In the field of semiconductors, twelve potential targets have been explored: Shuguang, Jingjiawei, Fudan Microelectric, Shanghai Beiling, Haiguang Information, Weier Shares, Unigroup Guowei, Montage Technology, Loongson Zhongke, Cambrian, Anlu Technology, and Huada Jiutian. In the field of wafer manufacturing and IDM, look at three targets: China Resources Micro, Silan Micro, Sai Microelectronics. SMIC is the absolute leader in the field of wafer manufacturing, but SMIC's market value exceeds 400 billion, and the probability of ten times in five years is extremely low, so the strategy is abandoned, but it will keep a close eye on its trend.
1. Overview
Integrated circuits are the core components of the semiconductor industry, logic circuits (CPU), microprocessors (MPUs), analog circuits (Analog Circuits) and memory (Memory) occupy half of the semiconductor market, is a well-deserved semiconductor pillar products. The integrated circuit industry takes chip application as the ultimate purpose, which can be mainly divided into three major links: design, manufacturing, packaging and testing, of which the wafer manufacturing link is the process of making the design layout into a light mask, transferring the circuit graphic information on the light mask to the silicon wafer, and forming a circuit on the wafer.
Wafer manufacturing needs to develop a process architecture suitable for the production of various chip products to achieve mass production, the overall manufacturing process is complex, the entire manufacturing process involves about 300-400 processes, mainly including wafer cleaning, thermal oxidation, lithography, etching, ion implantation, annealing, diffusion, chemical vapor deposition, physical vapor deposition, chemical mechanical grinding, wafer detection and other links. Wafer manufacturing requires a wide range of equipment, equipment precision, material performance, plant construction (clean room, etc.) requirements, high overall production difficulty, large cost investment, high technical barriers, is a pearl in the crown of the semiconductor industry, but also the semiconductor industry in various countries compete for the industrial highland.
There are two main modes of wafer manufacturing, one is the IDM mode that covers all aspects and can independently complete all aspects from chip design, production and sales, and the other is the Foundry mode that is only responsible for wafer manufacturing and does not involve design and packaging and testing:
(1) IDM model (Integrated Device Manufacture, vertically integrated manufacturing): covering all links of integrated circuit design, manufacturing, packaging and testing of the industrial chain, with integrated circuit design department, fab, packaging and testing factory, can design, produce, package and test chip products by itself, and has its own brand of the company. IDM is the main form of early semiconductor companies, because it belongs to the typical asset-heavy model, the R & D capabilities, financial strength and technical level requirements are higher, there are fewer companies that can maintain the IDM model, and the typical players who currently use the IDM model are Intel and Samsung.
(2) Foundry mode, wafer foundry: only provide integrated circuit manufacturing links, can complete chip manufacturing but generally do not have chip design capabilities. The birth of Foundry mainly stems from the specialization of the integrated circuit industry chain - the integrated circuit industry chain has gradually formed Fabless (fabless design company), Foundry (wafer foundry), packaging and testing companies in the process of development, respectively according to the advantages and endowments of their respective enterprises to specialize in part of the production links, to achieve efficient use of technology, capital, etc. Due to the difficulty of wafer manufacturing and large cost investment, Foundry is also an asset-heavy model, similar to IDM, there are fewer enterprises that can maintain high capital expenditures and bear heavier operating and management costs for a long time, and the world's major Foundry factories are TSMC, Global Foundry, UMC and SMIC.
IDM and Foundry two wafer manufacturing models have their own differences, but they are both products of the development of the semiconductor industry, and there are also Fabless responsible for chip design, packaging and testing factory model only responsible for packaging and testing, these production models have their own advantages and disadvantages, and have cultivated a number of global leading enterprises under years of development.
Representative IDM companies: China Resources Micro and Silan Micro; A foundry company: Sai Microelectronics.
Second, the main business and product matrix, core competitiveness and investment highlights
(1) China Resources Micro
1. Main business and product matrix
The company is China's leading semiconductor enterprise with the ability to integrate the whole industry chain such as chip design, wafer manufacturing, packaging and testing, focusing on the field of power semiconductors, intelligent sensors and intelligent control, providing customers with a wealth of semiconductor products and system solutions. The company's product design is independent, the whole manufacturing process is controllable, and it has strong product technology and manufacturing process capabilities in the field of discrete devices and integrated circuits, forming an advanced characteristic process and a series of product lines.
At present, the company's main business can be divided into two major business segments: products and solutions, manufacturing and services. The company's products and solutions business segment focuses on the fields of power semiconductors, intelligent sensors and intelligent control. The company's manufacturing and service business mainly provides semiconductor open wafer manufacturing, packaging and testing services. In addition, the company provides mask manufacturing services.
