On November 22, in the earnings conference for Q3 held this afternoon, Zhou Fan Nu, director and CFO of Zhongke Feice, responded that in order to accelerate breaking the monopoly of foreign companies in the domestic market, the company increased its R&D investment in new products and the iterative upgrade of existing products to more advanced processes in the first three quarters, affecting its profitability.

"From the perspective of future R&D expenditure, as ongoing projects progress and product layout gradually improves, the scale of the company's R&D personnel will stabilize, and the future growth rate of R&D expenditure will slow down." Zhou Fan Nu further stated.

Zhongke Feice is a semiconductor quality control equipment company specializing in the research, development, production, and sales of two major categories of integrated circuit special equipment for testing and measurement. Its products include series of non-graphic wafer defect detection equipment, graphic wafer defect detection equipment series, and 3D morphology measurement equipment series, used in domestic IC manufacturing lines of 28nm and above processes.

In the first three quarters of 2024, Zhongke Feice achieved revenue of 0.812 billion yuan, a year-on-year increase of 38.21%; net income was -51.8854 million yuan, a year-on-year decrease of 165.58%; R&D expenses for the first three quarters amounted to 0.335 billion yuan, a year-on-year increase of 131.82%.

During the earnings conference, Chen Lu, Chairman and General Manager of Zhongke Feice, discussed the company's semiconductor quality control equipment research and business expansion. He emphasized two main R&D directions: expanding the types of equipment and upgrading existing products to more advanced processes.

Among them, the bright-field nanometer graphic wafer defect detection equipment has been shipped in small batches; the dark-field nanometer graphic wafer defect detection equipment has been shipped to some customer lines for process development and application verification; the optical critical dimension equipment currently has good customer-side verification results and is undergoing corresponding testing for delivery to the mass production department.

"Significant investments have been made in bright-field and dark-field equipment, with the goal of validating the equipment on customer production lines at the fastest speed and achieving localization replacement," added Chen Lu.

Regarding the current performance of the company's semiconductors quality control equipment market demand, Gu Kainan, director and secretary of the board of directors of Zhongke Feice, stated that benefiting from the continuous expansion of domestic wafer fabs' capacity, the domestic semiconductor equipment industry is in a period of rapid development.

It is worth mentioning that in recent years, applications such as AI and computing power chips have brought many innovations in integrated circuit manufacturing processes, including 2.5D and 3D packaging applied in HBM, these process innovations have also raised higher requirements for detection and measurement equipment.

During the earnings conference, an investor asked: "Can the company's wafer inspection equipment be applied to the production process of HBM chips? Is there any provision of inspection equipment for companies in the HBM industry chain?"

According to Gu Kainan, in the application of 2.5D and 3D packaging, the company's graphic wafer defect inspection equipment can effectively address the significant increase in detection difficulty due to the advancement of packaging technology, such as the continuous narrowing of RDL line width, the continuous increase in surface roughness interference leading to the required increase in detection capability, and the height detection demand of micro bumps brought by 3D packaging.

Looking ahead to the performance in 2024, Chen Lu, chairman and general manager of Zhongke Feice, stated, "Regarding the operation throughout the year, the company is confident in maintaining steady growth."