Despite the high expectations of the capital market for the recovery of the semiconductor industry, the recovery of the industry is relatively slow, the consumer electronics supply chain is still focusing on inventory, and artificial intelligence is expected to carry the hope of recovery.
(Source: Tuworm Creative)
The latest statistics show that in the traditional off-season of consumer electronics, affected by artificial intelligence (AI) applications and some urgent orders, the revenue of the world's top ten chip (IC) design companies in the first quarter of this year reached US$33.86 billion, an increase of 0.1% over the fourth quarter of last year.
Among them, NVIDIA's quarterly revenue growth rate topped the quarter, followed by Novatek and Weier shares (the statistical caliber is Weier Semiconductor). Compared with the same period last year, Weier Co., Ltd. remained the ninth largest chip design company in the world.
The agency expects that benefiting from the deployment of related artificial intelligence chips by cloud service providers and enterprises, NVIDIA is expected to become the leader in chip design in the second quarter, leading the world's top ten chip design companies through the "darkest moment" in revenue.
AI pulls strongly
According to a statistical report released by Jibang Consulting, a global market research institution, on June 20, in the first quarter of 2023, Qualcomm's revenue reached $7.042 billion, ranking the world's largest chip design company, followed by Broadcom and NVIDIA; On the other hand, NVIDIA had the highest quarter-over-quarter growth rate of 13.5%.
With the explosion of demand for generative AI and cloud computing power, and the new product effect of RTX 40 series, NVIDIA's two major business revenue of gaming and data center increased by about 20% and 10% respectively sequentially, and the overall first-quarter revenue increased by 13.5% sequentially to US$6.73 billion, and its market share increased from 17.5% in the fourth quarter of last year to 19.9%.
Compared with NVIDIA, "competitor" AMD's revenue decreased sequentially due to factors such as product inventory adjustment of some cloud service providers, weakening of enterprise expenses due to the impact of economic conditions, and computer-related customers experiencing inventory adjustment and consumption off-season, and although the growth of embedded and gaming business partially offset the decline in performance, first-quarter revenue decreased by approximately 4.4% sequentially to US$5.35 billion.
Novatek's quarterly revenue ranked second with 10.7% growth. Benefiting from the replenishment effect of TV-related component inventory, Novatek's system-on-chip and panel driver IC platform businesses increased by 24% and 2% sequentially, respectively, and its first-quarter revenue increased by 10.7% to US$790 million, maintaining the seventh market share of 2.3%.
Phones are slow to destock
As the "play" of consumer electronics, the smartphone supply chain is still focusing on inventory.
Affected by the low season of smartphone production and the continuous inventory adjustment of power management ICs, MediaTek's mobile phone and power management IC business fell by about 20% and 13% respectively. In contrast, the smart terminal platform business benefited from TV-related inventory replenishment, supporting revenue roughly unchanged from the previous quarter. Although the sequential decline was narrower than the previous quarter, the decline was still larger than that of other manufacturers, with market share shrinking to 9.3% from 10.2% in the previous quarter, and overall first-quarter revenue down 8.8% sequentially to US$3.15 billion.
Revenue dependence on a single customer Apple's Sirui Technology fell more significantly, due to factors such as the fading iPhone new machine dividend in the first quarter and the low sales season, resulting in a sharp decline in revenue of Sirui Technology, which decreased by more than 30% month-on-month, resulting in a decline in the ranking outside the top ten.
Looking forward to the second quarter, Jibang Consulting pointed out that although the dematerialization of IC inventories is slower than expected, it has gradually recovered to a healthier level compared with the period of high inventories in the second half of 2022.
At the same time, some IC design factories are expected to grow in a positive direction under the stimulation of new products. Among them, NVIDIA's operational performance has attracted much attention, based on the generative AI trend such as ChatGPT to accelerate the deployment of related AI chips by global cloud service providers and enterprises, driving rapid revenue growth, it is expected that Nvidia will have the opportunity to sit on the IC design leader in the second quarter, and is expected to drive the world's top ten IC design revenue to turn red from the trough.
