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2019

05/09

China Semiconductor Current Situation Inventory, Sealing and Testing Facing Deposit Pressure

In the first quarter of this year, the revenue of China's semiconductor listed companies has been fully announced. Semiconductor materials and equipment have developed well in the industry. IC design can focus on optical fingerprint identification continuously, while the sealing industry has greater pressure to de-stock.

IC design


Most of China's 11 major IC design companies (Huiding Technology, Quanzhi Technology, Zhaoyi Innovation, Fuhanwei, Zhongying Electronics, Dongsoft Carrier, Ziguang Guowei, Shengbang Stock, Fuman Electronics, Beijing Junzheng and Weier Stock) were hit by the decline in demand in the first quarter of this year, which brought the annual revenue rate down to 18%, amounting to 4.087 billion yuan.

However, the rapid growth of optical fingerprint identification and special IC sub-industries is the highlight of China's IC design industry in the first quarter of this year, which is represented by Huiding Technology and Ziguang Guowei.

In terms of profit, the fluctuation is large. In the first quarter of this year, the net profit of China's major IC design factories was 636 million yuan, 103.63% annually.

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However, it is worth noting that the profit contribution mainly comes from Huiding Technology. Excluding the technology at the top, the change in profits turned into a recession of 24.23%.

Sealing test


In the first quarter of this year, China's sealing industry was affected by the downturn cycle, not only by revenue and profits continuing the trend of recession in the fourth quarter of last year. Gross margin is also declining because of the intensification of competition between middle and low-level product lines and the relatively low utilization rate of high-level packaging capacity.


In terms of revenue, in the first quarter of this year, the total revenue of China's four major sealing and measuring plants (Changdian Science and Technology, Tongfu Micropower, Huatian Science and Technology, Jingfang Science and Technology) amounted to 8 billion yuan, an annual decrease of 13%, and the net profit was - 0.76 billion yuan, an annual decrease of - 150%.


From the inventory point of view, the situation of China's sealing and measuring industry is not optimistic, and the turnover days of the four sealing and measuring plants are rising. Tianfeng Securities estimates that the semiconductor industry has weakened, so inventory may need 1 to 2 quarters to digest.

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equipment


Five listed semiconductor equipment factories in China (Huachuang, Changchuan Science and Technology, Jingsheng Machinery and Electricity, Precision Measurement Electronics, and Pure Science and Technology) had revenue of 1.9 billion yuan in the first quarter of this year, exceeding 30% annually, while their profits were 240 million yuan, 13% annually, and their gross profit remained relatively stable.

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At this stage, the 8 inch products of China Semiconductor Equipment Factory have become a stable source of income, leading manufacturers such as North China Huachuang and other devices have gradually replaced foreign products. This is good news for China's semiconductor equipment industry, but the medium and high-level equipment is still the world's largest international manufacturers, this part has a long way to go to outstanding performance.


Material Science


In the first quarter of this year, the revenue of five major semiconductor materials enterprises in China (Nanda Optoelectronics, Shanghai Xinyang, Jianghua Micro, Jacques Technology and Jiangfeng Electronics) amounted to 888 million yuan, with an annual growth rate of 27% and an annual growth rate of over 20% for four consecutive quarters. They are relatively optimistic industries in the whole semiconductor industry in China.


The profit of RMB 0.82.3 billion yuan, 25% annually, and the gross industrial interest rate is 34%. The gross industrial interest rate fluctuates between 32% and 37% in the last three years.

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Driven by rising memory prices, semiconductor materials have entered a stable recovery stage. However, the price of semiconductor materials such as upstream silicon wafers has risen because the downstream 8 inch products are in short supply.


Future outlook


Because of the gradual formation of semiconductor settlements in China, IC design will be able to stimulate the upstream IC design to continue to appear the trend of China. With the increase of 5G applications, more new scientific and technological thinking can be created, and the prospects of enterprises involved in mainstream IC products are better.


With the warming of supply chain demand and the completion of inventory digestion, there is an opportunity for seasonal recovery in the second half of the year.

In view of the high threshold of equipment manufacturing and the demand of investment scale, it is difficult for other small factories in China to enter the competition. Therefore, in the short and medium term, there will be no price competition in China's semiconductor equipment industry and no major changes in the industrial order.

With the rapid development of semiconductor materials in the second and third generations, the demand for upstream materials has been stimulated and the prospects for the industry are optimistic.