At present, the company's product and solution business mainly adopts the IDM business model, while the manufacturing and service segment business provides professional services to domestic and foreign semiconductor companies. IDM model refers to the business model of all or major business links including chip design, wafer manufacturing, packaging and testing. The company's products and solutions adopt the IDM business model, mainly because the IDM model will have a deeper accumulation in the comprehensive link of R&D and production, which is conducive to the accumulation of technology and the formation of product groups. In addition, IDM enterprises have the advantage of internal integration of resources, in IDM enterprises, the time required from chip design to manufacturing is short, silicon verification is not required, and there is no process docking problem, thereby speeding up the time to market of new products, and at the same time, efficient process customization can be carried out according to customer needs. In the field of power semiconductors, due to the higher requirements for the combination of design and manufacturing, the IDM model is more conducive to the accumulation of design and manufacturing processes, and the speed of launching new products will be faster, so that it can obtain stronger competitiveness in the market. This model requires high enterprise technology, capital and market share.
2. Core competitiveness and investment highlights
(1) Extension M&A + connotation development has created IDM leaders, and profitability has continued to improve. CR Micro products focus on the fields of power semiconductors, intelligent sensors and intelligent control, and the company has both wafer manufacturing and packaging and testing business, ranking first in domestic power devices and third in wafer manufacturing. The company belongs to China Resources Group, through the merger of Chinese semiconductor pioneers such as Huake Electronics, China Huajing, Shanghua Technology, etc., as well as continuous connotative extension and development, integrating design, manufacturing and packaging.
(2) Power devices + wafer foundry prosperity is rising, and the company's performance has ushered in incremental space. Since the second half of 2020, the production capacity of 8-inch fabs has continued to be tight, causing the supply of power management ICs and power semiconductors to exceed the demand, and the price increase tide has started. Since the company adopts the IDM mode of operation, it can ensure that the company's products are fully supplied and fully benefit from the strong demand for power devices. In the long run, 5G, new energy and other downstream fields bring a large number of power semiconductor demand, the company as a domestic power device leader, MOSFET can cover -100V to 1500V range of low, medium and high voltage full series, at the same time the company has established the industry-leading Trench-FS process platform, and has 600V-6500V IGBT process capabilities, the future will benefit deeply. In terms of manufacturing and packaging and testing, the company has a number of production lines. Under the shortage of wafer foundry and the boom in packaging and testing, the company's performance has also ushered in upward flexibility.
(3) Forward-looking layout of third-generation semiconductors and continuous strengthening of leading advantages in the industry. Due to the characteristics of wide band gap, high breakdown electric field, and high thermal conductivity, the use of third-generation semiconductors in power devices is booming. According to Yole data, the market size of SiC power devices is expected to grow at a compound annual growth rate of 29% and reach about $2 billion in 2024. The market size of GaN power devices will also exceed $700 million in 2025. With the first-mover accumulation of silicon wafer production lines, the company currently has the first 6-inch commercial SiC wafer production line in China, and has officially mass-produced 1200V and 650V industrial-grade SiC Schottky diode products, with a planned production capacity of 1000 pieces per month. With the industrialization of SiC diodes, the focus of research and development will shift to SiC MOSFETs, focusing on the needs of industrial control and automotive electronics. In addition, the company is also actively using the advantages of existing IDM to carry out silicon-based GaN research and development, and the GaN production line is expected to achieve a breakthrough.
(2) Silan Micro
1. Main business and product matrix
The company's main business and main products include integrated circuits, semiconductor discrete devices, LED (light-emitting diode) products and other three categories. After more than 20 years of development, the company has developed from a pure chip design company to one of the few comprehensive semiconductor product companies in China with IDM model as the main development mode. Starting from the integrated circuit chip design business, the company has gradually built a chip manufacturing platform with characteristic processes, and has extended the technology and manufacturing platform to the packaging field of power devices, power modules, MEMS sensors, high-end LED color screen pixel tubes and optoelectronic devices, and established a relatively complete IDM business model.
2. Core competitiveness and investment highlights
(1) IDM faucet with more than 20 years of cultivation. Founded in 1997, Silan Micro has been involved in wafer manufacturing since 2001 and has become an IDM enterprise. The company has a 5/6-inch wafer fab (Silan Integration), an 8-inch fab (Silan Jixin), a 12-inch fab (Silan Jike), an epitaxial factory (Chengdu Silan Corporation), a packaging and testing plant (Chengdu Jijia), an LED chip factory (Silan Mingxin), an LED packaging factory (Mecala) and an advanced compound fab (Silan Mingjia). Products cover power devices, analog circuits, MCU, MEMS sensors, LED chips and other categories, production capacity scale and product portfolio are in the leading position in China.
