China’s chip industry worries and foreign troubles, the revenue and net profit of the two giants have doubled

[January 20, 2023](Comprehensive report by Epoch Times reporter Li Bing) Chinasemiconductorandintegrated circuitThe industry is in the midst of “internal and external troubles”, the twochipThe giants have experienced a double drop in revenue and net profit. In ChinasemiconductorThe industry caused quite a shock.

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radio frequencychipfaucetZhuo ShengweiDouble decline in revenue and net profit

China’s leading RF chip stockZhuo ShengweiOn the evening of January 18, the performance forecast was disclosed. It is expected that the annual revenue in 2022 will drop by 20.59% year-on-year, and the net profit will drop by as much as 57.23% year-on-year.This is China’s leading image sensor companyVail sharesAfter announcing the pre-reduction of performance in 2022, another chip “star stock” experienced a double drop in revenue and net profit.

According to the announcement, Zhuo Shengwei expects its operating income to be 3.68 billion yuan in 2022, a year-on-year decrease of 20.59%; the company’s net profit will be 913 million to 1.126 billion yuan, a year-on-year decrease of 47.26% to 57.23%; billion to 1.117 billion yuan, a year-on-year decrease of 42.38% to 52.39%.

Regarding the reasons for the sharp decline in performance, Zhuo Shengwei said that in 2022, affected by various factors such as the complex and changeable international situation, repeated domestic epidemics, and macroeconomic downturn, the market demand for the mobile phone industry, which is the company’s main downstream application, is weak, resulting in performance being affected. Certainly affected.

“First Finance and Economics” reported that from 2019 to 2021, Zhuo Shengwei has maintained high growth in performance for three consecutive years, and has also become one of the bullish A-share semiconductor stocks. From 2022, the company’s net profit will decline quarter by quarter.

The financial report shows that in the first quarter of 2022, Zhuo Shengwei’s operating income growth rate dropped to 12.43%, and its net profit fell by 6.7% year-on-year and more than 20% month-on-month, which was the first negative growth since 2019. Since then, Zhuosheng Micro’s revenue and net profit have further declined.

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According to the “China Fund News” report, on January 18, Zhuo Shengwei’s latest closing price was 133.34 yuan, with a total market value of 71.2 billion yuan. However, since the high level at the end of June 2021, Zhuoshengwei’s stock price has fallen by 60%, and the risk has been greatly released.

According to the official website, Zhuoshengwei is a company focusing on radio frequencyintegrated circuitA high-tech enterprise in the field of research, development, production and sales, mainly provides RF front-end discrete devices such as RF switches, RF low-noise amplifiers, RF filters, RF power amplifiers, and various module products to the market. At the same time, the company also sells low-cost Power consumption Bluetooth microcontroller chip.

Vail sharesNet profit plunged 80%

Prior to Zhuo Shengwei’s announcement, China’s chip design leader Weil also disclosed a performance forecast.

On the evening of January 13, Weir shares disclosed the 2022 annual performance forecast. The net profit of listed companies for the year was 800 million to 1.2 billion yuan, a decrease of 73.19% to 82.13% compared with the same period last year. The net profit after deducting non-existing expenses was 90 million yuan to 135 million yuan, a year-on-year decrease of 96.63% to 97.75%.

This means that its net profit after deduction of non-returnable parent has fallen to the level of 2018.

Regarding the decline in net profit, Weil shares said that due to the impact of factors such as the global new crown epidemic and the overall downturn in the consumer electronics market, consumer electronics demand represented by smartphones has been strongly impacted, which also has a strong impact on the company’s main business. It has had a greater impact. The shipments of some market segments have declined, and the sales prices of products have been under pressure. The company’s revenue scale and product gross profit margin have both declined compared with last year.

The wealth of the richest man in China’s chip industry has shrunk by 44.7 billion a year

The full name of Weir shares is Shanghai Weir Semiconductor Co., Ltd., which is a leading domestic image sensor company and has a certain market share in the mobile phone CIS market. The automotive CIS and security businesses are also continuing to expand.

