Puran shares: Cautiously optimistic about NORFlash and EEPROM prices

Jiwei network news, recently, Puran shares said in an institutional survey that the main reason for the decline in net profit in Q4 of 2021 is partly the decline in gross profit, and partly the increase in large expenses such as equity incentive expenses and year-end bonuses in the fourth quarter.

Regarding the price trend of NORFlash and EEPROM, Puran shares said that from the perspective of the entire industry, the price of NORFlash will be adjusted, at present, due to the slowdown in the supply and demand relationship of the industry, the price of NORFlash products has some differentiation according to the different product categories, some product companies are still raising prices, some product companies have price corrections, and the company will always balance product prices according to market supply and demand.

Overall, the company remains cautiously optimistic about this year's prices, and this confidence mainly comes from the company's planning for NORFlash products this year in the company's continuous product and customer structure adjustment, new product research and development iterations and other aspects. The company is optimistic about the long-term market of NORFlash, and the downstream demand for NORFlash will continue to grow due to the increase in applications such as AIoT, automotive, networking, and communications in the entire industry.

In terms of EEPROM, after combining the comprehensive factors such as market trend analysis, supply chain impact, and customer acceptable range, the company has made a reasonable price increase for EEPROM products applied to the camera module series since January 2022; secondly, the company continues to adjust the product application and customer structure to iterate with more advanced processes; third, the company will also further expand in the car application, and the vehicle application is an important part of the company's medium- and long-term strategic planning. As early as 2019, a NORFlash cooperated with Beidou Xintong to enter the vehicle front-loading navigation system, and since the end of last year, the company's multiple EEPROM products with capacity in line with the on-board standard have gradually been sending samples to well-known customers.

In general, the company maintains a cautious and optimistic attitude towards the prices of NORFlash and EEPROM, at the same time, the company's management is also prepared to deal with price fluctuations, such as making some breakthroughs from its own cost end, developing to higher processes, optimizing design and processes and processes in the supply chain, so that the overall gross profit margin can be guaranteed. The company's management pays close attention to market dynamics and actively responds to challenges.

Puran shares pointed out that as far as NORFlash products are concerned, the current large-scale market mainly includes Winbond, Wanghong, And Gigabit Innovation, and in 2020, the company ranks sixth in the world in NORFlash products, with rapid growth. From the perspective of the whole industry, large enterprises such as Europe and the United States have gradually withdrawn, giving domestic enterprises more opportunities. The memory market is relatively general, with more segments and a broad market, and many new application areas in the downstream have great potential.

In terms of segmentation, the company's products are mainly positioned in small and medium-sized capacity, that is, Flash products of 128M and below, the mainstream process in this capacity field is 65/55nm, and a small part is 50nm and below, the company is the first to achieve 40nm process company, in the field of small and medium-sized capacity can meet the various needs of customers, and has a relative advantage in power consumption. In the trend of smaller downstream end equipment, companies can also offer smaller sizes. At the same time, the company will also actively develop large-capacity products to expand more markets, and the large-capacity products developed will be based on THEOX process, and its single-tube structure is more suitable for large-capacity products.

The company's overall strategy: on the one hand, the design and development team cooperates with the foundry to optimize the process, on the other hand, the market will continue to expand to a wider and deeper market with the help of the advantages of existing customers and partners. In general, in the large-capacity field, we will focus on the ETOX process, the SONOS process as a supplement, and the small and medium-capacity areas will be mainly based on the SONOS process and supplemented by the ETOX process.

Regarding the situation in the downstream market, Puran shares believe that at present, it seems that it is still developing in a good direction, macro aspects, a series of policies introduced by the state to give the industry environment a good tone, the industry, the field of consumer electronics will continue to produce new demand with the changes in life, in addition to traditional areas such as mobile phones, TWS headphones and watches are constantly upgrading, wearable, smart home and other fields will also have some new breakthroughs. The overall company believes that the demand for consumer electronics will still have a very good trend in the future.

In terms of customers, Puran shares pointed out that in china, in addition to the company's share in the original large customers in 2021, there has been a great increase, including the effective replacement of the original suppliers, and the share of major brand customers has increased; from a foreign perspective, Japan and South Korea have made relatively large breakthroughs and realized the import of many well-known brand customers.

It is reported that the company's overseas customers and performance expansion last year has a large increase, this year will continue to further deepen the needs of overseas customers, in general, the company at home and abroad will be more balanced to develop.

Regarding the growth in 2022, Puran said that the main part of the current support for the company's performance goals can be guaranteed, and the company and the two fabs currently cooperating continue to firmly maintain strategic cooperative relations, and have also held full discussions with suppliers, and the demand of subsequent companies will continue to increase. In addition, the company will look for new potential cooperation opportunities based on the original determined production capacity. At the same time, the company will continue to develop in advanced processes to increase wafer monolithic grain output to obtain more increments of overall production capacity.

Puran shares said that the current foundry on the company's price state tends to be stable, but the supply and demand relationship between different process lines is not completely consistent, the price increase is not consistent, do not rule out that there is still price growth in some areas, there is a situation of short supply, but the company believes that the overall production capacity this year is still tightening, and there will be no obvious loosening in prices.

It is reported that under the premise of the company's introduction of sonos process, first of all, the process itself is closely related to the process, the company can develop and iterate the product process leading the market through the architecture of SONOS, followed by the combination of design and process, which can enable the company to obtain additional product performance technology improvement, including product reliability, etc., which need to be closely coordinated with the design; again, the company's definition of the product, the company's products will have special characteristics inside, Compared with the traditional NORFlash, there are additional functions, which will give customers a certain degree of convenience, combined with these, we will give customers a certain degree of added value in product definition.

In addition, when the market develops fast enough, the company's advanced technology will be imitated, so the company itself is also constantly improving and upgrading, constantly improving the performance and reliability of products, robustness, and breaking through more high-end functions. Together, these create a large ecological barrier. In addition, large design manufacturers will have different considerations in the choice of comprehensive difficulty and architectural methods, it is difficult to change after a company forms a style, and the R & D capabilities and resource allocation of new small companies have to cross the company's barriers and customer base and have relatively large obstacles, but the most important thing is to rely on their own innovation.