Semiconductors continue to destock, the market segment recovers, and domestic semiconductor silicon wafers expand against the trend

As a key material in the semiconductor industry chain, silicon wafers have fallen in price due to the downward trend of the industry cycle, and the performance of domestic semiconductor silicon wafer listed companies was dragged down last year, consumer electronics and other markets have shown certain signs of recovery, and breakthroughs have been made in the field of RF chips; On the other hand, relevant listed companies have generally increased R&D investment, expanded production capacity against the trend, and are optimistic about the opportunities brought by the rapid development of new energy vehicles, big data and artificial intelligence industries.

Falling silicon prices weighed on performance

As a representative of large domestic semiconductor wafers, the operating income of the Shanghai silicon industry fell by about 11% to 3.19 billion yuan last year, and the net profit attributable to the parent company was 187 million yuan, a year-on-year decrease of about 40 percent, and the net profit attributable to the parent company in the first quarter of this year turned into a loss of nearly 200 million yuan.

At the recent Shanghai silicon industry performance briefing, Qiu Ciyun, director and president of the company, said that the decline in the company's gross profit was mainly due to the increase in depreciation and the pressure of price reduction caused by insufficient market demand. Last year, the company's semiconductor wafer revenue decreased mainly due to the revenue of 200mm and below semiconductor silicon wafers decreased by 200 million yuan, and the revenue of entrusted processing services and 300mm semiconductor silicon wafers decreased by about 100 million yuan each.

According to the executives of the Shanghai silicon industry in a recent institutional survey, the Shanghai silicon industry has taken the initiative to strengthen the supply of storage customers, and the sales volume continues to increase, and the price adjustment will also match the adjustment of the quantity, and there is more demand in the field of logic chips; In addition, SOI silicon wafers (silicon on the insulating bottom) are directly related to the mobile phone consumer market, and there will be a replenishment process after the inventory is depleted, but the overall market situation remains to be seen.

In addition, the domestic semiconductor silicon wafer peer Lion Micro last year attributable net profit of 65.7525 million yuan, a year-on-year decrease of about ninety, in the first quarter of this year, the company's operating income increased by about 7% year-on-year, but the net profit loss attributable to the parent company was 63.1514 million yuan. According to reports, in the first quarter, the semiconductor industry market began to recover, Lion micro sales orders increased, and the sales volume of main products increased significantly, but due to the low sales unit price, and the corresponding fixed costs of the conversion of new production lines last year increased more than the same period last year, resulting in a large decline in comprehensive gross profit margin and an increase in inventory impairment, which dragged down the performance.

Under the influence of factors such as the slowdown in terminal demand such as consumer electronics and inventory adjustments, global wafer shipments and revenue will both decrease in 2023. According to the report of the International Semiconductor Industry Association (SEMI), global silicon wafer shipments fell to 12.602 billion square inches last year, a year-on-year decrease of 14.3%; Global wafer revenue declined due to lower shipments, reaching $12.3 billion, down 10.9% year-on-year.

RF chips have made breakthroughs

In general, the larger the wafer size, the more chips can be manufactured on a single wafer, and the cost per chip decreases. Judging from the performance of listed companies, the demand for large-size silicon wafers is relatively stable, and it is the first to show signs of recovery.

"At present, the market situation has been observed to be stable, especially in the 12-inch (300mm semiconductor wafer) products, there are signs of recovery; The recovery of 8-inch (300mm semiconductor silicon wafer) products needs to be further observed. Overall, customers are still in the process of digesting inventory. Qiu Ciyun pointed out.

According to the annual report, the production and sales of semiconductor silicon wafers (including SOI silicon wafers) of 200mm and below in Shanghai's silicon industry fell by more than 20% due to the impact of the market last year; The sales volume of 300mm semiconductor silicon wafers was less affected by the market, only falling by about 3.48%, and the related inventory increased by more than 3 times year-on-year last year due to the company's increased production and stocking strategy.

