On September 20th, the Shanghai Stock Exchange's semiconductor industry collective performance briefing was held at the Shanghai Stock Exchange and simultaneously broadcast at the Shanghai Listing Roadshow Center. At the event, Weil Semiconductor, Wingtech Technology, Caihong Display Devices, Wuxi NCE Power, Espressif Systems, and Dongxin Stock attended and introduced the development achievements of their companies in the first half of the year, answering questions from investors and the media both on-site and online.

The performance of the A-share semiconductor sector has significantly improved.

Since the beginning of this year, the performance of semiconductor industry companies has generally improved. According to the research report from the Guosen Securities analyst team led by Hu Jian, A-share semiconductor sector revenue in the second quarter increased by 22.9% year-on-year, with the growth rate rising by 2.0 percentage points, and a 15.1% increase compared to the first quarter of this year. In terms of net income attributable to the mother, the semiconductor sector increased by 16% year-on-year, with the growth rate increasing by 10.7 percentage points. Analog chip design, digital chip design, and integrated circuit testing showed significant year-on-year improvement, with a 64% increase compared to the previous quarter.

According to SIA's data, global semiconductor sales in the second quarter of this year were $149.9 billion, an 18.3% year-on-year increase and a 6.5% increase from the previous quarter, marking three consecutive quarters of year-on-year growth. In this, China's semiconductor Q2 sales were $45.3 billion, accounting for 30.2% of the global total, with a 21.6% year-on-year growth.

Many of the six chip companies that participated in the collective performance briefing for the semiconductor industry yesterday are leading companies in their respective fields, leading the semiconductor sector's performance growth this year.

In the first half of the year, Weil Semiconductor achieved a revenue of 12.09 billion yuan, a year-on-year increase of 36.50%; net profit attributable to the mother was 1.367 billion yuan, a year-on-year increase of 792.79%. The revenue for the second quarter of this year was 6.448 billion yuan, setting a new record for the company's single-quarter revenue.

Wang Song, the general manager of Weil Semiconductor, stated that, along with the company's product introduction to the high-end smartphone market and the continuous penetration of the automatic driving application in the automobile market, the company achieved a substantial increase in revenue and a continuous improvement in profitability in the first half of this year.

"The company's high-end CIS products for smartphones have been widely used in the main high-end smartphone rear main camera sensor solutions in China. They are gradually replacing similar products from overseas competitors, achieving a significant breakthrough in the company's market share in the high-end smartphone sector. The product value and profitability are also steadily increasing."

According to Wang Song, the image sensor business of Will Semiconductor is from the revenue of the auto market, and it has continued to grow since the second half of last year, with a continuous increase in market share. In the first half of the year, the revenue increased by 53.06% year-on-year; Emerging markets such as AR/VR have high growth potential under the global trend of intelligence and the convergence of AI and virtual reality.

Espressif Systems achieved a record high revenue of 92.02 billion yuan in the first half of this year, a year-on-year increase of 37.96%; net profit attributable to the parent company was 15.16 billion yuan, a year-on-year increase of 134.85%.

Wang Jue, Deputy General Manager of Espressif Systems and Secretary to the Board, stated that the company's product business layout focuses on two core keywords: 'processing' and 'connection'. The core product is the processor, and after adding the connection function, it forms a competitive differentiation. 'In the era of the Internet of Things, we believe that future products will all be equipped with connection functions. The company's product line already covers Wi-Fi, low-power Bluetooth, and Thread/Zigbee; and in the processor part, the company's new high-performance product line has added edge AI functions, which can improve the intelligent level of Internet of Things devices in various industries. It also provides strong support for real-time data processing.'

In addition to focusing on B-end cooperation, Espressif Systems pays attention to developing an ecosystem for developers, forming a unique 2D2B model. Wang Jue stated that under this model, the more content developers create in the community, the more developers will be attracted, forming a platform effect. This influence then affects the product selection decisions of the commercial companies they serve, ultimately leading to attracting business opportunities from enterprise customers.

In the first half of 2024, Caihong Display Devices achieved a year-on-year revenue growth of 15.91%, and the net profit attributable to the parent company was 91.6 billion yuan, achieving the reversal of losses to profits. Zheng Tao, Secretary of the Board of Caihong Display Devices, stated that in the face of fierce market competition, the company's display panel business insists on being guided by consumer market and end demand, and is committed to deep layout around large-size high refresh rate display products. It is dedicated to building a diversified product matrix to enhance customer value, creating sustainable competitiveness for its products.

