In the first half of 2024, the global semiconductor market as a whole showed some improvement, but the recovery was slower than expected, and the overall global silicon wafer shipments still showed a year-on-year decline. National Silicon Industry Group director and president Qiu Ciyun stated that both client-side and internal inventory digestion are ongoing.
In the first half of this year, affected by industry downturn, the business and net income of National Silicon Industry Group both decreased.
During the reporting period, the gross margin of National Silicon Industry Group was -10.91%, a decrease of 31.67 percentage points year-on-year; the net margin was -29.32%, a decrease of 40.61 percentage points compared to the same period last year.
"Is there any improvement in the company's gross margin at present?" A question was raised to National Silicon Industry Group by an investor during today's (September 27) 2024 interim earnings conference.
In response, National Silicon Industry Group's financial officer, Huang Yan, stated that the recent decline in gross margin was mainly due to a decrease in ASP. With downstream customers continuing destocking and the semiconductor market gradually recovering, prices are expected to gradually rise, leading to an improvement in gross margin.
Regarding specific measures to increase gross margin, Huang Yan further expressed that it is most important to continuously increase ASP. She believes that as the industry sentiment recovers, prices will also adjust. At the same time, the company will continue to increase research and development efforts, introduce more high value-added new products and new processes.
Regarding the demand situation in the wafer market, National Silicon Industry Group's director and president Qiu Ciyun stated that the current situation of the company is in line with the global trend. With signs of recovery in the 12-inch market and the continuous improvement of the company's capacity, the capacity utilization rate is relatively high, and shipments have also increased year-on-year. However, medium and small-sized products have not fully recovered yet, and the recovery of capacity utilization and shipments still needs to wait.
National Silicon Industry Group belongs to the upstream of the semiconductor/integrated circuit industry chain, mainly engaged in the research, production, and sales of semiconductor wafers and other materials. Currently, in the global semiconductor wafer market, domestic manufacturers have a relatively low market share, with the top five wafer manufacturers, Shin-Etsu Chemical, SUMCO, GlobalWafers, Siltronic, and SK Siltron, accounting for 90% of the market share.
When discussing the gap in large silicon wafer technology with the five major silicon wafer manufacturers mentioned above, Qiu Ciyun stated that the National Silicon Industry Group can currently meet most of the customers' product demands, and the main gap with the aforementioned manufacturers lies in the accumulation of production experience and customer resources.
In the first half of 2024, the global semiconductor market overall showed some improvement, but the recovery was slower than expected, and the global silicon wafer shipment volume still showed a year-on-year decline trend. Among them, the global shipment volume of 300mm silicon wafers began to rise from the second quarter, but the demand for 200mm and below size wafers remains low.
During the earnings conference, an investor asked the National Silicon Industry Group: "Has the downstream customers' inventory digestion of your company already ended?"
Qiu Ciyun responded that currently both the client-side and the company's own inventory digestion are ongoing.
The Star Market Daily reporter noted that against the background of downstream customer inventory adjustments and the decline in silicon wafer prices, the company chose to expand the silicon wafer production capacity against the trend.
On June 12th this year, the National Silicon Industry Group announced that the company plans to start the construction of an integrated circuit 300mm silicon wafer production capacity upgrade project. After the project is completed, the company's 300mm silicon wafer production capacity is expected to increase by 0.6 million pieces/month on the existing basis, reaching 1.2 million pieces/month.