(2) Power semiconductors are the core of the new energy era, and tight production capacity brings a high boom cycle. The demand for new energy vehicles and new energy power generation is developing rapidly, and power semiconductors are the core components of new energy vehicle electric drives, photovoltaic inverters, wind power converters, and energy storage PCS, accounting for an important proportion in the cost and are one of the semiconductor products benefiting from the growth of the new energy field. The rapid growth of demand has led to tight production capacity and high prosperity of power semiconductor-related products, giving domestic enterprises valuable opportunities for domestic alternatives.
(3) Capacity advantage + rich categories, platform-based IDM leaders are beginning to take shape. Compared with domestic IDM and wafer foundries, Silan Micro's production capacity scale and layout of 12-inch production line are in the leading position. Although consumer demand is under pressure, the demand for IGBT and SJ-MOS is still strong. With the release of the company's production capacity, the revenue scale of related products is expected to grow rapidly, and the company's product structure is expected to continue to improve. Looking forward to the future, as the competition in the power semiconductor industry enters the second half, the cost advantage of the production capacity side is expected to help the company win in the market competition, and the company's comprehensive product layout is also expected to bring strong synergy and help the company's long-term development.
(3) Sai Microelectronics
1. Main business and product matrix
The company is the world's leading and internationally operated high-end integrated circuit wafer foundry manufacturer, and is also a domestic professional wafer manufacturer with independent intellectual property rights and mastering core semiconductor manufacturing technology. The company's main business includes MEMS process development and wafer manufacturing, GaN epitaxial material growth and chip design, among which the specific business that contributes to the company's performance is mainly MEMS chip process development and wafer manufacturing.
(1) MEMS business
The company's existing MEMS business includes two categories: process development and wafer fabrication:
The company's MEMS process development business refers to the development of product manufacturing process flow according to the chip design scheme provided by customers, aiming at meeting product performance, realizing product "producibility" and balancing economic benefits, using process technology reserves and project development experience, and providing customers with customized product manufacturing processes. The company's MEMS wafer manufacturing business refers to providing customers with batch wafer manufacturing services after completing the process development of MEMS chips, realizing product design curing and production process curing. MEMS refers to micron to millimeter size miniature devices or systems that integrate microsensors, signal processing and control circuits, microactuators, communication interfaces and power supplies constructed by semiconductor production processes; MEMS organically combines the electronic system with the surrounding environment, the microsensor receives motion, light, heat, sound, magnetic and other signals, and the signal is then converted into an electrical signal that the electronic system can identify and process, and some MEMS devices can realize the operation function of the external medium through the microactuator.
(2) GaN business
The company's existing GaN business includes epitaxial materials and chip design:
The company's GaN epitaxial material business refers to the growth and external sale of 6-8 inch GaN epitaxial materials through MOCVD equipment based on self-mastered process know-how, according to established technical parameters or customer-specified parameters. The company's GaN chip design business refers to the design and development of GaN power and microwave chips based on technology accumulation, and sells and provides related application solutions to downstream customers.
GaN is a category of the third generation of semiconductor materials and devices, because its band gap (Eg) greater than or equal to 2.3 electron volts (eV), also known as wide bandgap semiconductor materials, compared with the first and second generation semiconductor materials silicon (Si) and gallium arsenide (GaAs), the third generation semiconductor materials and devices have high thermal conductivity, high breakdown field strength, high saturation electron rate and other advantages, can meet the new requirements of modern electronic technology for high temperature, high power, high voltage, high frequency and radiation resistance and other harsh conditions.
2. Core competitiveness and investment highlights
(1) Strategic transformation focuses on semiconductor business, endogenous and external extension continues to expand. Since its establishment, the company has successfully extended its business to the upstream of the industrial chain through endogenous development and epitaxial mergers and acquisitions starting from the application of sensing terminals, and the process development and wafer manufacturing of MEMS chips have become the company's main core business. In December 2021, the company issued an announcement on the acquisition of German production line assets by a Swedish subsidiary, further expanding the business scope of the company's core main business sensor and chip process manufacturing to the field of automotive electronics, rapidly increasing overseas production capacity compatible with MEMS and CMOS chip integration process manufacturing, and improving the company's comprehensive competitiveness on a global scale.
(2) MEMS manufacturing technology is leading the world, and the increase in production capacity has promoted the increase in performance. MEMS downstream applications mainly include consumer electronics, industrial control, communications, automotive, medical and other fields. Because MEMS devices have the advantages of small inertia, high resonance frequency and short response time, their application degree is also increasing. The company is the world's leading MEMS foundry, and its subsidiary Silex Sweden continues to expand its production capacity, and FAB1&FAB2 continues to increase the overall production capacity of its production line by purchasing key equipment. At the same time, the company's holding subsidiary Celex Beijing "8-inch MEMS International Foundry Line" (Beijing FAB3) has officially started mass production, and the second phase of production capacity (20,000 pieces/month) has started construction. With the wide expansion of MEMS terminal equipment and the growing demand for related products, the company's revenue is expected to continue to increase as production capacity climbs.
