① Will Semiconductor's performance in the first half of the year is expected to be good, as downstream demand improves and the market share of high-end products expands, the company's profitability is increasing; ② Looking ahead for the whole year, CIConsulting predicts that CIS's overall revenue will increase by about 12.9% year-on-year, but as domestic high-end CIS production capacity is released, CIS prices will stabilise.
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On July 5th, Caixin reported that Weir Semiconductor (603501.SH), the domestic leader in CIS (image sensor), released its semi-annual performance forecast this afternoon. In the first half of the year, with the company's expected revenue growth of about 30%, net profit is expected to increase by more than 7 times, and non-net profit will turn losses into gains. Xu Jingjing, a senior analyst of semiconductor devices at Sigmaintell, told reporters that supply and demand are the two key words for the CIS industry this year.
Weir Semiconductor expects to achieve operating income of 11.904 billion yuan to 12.184 billion yuan in the first half of this year, a year-on-year increase of 34.38%-37.54%; net profit attributable to mothers is expected to be 1.308 billion yuan to 1.408 billion yuan, a year-on-year increase of 754.11%-819.42%; and non-net profit is expected to be 1.318 billion yuan to 1.418 billion yuan, compared to a loss of 78.9613 million yuan in the same period last year.
For Weir Semiconductor, the recovery of overall industry demand and the expansion of its market share in the high-end CIS field are important reasons for the significant increase in net profit this year.
Since the beginning of this year, CIS has changed its downturn from last year, especially in the first half of last year. The news of price increases and follow-up orders is endless. According to reports, relevant products of Samsung, the world's leading CIS supplier, have increased prices since Q1 this year, with an average increase of up to 25%, and individual products have increased by 30%; domestic wafer manufacturers SMIC and Hua Hong Semiconductor have also successively announced that downstream CIS demand is strong. Influenced by the increasing demand, the CIS industry's profit margin began to rebound. Sigmaintell predicts that the mainstream CIS for smartphones (13M and above) will increase by about 20% in the first half of 2024 compared with the second half of 2023.
In this situation, Weir Semiconductor also stated in its performance forecast that "in the first half of 2024, the market demand will continue to recover, and downstream customer demand will increase." An insider close to Weir Semiconductor disclosed to Caixin reporters in Q1 of this year that downstream demand for Weir is strong and the company is expanding production.
On the other hand, under the trend of domestication, Weir Semiconductor is continuously expanding its market share in the high-end CIS field. Previously, the high-performance CIS market represented by 50 million pixel main cameras was mainly occupied by foreign manufacturers such as Sony and Samsung. However, a person from Weir's securities department told Caixin reporters that the company's 50 million pixel products had been mass-produced last year, and they are the company's high-end positioning products. In this case, many domestic mobile phone manufacturers have adopted CIS products of Howells Technology (a subsidiary of Weir Semiconductor) since the second half of last year. Research reports from Huatai Securities show that the flagship Huawei P70 standard version, which was popular last year, was equipped with Howells Technology's OV50H main sensor.
In addition, Weir Semiconductor also mentioned in its performance forecast that the penetration of the autonomous driving industry will promote the company's profit growth. Xu Jingjing stated that in the short term, the market share of CIS for 360 panoramas and APA's self-parking function in the automotive CIS market is expected to continue to rise. However, as the market gradually matures and technology innovations emerge, and more manufacturers enter the market and launch competing products, intensified market competition leads to price wars and squeezes profit margins, affecting the profitability of related CIS products.
Looking ahead to the whole year, Sigmaintell predicts that thanks to the increase in smartphone sales and product upgrades driving CIS revenue, it is expected to increase by about 12.9% year-on-year in 2024. However, the organization also predicts that in the second half of this year, with the gradual increase in domestic high-end CIS capacity, the trend of CIS prices will stabilize.