IC packaging industry growth

The IC industry was first written into the 2014 government work report, which was elevated to the national strategic height. It is said that the National Industry Investment Fund will invest at least 20 billion yuan in the semiconductor chip field in 2015. As of the press release, more than half of the listed IC companies have released their 2014 annual reports, and the overall revenue and profits have shown a growing trend. Among them, the net profit of packaging and test companies represented by Changjiang Electronics, Tongfu Microelectronics, and Huatian Technology has increased. In the bright spotlight, SMIC and Hua Hong Semiconductor and other listed companies in Hong Kong have continued to make profits as domestic wafer manufacturing giants.

Double-digit growth in package testing

According to statistics from the Semiconductor Industry Association of America, global semiconductor sales exceeded the US$ 335 billion mark for the first time in 2014, and statistics from the National Bureau of Statistics show that last year the domestic integrated circuit industry realized sales value of 291.5 billion yuan, a year-on-year increase of 8.7%, which is higher than that of the previous year. 0.1%. The industrial structure stepped into benign adjustment. In addition to the basic income growth of the design industry, the profitability of key wafer manufacturing enterprises was further optimized, and the packaging and testing industry achieved double-digit growth. According to Gu Wenjun, chief analyst of Semiconductor Research, a core research firm, the packaging industry is more stable than the design industry and it is also an OEM for international companies. Last year, the company continued to expand its production capacity and its earnings growth was significant.

Judging from the performance of IC listed companies that have published annual reports, the overall net profit of IC packaging industry has grown rapidly. Among them, last year's bid for the world's fourth largest semiconductor packaging company Xingke Jinpeng's Changjiang Electronics Technology Co., Ltd. achieved revenue of 6.428 billion yuan in 2014, net profit of 209 million yuan, an increase of 327.73% over the previous year. The net profit attributable to shareholders of listed companies in the first quarter of 2015 is expected to increase 37 times year-on-year.

Changjiang Electronics executives said at a recent performance exchange meeting that the acquisition of Xingke Jinpeng is currently in the anti-monopoly review stage. Through the integration after the acquisition, both parties learn from each other in the field of advanced packaging, and combine strengths and strengths in market development. . In addition, during the reporting period, the company and SMIC established a joint venture company. For the first time, the domestic integrated circuit design company formed the domestic manufacturing process of tapeout, middle package, and subsequent FC inversion, and established the entire industry for the localization of integrated circuits. Chain advanced manufacturing technology support, according to SMIC, the project is expected to put into production in the second half of 2015.

The same choice of the entire industrial chain layout is also the Tongfu Microelectronics. In August 2014, the company announced that it plans to cooperate strategically with Shanghai Huahong Hongli Semiconductor Manufacturing Co., Ltd. and Shanghai Huali Microelectronics Co., Ltd. in chip design, manufacturing, and advanced packaging and testing technologies to shorten the cycle of chip manufacturing and compress the middle Link costs, to achieve one-stop service. Last year, the company's net profit reached 121 million yuan, an increase of nearly double the year-on-year increase.

Hua Tian Technology's net profit last year reached 306 million yuan, with 52.37% net profit growth rate following Changjiang Electronics and Tongfu Microelectronics. During the reporting period, the company’s $40.6 million acquisition of Flip Chip International, a US advanced packaging company, 100% of LLC and its subsidiaries, and another acquisition of a 16.15% stake in Huatian Kunshan, was approved by the shareholders’ meeting in March this year. A planned increase of RMB 2 billion will be used for the expansion of medium and high-end packaging capacity in Tianshui, Xi’an and Kunshan.

Guotai Junan Research reported that the domestic packaging and testing industry has developed early and has a good foundation in the semiconductor industry chain. It is expected to become the first sub-industry to complete import substitution in the industry chain, and with the Internet of Things becoming the core driving force of the semiconductor industry in the next 10 years, the The need for chips to shift from performance-oriented to application-oriented, the industry change under the circumstances of the domestic packaging and testing industry is expected to narrow the gap with the world advanced level.

Manufacturing industry is expected to focus on

In addition to the packaging industry, statistics from the Ministry of Industry and Information Technology show that the IC design industry revenue increased by 19%, the growth rate was basically the same as that of the previous year, the proportion of the entire industry continued to increase, the key enterprises grew rapidly, and the leading chip design leader Spreadtrum completed the integration of DiRuiKe in 2014. After that, the total revenue reached 1.5 billion U.S. dollars. The growth rate of wafer manufacturing industry is lower than that of the design industry, but the profitability of the key enterprises and the ability to receive orders have further improved.

SMIC, the largest wafer fab manufacturer in China, achieved 11 consecutive quarters of profit as of the fourth quarter of last year, with revenue of US$1.97 billion, net profit of US$150 million, and gross profit margin increased to 24.5%, the highest level in nine years. According to Qiu Ciyun, CEO of the company, in the first half of this year, the 28-nanometer process is expected to achieve mass production, and the 14-nanometer and 10-nanometer processes are also accelerating research and development.

As the world’s largest smart card IC foundry, Hua Hong Semiconductor was listed in Hong Kong in October last year. During the reporting period, the company’s sales revenue reached US$665 million and its gross profit margin was 29.8%, all of which hit historical highs.

It is worth noting that manufacturing is the key investment area of ​​the National Integrated Circuit Industry Fund. As a national fund management company, the president of Huaxin Investment Management Corp. recently stated that the National IC Fund will invest 20 billion yuan in the semiconductor chip field in 2015, focusing on investment in chip manufacturing companies. It will also take into account chips such as chip design and packaging testing. Industry chain company. In addition, the state fund is targeted at long-term investors, will be the preferred equity investment, participate in domestic chip industry investment, mergers and acquisitions and integration.

In February, the National Integrated Circuit Industry Fund planned to subscribe SMIC's 4.7 billion new shares at HK$0.66/share, involving a total amount of HK$3.099 billion, becoming one of the major shareholders. In addition, the national integrated circuit industry investment fund also reached an investment intention of 10 billion yuan in the integrated circuit business of Ziguang Group. Last December, the National Integrated Circuit Industry Fund invested 300 million U.S. dollars, jointly with SMIC's affiliate core power Shanghai and Changjiang Electronics to form an investment consortium to assist Changjiang Electronics in the acquisition of Xingke Jinpeng.

Gu Wenjun said that in 2015, apart from continuing to focus on investing in leading enterprises, the national IC will be more involved in such matters as the acquisition of Changjiang Electronics Technology.