Weir maintains the top nine design firms in the world
According to the statistics of Jibang Consulting, the quarterly revenue scale of Weier Semiconductor in the first quarter of this year ranked the ninth largest chip design company in the world, with a month-on-month increase of about 1.3% to achieve 539 million US dollars, second only to NVIDIA and Novatek. In the first quarter of last year, Weier Semiconductor entered the list of the world's top ten chip design companies for the first time, ranking ninth in the world.
However, there are discrepancies between the statistics of Jibang Consulting and the caliber of listed companies. As a leader in A-share chip design, Weier disclosed that its revenue in 2022 exceeded 20 billion yuan, and the company's operating income in the first quarter of this year was 4.335 billion yuan, down nearly 6% from the previous quarter, and its net profit reached nearly 200 million yuan, down 70% from the previous quarter.
Last year, Weier increased its inventory price decline reserves, reaching 1.359 billion yuan; Among them, the provision was 493 million yuan in the first three quarters of last year, and the amount of provision increased significantly in the fourth quarter due to the further decrease in the net realizable value of some products, such as the 64-megapixel image sensor used in mobile phone terminals.
Regarding the reasons for the decline in performance, Wang Song, general manager of Weier Co., Ltd., said at the performance briefing on May 26 that the market scale of the consumer electronics field in 2022 has been strongly impacted, among which smartphones in the fourth quarter of last year hit the largest quarterly decline in history, and the decline in terminal customer shipments also made downstream customers more conservative in terms of stocking strategies and the pace of launching new model solutions, which affected the company's 2022 annual performance.
In response, Weier Co., Ltd. continues to actively promote the introduction of new products and continuously expand the company's market share; In the first quarter of 2023, the company's operating indicators have shown a positive trend month-on-month.
According to reports, Weier has taken active measures to de-inventory, and the current effect of de-inventory of the company is remarkable. As of the first quarter of 2023, the company's inventory decreased to 10.769 billion yuan, a decrease of 12.8% sequentially. With the mass production and delivery of the company's new product solutions in various market segments, the company's inventory scale will be further controlled to achieve the goal of returning inventory to a reasonable range.
In addition, in the field of automotive electronics, Weier image sensor products have been introduced by many domestic and foreign automobile brands, and are applied to ADAS, driver monitoring, panoramic image, rear view and many other scenarios.
Affected by the prosperity of the semiconductor industry, the stock price of Weier shares continued to decline from the third quarter of last year, and the company bought back. As of the end of the first quarter of this year, Weier completed the repurchase of 3.4366 million shares at an average price of 87.37 yuan per share, accounting for 0.29% of the company's total share capital, and the total amount paid was about 300 million yuan.
From the perspective of market performance, since the first quarter of this year, the stock price of Weier shares has continued to rise, rising by nearly 40% to April 10, and the stock price once reached 113.87 yuan / share, reaching the price before the correction in August last year; Then there was a correction, and the rally resumed from the end of April, and the stock price was last closed at 102.88 yuan per share.
In addition, Weier shares "raised a plaque" peer Beijing Junzheng recently announced the end.
In May last year, Weier disclosed that the total investment of the plan did not exceed 4 billion yuan to increase its shareholding in Beijing Junzheng, and the shareholding ratio did not exceed 10.38% of the total share capital.
In terms of actual progress, since the increase in Beijing Junzheng touched the red line on June 9, 2022, Weier shares have remained unchanged, and the total holding of Beijing Junzheng shares as of the first quarter of this year is still 5%, if measured according to the upper limit ratio of the increase plan, this round of transactions is only about half.
On the evening of June 9, Beijing Junzheng announced that it received notice that the validity period of the transaction of Weier shares to increase its shareholding in Beijing Junzheng had expired on June 7, 2023, and the increase transaction had been completed.
Responsible editor: Zhang Qianye
Proofreader: Zhao Yan