In the first quarter of this year, Leon Micro silicon wafer business is gradually recovering, and the sales of large-size silicon wafers have recovered more significantly, among which the company's sales of 6-inch silicon wafers were 3.1118 million pieces, a year-on-year increase of 45.47%, and the sales volume of 12-inch silicon wafers was 171,400 pieces, a year-on-year increase of 71.62%. At present, Leon Micro's 12-inch products have covered the logic circuits and memory circuits of technology nodes above 14nm.

In addition, RF chips have become an important force for listed companies.

According to reports, Xinao Technology, a subsidiary of Shanghai Silicon Industry, continues to promote the R&D pilot project of 300mm high-end silicon-based materials to better meet the market and customer needs of RF and other application fields, and has built a 300mm high-end silicon-based material test line of about 60,000 pieces/year.

Last year, the operating income of the business increased by nearly 1.71 times year-on-year to 137 million yuan, with a sales volume of 17,900 pieces, an increase of 1.41 times over the same period last year, a new high, and the sales volume reached 9,000 pieces in the first quarter of this year, a year-on-year increase of nearly four times.

Leon Micro executives told the reporter of E Company that the company's compound RF chip products have benefited from a complete breakthrough in product technology, customer verification has been smooth, and the progress of RF chip verification has basically covered domestic mainstream mobile phone chip design customers, and domestic substitution has accelerated; Multi-specification, small-batch, multi-purpose, and high-value-added special-purpose products continue to increase in volume, and low-orbit satellite customers have passed the verification and started to ship in large quantities.

Production capacity expanded against the trend

Despite the decline in wafer prices, relevant listed companies have increased R&D investment and maintained the pace of capacity expansion. Last year, the R&D expenditure of the Shanghai silicon industry was 222 million yuan, accounting for 6.96% of the operating income, and further increased R&D investment in the first quarter of this year.

Qiu Ciyun introduced that as of the end of last year, in terms of 300mm, Shanghai Xinsheng, a subsidiary of Shanghai silicon industry, is implementing a new 300,000 pieces/month 300mm semiconductor silicon wafer production capacity construction project, achieving 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, and the production capacity is expected to reach 600,000 pieces/month in 2024; Subsidiary Okmetic's 200mm semiconductor specialty wafer expansion project in Vantaa, Finland is on schedule.

In addition to the existing production line, it was announced on December 30 last year that Shanghai Xinsheng, a subsidiary of Shanghai silicon industry, has signed a cooperation agreement with the Taiyuan Municipal People's Government and the Management Committee of Taiyuan Zhongbei High-tech Industrial Development Zone, planning to jointly invest in the construction of "300mm semiconductor silicon wafer pulling and cutting and polishing production base" in Taiyuan, with a planned total investment of 9.1 billion yuan in Taiyuan production base, and is expected to complete the construction of the pilot line in 2024 to further expand product categories and enrich product portfolio.

Shanghai silicon industry executives pointed out that due to the semiconductor industry in the context of cyclical adjustment, the company's operating performance last year was affected to a certain extent, but in the long run, driven by the rapid development of new energy vehicles, big data and artificial intelligence and other industries, the semiconductor industry is still positive in the long term. The company will continue to improve its internal strength, further accelerate the construction of production capacity in various business segments, adhere to technology research and development, new product development, and actively seek interactive cooperation between the upstream and downstream of the industrial chain, enrich its own products, and meet the diversified needs of customers.

Leon Micro spent 279 million yuan on R&D last year, accounting for 10.38% of operating income, and is promoting the expansion and construction of various production bases.

Last year, Jiaxing Jinruihong, a subsidiary of Lion Micro, became the "blood loss point" of the company's performance, but the expansion project of 12-inch silicon polishing wafers in Jiaxing base is progressing as planned, and it is expected to reach a production capacity of 150,000 pieces/month by the end of 2024. In addition, the Quzhou base has an annual output of 1.8 million pieces of 12-inch silicon epitaxial wafer project, which is under construction; The Haining base has completed civil works for the production line project with an annual output of 360,000 pieces of 6-inch microwave RF chips and devices, and is expected to complete the production capacity of 60,000 pieces per year and put into commercial operation in the fourth quarter of 2024.