On December 31, the Star Daily reported (commentator Tian Ye) that China's leading semiconductor company Wingtech Technology's drastic measures have drawn attention both inside and outside the industry.

Wingtech Technology announced on the evening of December 30 that it plans to sell assets related to its product integration business to focus on its semiconductor business. This strategic adjustment has dual significance for Wingtech Technology itself and the domestic semiconductor industry.

From Wingtech Technology's perspective, its main business originally covered fields such as semiconductors and product integration. In terms of semiconductors, it owns quality assets like Nexperia and has strong competitive power in niche areas such as power semiconductors. However, the product integration business mainly involves ODM and other business models, and in recent years has faced problems such as intense industry competition, declining gross margins, and significant uncertainties in orders.

Regarding Wingtech Technology's fundamentals, as of the end of the third quarter of 2024, total liabilities were 40.092 billion yuan, with a debt-to-asset ratio of 51.31%. Among them, the product integration business achieved revenue of 15.73 billion yuan in the third quarter of 2024, a year-on-year increase of 45.58%, but it also faced a net loss of 0.357 billion yuan; meanwhile, the semiconductor business revenue was 3.832 billion yuan, with a net income of 0.666 billion yuan.

The sale of assets by Wingtech Technology can, to some extent, optimize the financial structure and reduce the level of debt.

This move by Wingtech Technology is a strategic choice to focus on advantages and operate with less burden. Divesting the product integration business allows the company to concentrate human, material, and financial resources on the development and expansion of its semiconductor business, potentially enhancing its competitiveness in the semiconductor field.

According to reporters from the Star Daily, Wingtech Technology's power semiconductor products rank first in the national market and are third globally. In terms of market application, Wingtech Technology's performance in the automotive semiconductor sector is even more remarkable, with 63% of its semiconductor business revenue in the first half of 2024 coming from automotive scenarios, and currently 90% of Wingtech Technology's semiconductor products comply with automotive grade standards, with product defect rates as low as one in a billion.

As a leading company in the Semiconductors Industry, stagnation is a huge taboo. From Wingtech Technology's Global Strategy, it can be seen that beyond applications in Autos, there are vast markets in industrial Energy, computing, Consumer Electronics, and other scenarios that need to be further explored in the future. In terms of product variety, Wingtech Technology is continuously expanding its product lines in analog and logic ICs other than power products. From the perspective of the Industry Chain, as a global IDM company, Wingtech Technology needs to efficiently coordinate innovation resources such as design and R&D, chip manufacturing, and raw material supply worldwide......

In the current international situation and ever-changing industrial environment, the challenges are self-evident, and the journey is undoubtedly perilous. Therefore, enterprises need to focus on strategic businesses aimed at the development of new productive forces to enhance certainty in future growth.

Starting from integrated Business and focusing its main business on Semiconductors, Wingtech Technology's transformation aligns with the needs of different stages of national industry development. From a macro perspective, the current Semiconductors industry is crucial to China.

Semiconductors are the core element of the information technology Industry and an important indicator of a country's technological strength. In the current wave of digitalization and AI, there is enormous and continuously growing demand for Semiconductors across various fields, from Smart Phones and home appliances to the automotive industry and Datacenter. However, for a long time, China’s Semiconductors industry has faced many "bottleneck" challenges, such as limitations in high-end chip manufacturing technology and reliance on imports for key equipment.

Against this backdrop, Wingtech Technology's decision to focus on Semiconductors Business represents a proactive exploration by Chinese enterprises on the road to semiconductor independence. On one hand, it helps to address some "bottleneck" issues. Wingtech Technology's deep engagement in the Semiconductors field is expected to achieve more breakthroughs in chip design and manufacturing, reducing dependence on foreign technology. On the other hand, it promotes the process of technology independence. Concentrating resources on Semiconductors can accelerate the domestic substitution process and enhance the overall strength of China's Semiconductors industry, contributing to the goal of technological independence.

In summary, Wingtech Technology plans to sell the assets of its product integration Business to focus on the Semiconductors Business, which is not only a necessity for the company's self-development but also an important measure to align with the development trend of China's Semiconductors industry. There is hope for Wingtech Technology to continue making breakthroughs in the Semiconductors field, solving "bottleneck" issues, and exploring pathways to technology independence for China. It is also hoped that more enterprises will join in to jointly promote the rise of China's Semiconductors industry.

Of course, how effective Wingtech Technology's business adjustment will be and what kind of company it will become in the future is worth our continued attention. (Reporter Guo Hui has also contributed to this article.)