(3) Actively expand the GaN business and have made a number of breakthroughs. In terms of GaN epitaxial materials and chips, the company has begun to sign mass sales contracts and deliver them successively, promoting the research and development and launching of power chip products and application solutions of different specifications. In addition, the company continues to lay out the GaN industry chain, and its subsidiary Juneng Chuangxin builds a GaN chip manufacturing production line with equity participation, and actively promotes the accumulation of technology, process and products to meet the demand for GaN epitaxial materials and GaN chips for next-generation power and microwave electronic chips.
Third, five-factor observation model
(1) China Resources Micro
China Resources Micro's four financial indicators have reached four standards, and the growth rate of revenue and net profit in the past two years has been good, and the gross profit and ROE have been on the rise in the past five or six years.
2022 Performance Express Tracking:
In 2022, revenue growth and net profit growth slowed down, and ROE decreased slightly.
(2) Silan Micro
Silan Weiwei's four financial indicators have reached two standards, and the revenue growth rate in the past two years has been good, but the net profit growth rate fluctuates greatly, and the absolute value of net profit is small, facing losses in 2019-2020, gross profit is acceptable, and the ROE in 2021 will exceed 30%, but the sustainability remains to be seen. In addition, the asset-liability ratio of Silan Micro is much higher than that of CR Micro, which may be one of the reasons for the high ROE, on the other hand, it reflects that Silan Micro's IDM model may face the test of financial pressure, and it is necessary to keep an eye on.
2022 Performance Express Tracking: Not yet disclosed.
(3) Sai Microelectronics
The four financial indicators of Sai Microelectronics have reached one standard, the gross profit is not much, the others are not up to standard, and the fluctuation is large.
2022 Performance Express Tracking:
Cymicroelectronics lost a lot in 2022. The reasons for the loss are:
1. In 2022, under the background of sudden international geopolitical conflicts, high inflation in Europe, and the ongoing COVID-19 epidemic, the operation and maintenance costs of the company's Swedish production line increased significantly, while the demand for the global consumer electronics market in the current period declined, and the overdue payment of individual customers led to the corresponding impairment of accounts receivable; On the other hand, the company's acquisition of FAB5 in Germany (which has been terminated) was not completed as soon as planned in 2022, incurring costs and expenses, while the expected capacity expansion, relocation and restructuring between the Swedish and German production lines were interrupted. The combination of these factors has led to the company's Swedish MEMS (Microelectromechanical Systems) production line (FAB1&2), although it still strives to maintain its operating income volume (in Swedish krona), but the continuous growth trend of the past few years has not been extended in the reporting period. At the same time, the combination of equity incentive expense factors at the group level ultimately led to a significant decline in the profitability of FAB1&2 in Sweden during the reporting period. In addition, exchange rate fluctuations between the Swedish krona and the renminbi during the reporting period further amplified these adverse changes.
2. The company's Beijing MEMS production line (FAB3) was still in the early stage of operation and capacity climbing stage during the reporting period, and the market demand for consumer electronic products that had achieved mass production in the foundry wafers declined, orders were less than expected, and the payment of individual customers in the field of consumer electronics was also overdue, resulting in corresponding impairment of accounts receivable; Foundry wafers with high added value in communications, industrial automobiles, and biomedical fields are still in the stage of process development, product verification or risk trial production, and have not yet entered the stage of mass production. Therefore, although the revenue achieved by the company's Beijing FAB3 in the reporting period increased significantly compared with the previous period, it was far from the previously set equity incentive target (350 million yuan); at the same time, the expansion of production capacity and personnel team of Beijing FAB3 Beijing FAB3 continued to be carried out, objectively continuing to face huge depreciation and amortization pressure, factory operation and personnel expenses also further increased, coupled with domestic COVID-19 epidemic recurrence, the company's group level equity incentive expenses and other factors. The loss scale of Beijing FAB3 in this period has further expanded.
In summary, the combined operating conditions of the Swedish production line and the Beijing production line during the reporting period led to the company's core MEMS main business turning from profit to loss for the first time, and the loss amount was large.
4. Situational Observation Method
(1) China Resources Micro
From the perspective of the technical pattern structure of the monthly price level, CR Micro belongs to the starting stage, and the bottom structure is relatively stable.
(2) Silan Micro
From the perspective of the technical pattern structure of the monthly price level, Silan Micro belongs to the stage of rushing high and falling consolidation, and the bottom structure of the stage has not yet formed.
(3) Sai Microelectronics
From the perspective of the technical pattern structure of the monthly price level, Sai Microelectronics belongs to the stage of rushing high and falling downward consolidation, and the bottom structure of the stage has not yet formed
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