In terms of LCD substrates, Caihong Display Devices' overflow method for large tonnage and high-generation (G8.5+) glass substrate products have entered the market in large quantities. The Xianyang G8.5 substrate glass production line has been successively ignited and put into operation, achieving the record of reaching production as soon as it is put into operation. The subsequent production line construction is progressing in an orderly manner. In the first half of 2024, Caihong Display Devices introduced strategic investment institutions and continuously promoted the construction of the Xianyang industrial base, adding new impetus to the high-quality and sustainable development of the company's glass substrate business.

The business topic of industrial integration and globalization is frequently mentioned by enterprises.

Many chip companies that participated in the collective performance conference of the semiconductor industry yesterday have expanded their product lines and terminal applications through mergers and acquisitions in the past few years of rapid development. Many companies have also established a global sales and R&D network. Several company representatives at the scene shared their experiences and achievements.

Will Semiconductor is an industry integration "veteran" of A-share semiconductor companies. Since its listing on the Shanghai Main Board in 2017, it has completed acquisitions of many projects, including Beijing Howe, Synaptics Asia TDDI business, Xinlun Optoelectronics, and Sribo Semiconductor. It has now established a product framework for the coordinated development of three business systems: image sensor solutions, analog solutions, and display solutions.

Wang Song, general manager of Will Semiconductor, said that relying on continuous research and development investment in high-end image sensor products and efficient achievement conversion, the company focuses on its main business and solidifies its market advantage in many fields including smartphones, automotive electronics, security monitoring equipment, computers, and medical imaging, consolidating and enhancing its core competitiveness.

Will Semiconductor is also improving its global strategic layout and continuously optimizing and expanding its development in the global semiconductor industry. It has established 17 R&D centers in China, the United States, Japan, Singapore, Norway, Belgium and other places, attracting more than 2,000 engineers to join to provide services and support to customers worldwide.

The Secretary of the Board of Directors of Wingtech Technology stated at the performance conference that based on the good profit and cash flow contribution of the original semiconductor product line business in recent years, the company has repaid the acquisition loan generated by the acquisition of the semiconductor business at the end of 2023, optimizing the asset-liability ratio. At the same time, Wingtech Technology actively invests in R&D based on the original semiconductor product line, continues to enter new fields, develops more chip SKUs such as SiC Mosfet, GaN, IGBT, power management IC, and launches new products, focusing on improving the quality of its business and continuously enhancing the company's product ASP.

In terms of analog chips, Wingtech Technology has accumulated more than 50 SKUs and put more than 20 SKUs into mass production. In terms of IGBT products, it has launched 600V/650V IGBT single tube products to meet the application needs of industrial motor drives, robots, elevators, machine operators, industrial automation, and power inverters. In terms of SiC products, the company's vehicle-grade 650V SiC diode product combination can meet the needs of automotive and wide-ranging industrial applications, and the 1200V SiC MOSFET meets the requirements of EV charging stations, solar energy, and energy storage inverters.

Wingtech Technology stated that the company has always focused on global balanced configuration. At present, its semiconductor business accounts for about half of its revenue from domestic and international markets. "During the inventory adjustment cycle of automotive power semiconductors, the performance of the semiconductor business in the Asia-Pacific region has offset the weakness in demand in the European and American markets. The balanced global layout advantage allows the company to better cope with the fluctuations in the global market and improve its risk resistance."

Founded in 2014, Dongxin shares successfully listed on the Science and Technology Innovation Board in 2021. According to Jiang Yuzhou, a director, deputy general manager, and secretary of the board of directors of Dongxin shares, since its establishment, Dongxin shares has been committed to the independent research and development of niche storage chips and has narrowed the gap between national storage chip IC design capabilities and international leading levels several times. It has now become one of the few domestic storage chip R&D design companies that can provide NAND/NOR/DRAM design processes and product solutions simultaneously.

To cope with the cyclical fluctuations in the storage industry and optimize its business layout with a focus on storage, Dongxin shares are exploring the integration of "storage, computing, and connectivity" through external investments. In the field of WIFI 7, Dongxin has established a subsidiary called Yixintonggan, while in the GPU field, it has invested in Shanghai Lisan. Jiang Yuzhou said that the above business layout, which is synergistic with the company's main business, will help enhance the company's overall R&D capabilities and core competitiveness, and provide customers with more diversified chip solutions.

The sustainable growth of chip companies has attracted considerable attention.

At the earnings conference yesterday, multiple listed companies answered questions from investors and the media, both on-site and online.

In the first half of this year, Espressif Systems significantly improved its gross margin, with Q2 reaching 44.11%, second only to the level in 2019. Regarding the reasons for the increase in gross margin, Wang Jue of Espressif Systems answered questions from the Science and Technology Innovation Board Daily reporter, saying that the entry of new customers and changes in the proportion of chip sales structure are driving factors for the increase in gross margin.

