Better performance, increase production capacity
The industries in which 5G, new energy vehicles, artificial intelligence, and Internet of Things are rushing into the current industry are all affecting another popular industry, ICs. “Made in China 2025” pointed out that the current global manufacturing landscape is facing major adjustments, and a new generation of information technology The deep integration with the manufacturing industry is triggering profound industrial changes. In these emerging high-tech industries, the core is also inseparable. It is a small chip.
Hua Hong Semiconductor is the world’s leading 200mm pure-play foundry factory. Its sales revenue is mostly from the direct sales of semiconductor wafers, and the largest market is to China. In 2017, the company’s sales revenue reached 808.1 million US dollars, which was higher than 2016 12%, of which 97.8% of sales revenue comes from the sale of semiconductor wafers. The company said that the performance of the top ten pure wafer foundry industry with the best in the company, outstanding performance is due to the consumer electronics, industrial-grade automotive applications The growing demand of the market and the continuous optimization of the product structure of the overall differentiated technology platform.
Even with seasonal factors and annual maintenance of the two factories, sales revenue in the first quarter reached 210.1 million U.S. dollars, up 14.7% year-on-year; profit during the period was 40.231 million U.S. dollars, an increase of 18.1% year-on-year; gross profit margin remained at 32.1% , Net profit margin is approximately 19.1%. According to the company's management guidelines, sales revenue is expected to increase by 5%-7% in the second quarter, and gross margin will be above 32%.
In 2017, the monthly production capacity of Hua Hong Semiconductor wafers reached 168,000 units, and the capacity utilization rate reached a high of 98.1%. In the recently published 2018 Q1 report, Hua Hong Semiconductor’s capacity utilization rate remained at 97.3%. The ring is still better than the previous year.
Policy support, future can be expected
In the continuous trade frictions between China and the United States in recent days, the ZTE incident has also affected countless people. These things are all fraught with fragile nerves. Semiconductors, chips, and other core types of independent innovation have also become the focus of technological innovation. In March 30th, four ministries informed the support of 'China's core' to reduce the income tax on IC companies, which also confirms this. All this is conducive to the development of semiconductor companies, and Hua Hong Semiconductor bears the brunt of it.
From: People's Daily
On June 22, People's Daily published an article saying: 'Some people think that compared to decades and decades ago, China has achieved tremendous progress in both scientific and technological strength and innovation ability, and can rely on its own strength. This is also one-sided. For China's scientific and technological development level, we cannot afford to be self-sufficient or self-respecting. We should promote independent innovation at a higher starting point, seize technological competition and the commanding heights of future development, and change some as soon as possible. The key core technologies are subject to the situation of people. 'It can be seen that the state has a clear understanding of high-tech industries such as semiconductors and chips, and the support efforts are increasing.
At the beginning of 2018, Hua Hong Semiconductor obtained a 400 million U.S. dollar investment from the National Semiconductor Industrial Complex Investment Fund, which was previously eroded by the controlling shareholder Shanghai Lianhe Holdings. For the use of funds, the company has stated that it will strive to increase investment to expand production capacity. Currently, Hua Hong Semiconductor has three 200mm wafer fabs (Huahong No.1 Plant, No.2 Plant, and No.3 Plant) in Jinqiao and Zhangjiang, Shanghai. The monthly production capacity is about 170,000 pieces. Benefit from cloud computing, Internet of Things, Big Data, AI , 5G telecommunications, Bitcoin and other major areas of rapid development, the semiconductor and chip market demand increases. Hua Hong Semiconductor's production capacity is increasing, the market is still showing signs of shortage out of supply. Insufficient supply but the demand increase, As a result, the price of silicon wafers has been pushed up, and the profitability of Hua Hong Semiconductor with a high utilization rate is unquestionable.
At the same time, Hua Hong Semiconductor is constructing a 300-mm integrated circuit production line (Hua Hong No.7 Plant) with a production capacity of 40,000 pieces a month in the Wuxi Hi-tech Industrial Development Zone. Everbright Overseas Research Report shows that the 12-inch Wuxi plant is expected to be put into production by the end of 2019. Initial production capacity It is 10K, then increased by 10K year by year. It is expected that the planned capacity will reach 40K by the end of 2022. The new 12-inch plant plans to prioritize the production of the company's existing eNVM and other superior products. This will not only ensure the continuation of existing product advantages, but also promote the rapid increase in capacity utilization of the new plant. , In order to ease the performance pressure brought by the initial production.
Undoubtedly, high-quality products + optimized structure + increased production capacity + market demand + policy support, it is difficult to create Hua Hong Semiconductor this big wave of rise.
Hua Hong Semiconductor fell in early trading today and then quickly recovered. It closed at HK$27.25, an increase of 3.81%, and rose for three consecutive days.
■ Author | Zhu Yidan