Situation of domestic semiconductors in the second half of the year: large funds will increase the volume and price of semiconductor companies

In 2021, the semiconductor industry continued to be affected by the core shortage crisis. In the first half of the year, the industry actively hoarded goods, and the supply was in short supply. In the second half of the year, the economy rose, and the market demand continued to rise. As the wind vane of China's investment, in the second half of the year, the national integrated circuit industry investment fund phase II (hereinafter referred to as "big fund phase II") invested in 9 semiconductor projects, with a cumulative investment amount of more than 6.5 billion yuan.
At the same time, the head wafer factory has raised the price of products in 2022, domestic and foreign semiconductor companies have expanded their production, and the semiconductor industry has ushered in the situation of both volume and price rise. In addition, the chip shortage crisis also forced China's semiconductor industry to become stronger, and the domestic substitution trend has increased significantly.
Acceleration of phase II investment of large funds: 9 projects in 5 months
On November 12, SMIC International announced in the Hong Kong stock exchange that SMIC holdings, national integrated circuit Fund II and hailinwei entered into a port joint venture agreement to jointly establish a port joint venture. The registered capital of the Lingang joint venture is US $5.5 billion. SMIC holdings, national integrated circuit Fund II and hailinwei agreed to contribute US $3.655 billion, US $922 million and US $923 million respectively, accounting for 66.45%, 16.77% and 16.78% of the registered capital of the Lingang joint venture respectively. The announcement shows that the business scope of the port joint venture includes the production of 12 inch integrated circuit wafers and integrated circuit packaging series; Technical test; Integrated circuit related technology development, technical services and design services; Sell self-produced products.
On November 5, Huatian technology disclosed the fixed increase results. The company raised 5.1 billion yuan at the price of 10.98 yuan / share, and the large fund phase II was allocated 1.13 billion yuan. Huatian technology said that the fixed increase fund-raising is intended to be used for the expansion project of integrated circuit multi chip packaging, the expansion project of high-density system level integrated circuit packaging and testing, the industrialization project of TSV and FC integrated circuit packaging and testing, the industrialization project of storage and RF integrated circuit packaging and testing, and supplement working capital.
On November 3, northern Huachuang disclosed that it raised an additional 8.5 billion yuan at the price of 304 yuan / share, and the large fund phase II was allocated 4.9342 million shares, with an amount of about 1.5 billion yuan. The raised funds are mainly used for semiconductor equipment industrialization base expansion project (phase IV), high-end semiconductor equipment R & D project, high-precision electronic component industrialization base expansion project (phase III), etc.
Since the second half of the year, the second phase of large fund has accelerated the pace of investment. According to the public information statistics of global semiconductor observation, since July, the large fund has invested in 9 semiconductor projects in phase II, involving companies such as Lingang joint venture, Zhongwei company, NANDA optoelectronics, Baiwei storage, Zhichun technology, rising software, North Huachuang, Huatian technology and gekewei. In the first half of the year, only one investment was made in phase II of the large fund, that is, it invested 1.65 billion yuan to jointly establish Runxi Microelectronics (Chongqing) Co., Ltd. with a subsidiary of China Resources micro.
It can be seen from the investment direction and strength of the second phase of the large fund that the investment of the large fund in the semiconductor industry has accelerated, and the investment segmentation has changed from focusing on IC manufacturing to focusing on upstream industries such as domestic equipment and materials. Its large fixed increase in Huatian technology and North Huachuang shows the large fund's optimism and confidence in the long-term prosperity of the semiconductor industry, and it is also a boost to the domestic replacement.
The situation of simultaneous rise in volume and price in the semiconductor industry appears
Affected by the shortage of chips, the world's leading wafer foundries were fully loaded in 2021. TSMC achieved a net profit of NT $156.26 billion in the third quarter of this year, a year-on-year increase of 13.8% and a month on month increase of 16.3%, and its profitability continued to improve. In addition, the head wafer factory has raised the price of its products in 2022, and the global semiconductor companies have expanded their production and made a long-term mass production plan. The semiconductor industry has ushered in a situation of simultaneous increase in volume and price.
According to the third quarter report released by SMIC international, a leading foundry company, in November, SMIC's sales revenue was 9.281 billion yuan, an increase of 21.5% over the same period last year. SMIC said that in combination with the company's performance in the first three quarters and the guidance in the fourth quarter, the annual sales revenue growth target of SMIC was further raised to about 39%, and the gross profit margin target was maintained at about 30%. Recently, SMIC announced that it is increasing chip production and expanding production.
Recently, SMIC plans to build a 12 inch wafer foundry production line with a capacity of 100000 pieces / month, focusing on wafer factories that provide technology nodes of 28nm and above. In addition, SMIC Shenzhen will carry out the development and operation of the project, focus on the production of integrated circuits of 28nm and above and provide technical services, aiming to achieve the final production capacity of about 40000 12 inch wafers per month. It is expected to start production in 2022.
At the same time, many A-share companies such as Beijing Junzheng, Huatian technology, North Huachuang, Leon micro, Shilan micro, Zhichun technology and Jiangfeng electronics also have plans to expand production capacity.
Overall, China's semiconductor industry has ushered in an opportunity window period brought by its own growth in the chip shortage crisis. The industry believes that the chip shortage environment brings more trial and error opportunities to domestic companies with verified products and supply capacity. Domestic wafer factories represented by SMIC are expanding their production, and more domestic semiconductor equipment and materials are accelerating to pass the verification of wafer factories and quickly obtain market orders. Therefore, the domestic semiconductor industry is expected to achieve rapid performance growth in the next 3 to 5 years.
It is worth mentioning that since this year, many manufacturers have made breakthroughs from 0 to 1. Among them, core semiconductor is building four 12 inch recycled wafer production lines with a total monthly production capacity of 400000 wafers, and the first production line was built in June this year, which is planned to reach a monthly production capacity of 100000 wafers in the first half of next year; Fuluode completed the construction of a 12 inch recycled wafer plant in October 2020, with an annual production capacity of 1.8 million chips. And pure technology as the head supplier of semiconductor cleaning equipment in Chinese mainland has established a 12 inch recycled wafer production line with a monthly capacity of 140 thousand. It is reported that the company began to produce 12 inch recycled chips in July 2021, and the initial capacity has been fully booked.
summary
Overall, the replacement progress of China's semiconductor localization is accelerating. This year, the semiconductor industry is facing great opportunities and challenges. While the major generation factories are expanding their production, China's semiconductor industry will enter a period of rapid development.

Commax-Tech Electronic Co., Ltd      Electronic component specialist

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Keyword：Chip shortage crisis   Semiconductor   National Integrated Circuit Industry Investment Fund   SMIC   Haline Micro   Semiconductor industry volume and price are rising   Commax-Tech Electronic