Nuggets memory chip blue ocean, Juchen Semiconductor breaks the bottleneck with “5G replacement wave”

Nuggets memory chip blue ocean, Juchen Semiconductor breaks the bottleneck with “5G replacement wave”

With the development of smartphones, the number of rear cameras on mobile phones has gradually increased. Some people think that too many cameras affect the overall beauty of the back of the mobile phone, and some people think that it is unnecessary to have too many cameras on the mobile phone.

However, this has brought a new development opportunity to a company that provides EEPROM (Erasable Programmable Read-Only Memory) for cameras. It is Juchen semiconductor. With the increasing number of mobile phone cameras, the demand for EEPROM of Juchen Semiconductor is also increasing.

On November 4, the application status of Juchen Semiconductor entered the stage of “submission for registration”. As of now, there have been more than 20 semiconductor companies on the Science and Technology Innovation Board, and the total number of accepted companies has reached 174. On April 2, Juchen Semiconductor submitted a listing application to the Science and Technology Innovation Board, and the first round of inquiries began ten days later. On October 30, it entered the review process of the Science and Technology Innovation Board Listing Committee, and the registration was successfully submitted on November 4.

However, some companies passed the listing committee’s inquiries and finally failed. Whether Juchen Semiconductor can successfully ring the bell for listing is still unknown.

Juchen Semiconductor, a storage unicorn, has three product lines to nugget the chip market

Juchen Semiconductor is an integrated circuit design enterprise. Its main business is the R&D, design and sales of integrated circuit products, and provides product solutions and technical support services.

According to the prospectus, Juchen Semiconductor currently has three main product lines: EEPROM (charged erasable programmable read-only memory), voice coil motor driver chips and smart card chips. The products are widely used in smartphones, LCD tablets, computers and peripherals, white electronics. , automotive electronics and many other fields.

As the world’s leading EEPROM chip design company, Juchen Semiconductor plays a pivotal role in the segment of smartphone camera EEPROM chips.

According to CCID Consulting, the company was a smartphone camera EEPROM product supplier in 2018, accounting for about 42.72% of the global market share. EEPROM products are undoubtedly the core business of Juchen Semiconductor, and the data disclosed in the prospectus can be more intuitively reflected. The importance of EEPROM products to Juchen Semiconductor.

In terms of revenue, during the first three-year reporting period from 2016 to the first half of 2019, EEPROM’s revenue accounted for more than 75% of Juchen Semiconductor’s operating revenue, and it showed an increasing trend year by year.

Nuggets memory chip blue ocean, Juchen Semiconductor breaks the bottleneck with “5G replacement wave”

In terms of the use plan of the raised funds, Juchen Semiconductor will raise funds of 727 million yuan and plan to invest in 3 projects, including the development and industrialization of non-volatile memory technology with EEPROM as the main body, the technology upgrade of mixed-signal chip products and Industrialization projects and R&D center construction projects.

Nuggets memory chip blue ocean, Juchen Semiconductor breaks the bottleneck with “5G replacement wave”

In LCD panels and other consumer electronics, communication electronics, automotive electronics and other market applications, Juchen Semiconductor has also accumulated many high-quality end customer resources at home and abroad, including BOE, LG, Hisense, Haier, etc.

At the same time, Juchen Semiconductor is also a mainstream supplier of smart card chips in China. It has a national commercial encryption product production/sales certificate and is one of the exclusive chip suppliers of the Ministry of Housing and Urban-rural Development.

Backed by the 5G “replacement tide”, the penetration of dual-camera and multi-camera drives the growth of the EEPROM market

As Juchen Semiconductor’s product with the highest revenue share, the continuous development of the EEPROM market and the resulting demand for EEPROM products will become an important driving factor for business development and revenue growth.

Such a high sales volume of EEPROM is mainly due to the increase in consumer demand for camera module imaging quality and fast focusing functions in recent years.

Smartphone cameras are one of the main application markets for EEPROMs. As smartphones enter the stock era, major mobile phone manufacturers are actively seeking differentiated competitive advantages. As camera function upgrades and image quality optimization can bring significant user experience improvements, camera technology innovation has become the focus of major mobile phone manufacturers. The focus of differentiated competition.

