China’s largest silicon fab: stock price soars 180% on the first day of listing

On April 20, Shanghai Silicon Industry Group Co., Ltd. (hereinafter referred to as “Shanghai Silicon Industry”) was successfully listed on the Sci-tech Innovation Board of the Shanghai Stock Exchange with the stock code “688126”. 180.46%, with a total market value of 27.1 billion yuan.

Shanghai Silicon Industry is mainly engaged in the research and development, production and sales of semiconductor silicon wafers. It is one of the largest semiconductor silicon wafer manufacturing enterprises in mainland China and the first enterprise in mainland China to achieve large-scale sales of 300mm semiconductor silicon wafers. In one fell swoop, it broke the situation that the localization rate of 300mm semiconductor silicon wafers in my country was almost 0%, and promoted the process of “self-controllable” production technology of key semiconductor materials in my country.

The halo of “China’s largest silicon wafer fab”

According to OFweek Electronic Engineering Network, Shanghai Silicon Industry was established in 2015, and was mainly engaged in the research and development, production and sales of semiconductor silicon wafers at the earliest. In the process of enterprise development, an investment move by Shanghai Silicon Industry allowed it to hold the halo of “China’s largest silicon wafer fab”, that is, to purchase Shanghai Xinyang’s holdings for 482 million yuan. Xinsheng took a 26.37% stake and then directly held a 98.5% stake in Shanghai Xinsheng, becoming the company’s largest shareholder.

According to statistics, Shanghai Xinsheng was established in 2014 and is my country’s leading manufacturer of large-scale silicon materials, ranking 1st in China and 10th in the world. At the same time, it is also the main body of the first 300mm large silicon wafer project in China, and has undertaken the “300mm silicon wafer for 40-28nm integrated circuit manufacturing” project, one of the national 02 special core projects.

The acquisition of Shanghai Xinsheng is only one of the proud capitals of Shanghai Silicon Industry. Earlier, Shanghai Silicon Industry acquired Okmetic, a veteran Finnish giant and the seventh largest silicon wafer manufacturer in the world, in 2016. These products are mainly used in the development and production of MEMS, sensors, analog circuits and discrete semiconductor products, covering smart phones, portable devices, automotive electronic devices, Internet of Things and other fields.

In addition, Shanghai Silicon Industry also acquired Shanghai Xinao Technology, a company led by the Shanghai Institute of Microsystems of the Chinese Academy of Sciences and jointly established by Chinese and foreign investors. Xinao Technology’s official website shows that the company has SIMOX (oxygen injection isolation), Bonding (bonding) and Simbond (Completely self-developed SOI new technology) and Smart-cut four types of SOI wafer manufacturing technology, can provide 4-inch, 5-inch and 6-inch SOI wafers and SOI epitaxial wafers, and can provide 8-inch SOI wafers in batches.

First-quarter performance forecast under the influence of the epidemic

In the prospectus, Shanghai Silicon Industry made a preliminary forecast on the main operating performance in the first quarter of 2020.

Taking into account the impact of the new coronavirus epidemic, the company’s operating income in the first quarter of 2020 ranged from 400.2 million yuan to 442.3 million yuan, with an increase of 48.48% to 64.10 yuan compared with the same period last year. %. The company’s net profit attributable to shareholders of the parent company in the first quarter of 2020 ranged from -47.2 million to -65.2 million, a decrease of 58.4941 million to -65.2 million from the same period last year. 76,494,100 yuan. The company’s net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses in the first quarter of 2020 ranged from -72.5 million to -88.6 million, compared with the same period last year after deducting non-recurring gains and losses attributable to shareholders of the parent company. 28 Profits fell by 52.1064 million yuan to 68.2064 million yuan, and the loss ranged from 255.50% to 334.45%.

Among them, the revenue increased significantly year-on-year, mainly because the operating income of Xinao Technology was combined in the income after the acquisition of Xinao Technology, and the production capacity of the 300mm semiconductor wafer business was climbing, and the impact of the increase in production and sales; while the net profit loss increased year-on-year. The main reason is the decline in the prosperity of the semiconductor industry, which affects the development of the 300mm semiconductor wafer business, coupled with the decline in sales prices, the increase in fixed costs caused by investment in machinery and equipment, maintenance, and indirect labor and energy.

Opportunities and challenges coexist

According to the prospectus released by Shanghai Silicon Industry, through continuous R&D investment, a series of scientific and technological achievements have been formed in new product development, production process improvement, etc., which have played a key role in the company’s continuous improvement of product quality and enrichment of product layout. . In terms of core technologies, Shanghai Silicon Industry has mastered a complete set of core technologies for the production of semiconductor wafers including 300mm semiconductor wafers, including single crystal growth technology, cutting technology, chemical etching technology, grinding technology, polishing technology, cleaning technology , Epitaxy technology, SOI technology and measurement technology.

(From the prospectus of Shanghai Silicon Industry)

However, as far as the entire Chinese market is concerned, my country’s semiconductor self-sufficiency rate is still insufficient. Statistics from China’s customs show that the number of China’s integrated circuit imports has continued to increase in the past five years. In 2019, the number of China’s integrated circuit imports was 445.134 billion, a year-on-year increase of 6.6%; in 2018, China’s integrated circuit imports were 417.567 billion, a year-on-year increase of 10.8%. In terms of import value, China’s integrated circuit import value in 2019 was US$305.55 billion, a year-on-year decrease of 2.1%.

Among them, semiconductor silicon wafer, as the key material for integrated circuit manufacturing, not only has high technical difficulty in research and development, long research and development cycle, but also requires a large amount of capital investment. From the perspective of the global semiconductor wafer market, Japan, Germany, South Korea, Taiwan and other countries and regions occupy the main force, such as Japan’s Shin-Etsu Chemical, Germany’s Siltronic, South Korea’s SK Siltron, France’s Soitec, China’s Taiwan Global Wafer and Hejing Technology, etc. Enterprises occupy the vast majority of the market share.

The stock price soared by 180% on the first day of listing, which is enough to show the love of the capital market for the Shanghai silicon industry. Under the current fierce competition in the semiconductor wafer market, as the sales scale of China’s semiconductor industry continues to expand, the need for localization of semiconductors is becoming more and more urgent. The Shanghai silicon industry’s choice to go public at this time is undoubtedly a “strengthening shot” for the domestic semiconductor industry. It is worth looking forward to how to lead the future trend of the domestic semiconductor industry in the future.

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