On the evening of April 12, Shanghai Silicon Industry released its 2023 annual report.
扣非净利润下滑243.99%
In 2023, affected by the overall economic environment and the downward cycle of the semiconductor market, the operating income of the Shanghai silicon industry will decline by 11.39% compared with 2022.
Figure: From the 2023 Shanghai Silicon Industry Annual Report
In 2023, the non-net profit of the Shanghai silicon industry will be -166 million yuan, a year-on-year decrease of 42.61%, turning profits into losses. The company's operating income has shrunk, and the profitability of its main business is not strong.
In 2023, the investment income of Shanghai's silicon industry will be 142 million yuan, a significant improvement from -55.58 million yuan in 2022. Non-operating income was 352 million yuan, a year-on-year increase of about two-thirds, and the growth of non-operating income made up for the decline in the company's net profit to a certain extent. The net profit in 2023 will be 186.54 million yuan, a year-on-year decrease of 42.61%. Although the net profit has declined year-on-year, it is gratifying that it will be profitable in 2023.
Due to the inevitable large upfront investment and fixed costs in the process of expanding the Shanghai silicon industry, the continuous large investment in R&D expenses, and the general decline in product gross profit margin last year, the performance indicators in 2023 will decline compared with 2022.
From 2021 to 2023, the Shanghai silicon industry has always adhered to the improvement of production capacity, with total assets increasing from 16.257 billion yuan at the end of 2021 to 29.032 billion yuan at the end of 2023, an increase of 78.58%, and net assets attributable to shareholders of listed companies have also maintained growth, from 10.422 billion yuan at the end of 2021 to 15.114 billion yuan at the end of 2023, an increase of 45.02%.
Figure: From the 2023 Shanghai Silicon Industry Annual Report
The decrease in semiconductor wafer revenue was mainly due to the decrease of 200 million yuan in revenue of 200mm and below semiconductor wafers, and the significant decline in sales of 200mm and below semiconductor wafers and entrusted processing services, so the high proportion of fixed costs would have a more significant impact on the gross profit of these two types of products, down 9.22%. Revenue from commissioned processing services and revenue from 300mm semiconductor silicon wafers each decreased by about 100 million yuan.
R&D accounted for 6.96%
In the case of poor performance in 2023, the Shanghai silicon industry still maintains high R&D. The R&D expenditure of the Shanghai silicon industry was 222 million yuan, and the total R&D investment accounted for 6.96% of the operating income, and the R&D expenditure in the same period of 2022 was 211 million yuan, and the total R&D investment accounted for 5.87% of the operating income.
The total R&D investment in 2023 is higher than that in 2022, mainly due to the fact that in addition to maintaining high investment in the field of 300mm large silicon wafers, it has also increased R&D investment in SOI, epitaxy and other categories of products in response to the current market application needs of new energy vehicles, radio frequency, silicon photonics, filters and other markets.
Figure: From the 2023 Shanghai Silicon Industry Annual Report
In 2023, Shanghai Silicon Industry and its holding subsidiaries have obtained a total of 832 authorized patents (including 606 invention patents), forming a core intellectual property system represented by single crystal growth, polishing, epitaxial growth, SOI technology, pollution control, surface smoothing, defect control, heat treatment system and characterization system.
In 2023, the total number of technical R&D personnel in the Shanghai silicon industry will reach 672, covering many disciplines such as electronics, materials, physics, chemistry, and machinery, with strong independent R&D and innovation capabilities.
The inventory of 300mm semiconductor silicon wafers increased by 322.97% year-on-year
As a high-end manufacturing industry, as of December 31, 2023, the total inventory of Shanghai's silicon industry was 1.553 billion yuan, and the amount of inventory price decline provision was 104 million yuan, accounting for 6.67%.
Figure: From the 2023 Shanghai Silicon Industry Annual Report
Inventories are mainly divided into raw materials, work-in-progress, and inventory goods. Raw materials and goods in stock account for a large proportion of inventory. Raw materials account for about half of the inventory, and in the face of revenue expansion, it is a wise choice for the Shanghai silicon industry to actively stock up, which can alleviate the negative impact of rising raw material prices in the future to a certain extent.
In 2023, the production volume of the Shanghai silicon industry will exceed the sales volume, resulting in a year-on-year increase in inventory, especially the inventory of 300mm semiconductor silicon wafers, which will increase by 322.97% over the previous year. As a high-tech company, the overstocking of product inventory is not good news. It may incur a loss on inventory decline, which will adversely affect the company's operating results.
Figure: From the 2023 Shanghai Silicon Industry Annual Report
The net cash flow from operating activities in 2023 will be -275 million yuan, a decrease of 159.88% from the same period of last year, mainly due to the decrease in the company's operating income and operating profit, and the company's large inventory increase during the reporting period.
Domestic substitution of key tracks
Compared with developed countries and regions, Chinese mainland is still in a relatively weak position in the division of labor in the semiconductor industry chain
The materials and equipment industry will be the focus of future growth. Chinese mainland is the world's largest consumer market for semiconductor end products, driving the semiconductor industry to accelerate the transfer to Chinese mainland, and the scale of China's semiconductor industry continues to expand. With the continuous transfer of international production capacity to China, the demand for semiconductor silicon wafers in Chinese mainland will continue to grow
The semiconductor wafer industry is an oligopoly industry, which has long been monopolized by the world's top five silicon wafer manufacturers, including Japan's Shin
Viet Chemical and SUMCO, Taiwan Global Wafers, Germany Siltronic and South Korea's SKSiltron together account for nearly 90% of the market share.
Since 2016, a number of semiconductor wafer manufacturers have emerged in China, and there are currently more than 10 200mm and 300mm semiconductor wafer projects in China. However, compared with the international market, the domestic silicon wafer industry generally presents a pattern of low technical level, small industrial scale, and scattered product layout, and the overall competitiveness is insufficient. Throughout the development process of the global semiconductor wafer industry, based on the characteristics of technology-intensive, asset-intensive and talent-intensive industries, the integration of advantageous resources is a major development trend, and some semiconductor wafer construction projects that started late may face more severe challenges in the fierce market competition and complex geopolitical environment.
As one of the largest, most comprehensive and most internationalized semiconductor wafer enterprises in China, Shanghai Silicon Industry regards expanding production scale, enriching product structure and increasing market share as an important strategic task for the company's business development. At present, the company's product types cover 300mm polished wafers and epitaxial wafers, 200mm and below polished wafers and epitaxial wafers, SOI silicon wafers, piezoelectric film substrate materials, etc.
The new production capacity of 300,000 pieces/month of 300,000 pieces of 300mm semiconductor silicon wafers is being implemented by Shanghai Xinsheng, a subsidiary of Shanghai Xinsheng, has achieved an additional production capacity of 150,000 pieces/month, and the company's total production capacity of 300mm semiconductor silicon wafers has reached 450,000 pieces/month, which is expected to be produced in 2024
It can reach 600,000 pieces/month, the total production capacity of the subsidiary Xinao Technology and Okmetic 200mm and below polished wafers and epitaxial wafers exceeds 500,000 pieces/month, and the total production capacity of subsidiaries Xinao Technology and Okmetic 200mm and below SOI wafers exceeds 65,000 pieces/month.
Shanghai Silicon Industry now has many well-known customers at home and abroad, including TSMC, UMC, GLOBALFOUNDRIES, STMicroelectronics, Towerjazz and other international chip manufacturers, as well as SMIC, Huahong Hongli, Huali Microelectronics, China Resources Microelectronics and other major domestic chip manufacturing enterprises, customers in North America, Europe, China, other countries or regions in Asia.