According to CCID Consulting’s statistics, with the accelerated penetration of rear dual-camera and multi-camera technologies, the proportion of smartphones with multiple cameras will increase. Driven by the increase in the penetration rate of dual-camera and multi-camera, the demand for EEPROM for smartphone cameras will continue to grow.

In the future, 5G will become an important driving force for the growth of mobile phone sales. In 2019, Samsung, Huawei, Xiaomi, ZTE and other major mobile phone manufacturers have successively released 5G models that can be mass-produced, and many products have been launched in 2019. According to CCID Consulting, the global smartphone shipments in 2018 were 1.405 billion units, and it is expected that the global smartphone shipments will reach 1.645 billion units by 2023. The launch of 5G mobile phones is expected to usher in a new “replacement wave” in the smartphone market, driving smartphone shipments to recover.

In addition, with the continuous development of the Internet of Vehicles and electrification, the penetration rate of automotive Electronic products will increase rapidly, further driving the growth of the EEPROM market.

All in all, with the commercialization of 5G and the accelerated penetration of dual cameras and multi-cameras, the demand for mobile terminal devices such as smartphones, smart tablets, and wearable devices will continue to increase, and the replacement cycle will continue to shorten, which will bring stable growth to the EEPROM market. market space.

Gross profit margin risk is implied behind the performance, can Juchen Semiconductor usher in the glory of “National Core”

In the long run, Juchen Semiconductor has huge market potential. However, looking at Juchen Semiconductor’s performance in recent years, it can be seen that it is “coerced” in the risk of declining gross profit margins.

According to the prospectus, from 2016 to 2018, the company’s comprehensive gross profit margins were 45.47%, 48.53% and 45.87%, respectively. Between 2017 and 2018, Juchen Semiconductor has experienced a decline in gross profit margins. The phenomenon. In this regard, it said that the company’s gross profit margin is mainly affected by many factors such as product selling price, raw material and packaging and testing costs, supplier technology level and the company’s design capabilities. Changes in these factors will lead to a decline in the company’s gross profit margin.

In fact, the integrated circuit industry where Juchen Semiconductor is located is an era where opportunities and challenges coexist.

First of all, from the perspective of opportunities in the integrated circuit industry, the state continues to pay attention to and strongly supports the development of the integrated circuit industry, and successively promulgated laws such as the Interim Administrative Measures for the Recognition of Integrated Circuit Design Enterprises and Products, and the Regulations on the Protection of Integrated Circuit Layout Designs. Regulations “escort” the healthy development of the integrated circuit industry.

On the other hand, the market demand for integrated circuits continues to expand. According to the statistics of China Semiconductor Industry Association, the sales of China’s integrated circuit design industry reached 251.93 billion yuan in 2018, a year-on-year increase of 21.5%, and the compound growth rate of sales of integrated circuit design industry from 2014 to 2018 reached 24.0% , maintain rapid growth.

Then, look at the challenges that Juchen Semiconductor will face in the industry. On the one hand, the relatively weak foundation of the integrated circuit industry may become a challenge in the industry. In general, the technological development of Chinese semiconductor companies is lagging behind, the integrated circuit design industry is not as mature as foreign markets, the industrial environment needs to be further improved, and the overall R&D strength and innovation capabilities need to be improved.

On the other hand, the lack of high-end professionals will also become an inevitable challenge. The integrated circuit industry is a typical technology-intensive industry, but my country’s integrated circuit industry started late, there is a lag in the talent pool, and the shortage of high-end professionals still exists.

According to past experience, when any industry is developing, there are also “challenges” that coexist with opportunities. Although Juchen Semiconductor’s EEPROM is the third in the world and the first in China, the total market share only accounts for 8.17%. In the chip semiconductor industry chain, domestic companies still have a long way to go.

In general, although Juchen Semiconductor sprints to the Science and Technology Innovation Board with the halo of my country’s integrated circuit design, it also has some risk points common to companies landing on the Science and Technology Innovation Board, such as the unfavorable factor of “gross profit decline”.

However, driven by new market demands such as 5G, artificial intelligence, and the Internet of Things, integrated circuit technology will accelerate reform and innovation, and foundries will further upgrade the technology level. In addition, the country is vigorously supporting the development of the integrated circuit industry. Moore’s Law The limit is also gradually approaching, and the development speed of advanced support is slowing down. As a storage unicorn, Juchen Semiconductor will surely usher in its own glory.

Author: Li Teng