In terms of product pricing, Espressif adopts a tiered pricing strategy, which means that with the increase in delivery volume by a single customer, there is a corresponding decrease in price. "Most of our existing customers have increased their delivery volumes to a certain level, while new customers in new industries continue to enter, which has to some extent increased the gross margin. When customers enter larger volume levels, the company will also offer discounts on prices, but the ultimate goal of price reduction in exchange for volume is to increase total profits. We pursue profitable and sustainable growth," said Wang Jue. In addition, changes in the proportion of chip sales structure have also driven the overall gross margin of Espressif to rise. "At present, these factors will continue to exist in the second half of the year."

Driven by the application in industries such as new energy vehicles, smart grids, and new energy storage technology, the domestic power semiconductor industry is experiencing vigorous development. As an old player in the power product field, Wuxi NCE Power, when asked by the reporter of the Science and Technology Innovation Board Daily about the core advantages of the company in coping with future challenges, Xiao Dongge, the secretary of the board of directors of Wuxi NCE Power, said that the company is taking a long-term perspective, constantly investing in R&D innovation, continuously strengthening industry chain collaboration, and actively improving fine management capabilities to enhance the company's core competitiveness and domestic and international market position.

It is reported that in terms of product development, Wuxi NCE Power has developed a "construction-derivation-upgrade" model for its product technology platform. Its subdivided model products can be "split-produced" to meet the needs of multiple downstream fields. So far, Wuxi NCE Power has more than 3,000 models of subdivided products, which can meet customers' one-stop procurement needs, and also has a sound product quality control system.

Xiao Dongge also mentioned that industry chain collaboration is crucial for semiconductor R&D and design companies. It is reported that Wuxi NCE Power is the only design company that conducts power device business in all four of Hua Hong Semiconductor's factories, and it is also the semiconductor power device design company with the highest shipment volume on the 8-inch and 12-inch process platforms in China. With a strong industry chain including packaging and testing, it ensures excellent and stable product quality.

Artificial intelligence has undoubtedly become an important driving force for the global semiconductor industry recovery this time. At yesterday's collective earnings conference of the semiconductor industry, investors paid close attention to several companies' product layout and market strategy in AI application chips.

Espressif Systems' Wang Jue answered on-site investors' questions by stating that the industry generally agrees that terminal products need to be connected first so that the products are not isolated, and in the future, they can increase cloud AI (generative AI) functionality through remote upgrades. Therefore, Espressif's products can first help devices achieve the basic function of cloud connectivity, and if needed, assist in calling cloud AI functionality.

"When terminal products use cloud AI functionality, the software complexity of the products usually increases significantly, leading to higher requirements for the processor on the terminal side, sometimes even adding an edge AI auxiliary system." Wang Jue stated that currently, Espressif has added edge AI functionality to some new high-performance product lines. The introduction of edge AI not only enhances the intelligence level of IoT devices in various industries but also provides strong support for real-time data processing.

Regarding the application of semiconductor industry in the field of AI by Wingtech Technology, the company's Secretary of the Board, Gao Yu, answered investors' questions by stating that looking directly at the products, the company's semiconductor products are widely used in data centers, servers' uninterruptible power supplies (UPS), power conversion modules, and other modules, which will benefit from the construction of AI infrastructure.

Furthermore, AI terminal equipment innovation is expected to drive a new round of consumer electronics replacement cycles. Wingtech Technology's semiconductor products are widely used in mobile, wearable, AI PC fields, with many mass-produced product numbers such as power diodes, MOS devices, power management ICs. In addition, looking at the future development of artificial intelligence, the exponential growth in training and inference volumes places higher demands on power devices in terms of conversion efficiency, space utilization, etc. GaN, SiC, and other third-generation semiconductor products will see a rapid increase in penetration rate in servers, data centers, and the company focuses heavily on the research and development and capacity building of these products.

Jiang Yuzhou from Dongxin Shareholding answered investors' questions by stating that in 2024, benefiting from the increase in bulk storage prices, the niche storage market is gradually beginning to recover. It is expected that with the continued recovery of demand in the second half of the year, product market prices will gradually recover. "We see high order visibility in the second half of the year for the network communication sector, while monitoring security is basically on par with the first half of the year, and demand for consumer electronics, industrial control, and automotive standards are currently relatively stable from a domestic perspective, while domestic car manufacturers' demand for domestically produced storage chips is growing. Overall, the industry demand is gradually recovering."