 3) The company actively explores the pan-industry, optical communication and green energy markets, and harvests a number of new high-quality customers.
Figure 10 Revenue and profit of the company as of 2021Q3 (unit: 10,000 yuan)
Sripu's gross and net profit margins have been in a steady upward trend in recent years, with the company's consolidated gross margin of 60.99% in the first three quarters of 2021. Among them, the gross profit margin of signal chain chip products was 63.90%, and the gross profit margin of power management products was 49.18%. The company's gross margin declined slightly in the third quarter mainly due to the gradual increase in the proportion of power management products with lower gross margins in revenue. The gross profit margin of the company's chips used in the communications industry has increased year by year, reaching 66.21% in 2020, mainly because a series of converter products used in the communications industry have complex functions, integrate more than a dozen discrete devices, high reliability, higher unit prices, and bring higher gross profit margins. The slight decrease in gross margin applied to industrial control was due to the company's downward pricing of products applied to industrial control chips based on its pricing strategy. Overall, the products used in the communication industry and industrial control field have maintained a gross profit margin of more than 60% due to their complex functions and high reliability, which is much higher than that of consumer electronics. It can also be concluded that the added value of analog ICs in the industrial sector is high.
Figure 11 The overall gross profit margin and net profit margin performance of Snipu's products
Increase R&D expenditure and seize the domestic simulation market. In terms of the three-fee management of Sripu, due to the company's Fabless business model, the company does not have a production line construction, there is no interest-bearing liabilities, so the financial expenses are mostly structured deposits of banks. In terms of sales expenses, the company adopts the model of direct sales + distribution, direct sales customers are mainly Huawei, the downstream customer base of dealers is relatively stable, and the company's expenses are relatively flat. In terms of R&D expenditure, as of 2021H3, R&D expenses account for 23.97% of the company's revenue, the company has 204 R&D personnel, accounting for 67.77% of the company's total number, and there are currently nearly 20 reserve projects under research, which are not available in the progress stage. To grow into a senior engineer of analog IC, often need to have more than 10 years of experience in the industry, familiar with the IC design and wafer manufacturing process process, as well as the electrical and physical characteristics of most components, component layout and routing often require manual operation and can not be computer-aided design, so the industry chain relies heavily on the experience of engineers.
Figure 12 Three expenses of Sripu Company and R&D expenditure of the company (unit: 10,000 yuan)
The track is extremely prosperous, and the domestic substitution is carried out. The analog IC market share accounts for about 13% of the entire IC industry, and the market size is as high as 55.7 billion US dollars. About 40% of them are general-purpose ICs and 60% are dedicated ASSP analog ICs. General-purpose analog ICs are fragmented downstream and comprise many niche markets, with different end-users having different requirements for analog ICs in terms of accuracy, rate, power, linearity, and signal radiation capabilities. Dedicated analog IC products are developed specifically for customers in specific industries, and competition is not entirely based on price, but on the accumulation of functionality, quality, reliability and service. With the increase in the rate of human electrification and the increase in networked equipment showing steady growth, from the perspective of demand structure, communications, automobiles, and industry are the main downstream markets. From the perspective of future driving force, new energy vehicles may be the main driving force, and IDC predicts that the compound growth rate of the automotive analog IC market in 2021-2025 can reach 13.2%. Analog ICs in the automotive field have higher barriers to entry, longer life cycles, lower price sensitivity, customers pay more attention to reliability and stability of performance, and customers have strong stickiness. Diversification of industrial segments helps to smooth out fluctuations in the single market. At present, the analog integrated circuit market shows the competitive landscape dominated by foreign companies, according to IC Insights statistics, in 2020, the world's top ten analog chip suppliers together account for about 62% of the total market ($57 billion), as follows:
Figure 13 The top 10 analog chip suppliers in the world market
Analog chips have the characteristics of "many categories and wide applications". Internationally renowned analog integrated circuit manufacturers generally have a wide range of and dispersed customer resources, compared with internationally renowned manufacturers, Syripu company is currently smaller in scale and has fewer product categories. In order to concentrate superior resources and give play to comparative advantages, the company mainly chooses to provide analog chip products for customers in the fields of communications and pan-industry, and the company's downstream industries such as communications have a monopolistic competition market pattern and the reality of high concentration of manufacturers. As of the 2021H1 reporting period, the sales revenue of Sriepu to the top five customers totaled 347.617 million yuan, accounting for 71.71% of the operating income in the reporting period, and the concentration was relatively high. Analog chip design requires careful collocation and tuning between circuit design and manufacturing processes, and the signal connection chip is larger than the power management chip at the technical threshold. Analog IC products often have the characteristics of long life cycle, stable profitability and weak cyclicality, and most of the analog ICs with a life cycle of more than 10 years, such as the audio operational amplifier listed by TI in 1979 is still on sale. With the continuous increase of product material number, covering more downstream industries, superimposed on the life cycle of the product, the revenue will continue to increase, and the company will always be in a more benign cycle. Because in the process of realizing domestic substitution in the company, constantly developing new products and developing customer groups, endogenous extension to expand the scale, is the only way to high-end development.
To sum up: analog IC is a long-term track, the downstream application demand of Sriepu products is strong, the domestic semiconductor industry boom continues to improve; the company continues to improve the supply of product categories, in the pan-communication, pan-industry and other markets to make breakthroughs. At present, the signal chain field revenue continues to lead, the power supply business prospects can be expected, the company's products include signal chain, power supply analog chips and digital-analog hybrid analog front end, according to the company's 2021 semi-annual report, the company has more than 1400 product models, the main products include operational amplifiers, comparators, audio / video amplifiers, analog switches, interface circuits, data conversion chips, LDO, etc. As a domestic signal chain analog chip leader, the company's products are widely used in information communications, industrial control, monitoring and security, medical and health and other fields, domestic substitution, product force improvement superimposed on the strong downstream demand, the company's signal chain business is expected to continue to maintain rapid growth. Power chip business, according to the company's announcement, high-current low-dropout linear regulator power supply and other power management products to achieve mass production, the future will focus on the layout of linear power supply, general DC / DC switching power supply, PMIC, digital multiphase power supply and battery management system and other fields, power chip is expected to inject new kinetic energy into the company's development. (Proofreading/In opposition)