Tianyan Check shows that Yu Renrong, chairman of Weil Co., Ltd., holds about 30% of the shares and is the company’s largest shareholder and ultimate beneficiary.

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A few days ago, Aijiwei released the rich list of listed companies in China’s core semiconductors, showing that in 2022, Yu Renrong will continue to top the list with 36.2 billion yuan, and his wealth has shrunk by 44.7 billion yuan from 80.9 billion yuan in 2021.

Prior to this, Weir shares had always been regarded as a white horse stock, and the founder Yu Renrong also ascended the position of the richest man in China’s chip industry through a series of mergers and acquisitions.

“Chip Lord” Snake Tunxiang OmniVision Technology Acquires American Chip Giant

In 2007, Yu Renrong established Weir Co., Ltd. in Shanghai. At first, he was mainly engaged in the distribution of semiconductor products, so Yu Renrong was also known as the “chip dealer”. What really brought Yu Renrong to a new level was that in 2019, Weir completed a snake-like acquisition of OmniVision.

OmniVision, formerly known as Omni Vision, a veteran chip giant in the United States, is one of the top three CIS (Contact Image Sensor) manufacturers in the world. Since 2002, OmniVision has launched the world’s first mobile phone CIS chip, the world’s first 1.3 million and 2 million pixel mobile phone CIS chips, the world’s smallest NSTC CIS chip, the first automotive HDR-SOC sensor, the first security CIS chips and other products.

In 2015, OmniVision was acquired by a Chinese consortium composed of companies under the central Chinese state-owned CITIC Group and other companies. In 2018, when Weir acquired OmniVision Technology, the total assets of the latter were 5 times that of the former, and the net assets were 8 times that of the former.

After the merger was completed, according to Time Weekly, after OmniVision’s financial consolidation in 2019, Weir’s attributable net profit jumped nearly 9 times from 466 million yuan in 2019 to 4.476 billion yuan in 2021. Today, as downstream customers are affected, life for Weir shares is not easy, and Yu Renrong’s wealth has also shrunk severely.

China’s chip industry “internal and external troubles”

The investment community has previously reported that China’s chip semiconductor and integrated circuit industries are currently at a critical moment of “internal and external troubles”. The tide of chips is ebbing, and the winter of domestic chips is coming.

The report quoted a piece of data obtained by Titanium Media App as showing that from January to August 2022, 3,470 chip-related companies in China have been revoked or cancelled, exceeding the number of companies in previous years.

In recent years, the CCP authorities have allocated more than US$100 billion to create a “de-beautified” domestic chip industry chain. But little has been achieved so far, instead leading to high-profile corruption investigations.

In addition, the CCP has invested heavily in the implementation of extreme anti-epidemic policies in the past three years, and many officials believe that it is difficult to pool large amounts of funds to invest in the chip industry now. Instead, officials are asking Chinese semiconductor material suppliers to cut prices to support domestic customers.

U.S. joins forces with allies to impose semiconductor export controls on China

In 2022, the U.S. government has adopted a number of export control measures to prevent the CCP from advancing chip development, and there are early signs of success.

In October of the same year, the U.S. government announced the largest chip export control ban on the CCP so far. Unless the government permits, it is not allowed to export to China advanced chips and process equipment below 14 nanometers, AI and supercomputing chips, and NAND above 128 layers flash memory, etc.

In addition, American technical personnel are prohibited from developing and producing advanced chips in China. As far as the impact is concerned, senior executives who originally worked in Chinese companies such as SMIC and Yangtze River Storage have resigned. After the relevant ban was put on the road, China’s semiconductor manufacturing equipment purchases in November fell by more than 40% year-on-year, hitting the lowest level in more than two years.

Recently, the United States has successfully persuaded Japan and the Netherlands to jointly impose semiconductor export controls on the CCP. Bloomberg believes that the United States, Japan, and the Netherlands are expected to completely block the CCP’s ability to purchase the equipment needed to manufacture advanced chips.

Responsible editor: Gao Jing#