IPO Of The Science And Technology Innovation Board: How Is The Technology Of Entering The Big Power And The Vehicle Specification Level Chip?

Recently, China micro semiconductor (Shenzhen) Co., Ltd. (hereinafter referred to as "SMC") sci tech Innovation Board IPO answered the first round of inquiry. The name of this company is quite similar to that of Zhongwei company [688012. Sh, China micro semiconductor equipment (Shanghai) Co., Ltd.], which has landed on the science and technology innovation board, and has attracted market attention.

The IPO of SMC semi conductive Technology Innovation Board plans to raise 729 million yuan, which will be invested in the R & D and industrialization projects of home power and industrial control MCU (micro controller, also known as single chip microcomputer), the research and industrialization project of SOC and analog chip of the Internet of things, the R & D project of vehicle scale chip and the replenishment of working capital, which are all popular application scenarios in the chip field, The IPO process of SMMC semi derivative has attracted much attention.

With the disclosure of the reply letter, more information is also presented to the market. The reporter of 21st century economic report noted that in the first round of inquiry, the supervision paid special attention to the company's business income, core technology and related party customers, and asked whether it had the ability to carry out technology research and development, market development and product sales.

On September 28, the directors and secretaries Office of the semi director of China Micro Technology Co., Ltd. received an interview with the 21st century economic news reporter, and answered more details about the IPO and business layout of the company.

March into big power and car specification chip

When it comes to SMMC semiconducting, at first glance, it may be mistaken that it has something to do with the etching leader Zhongwei company, which landed on the science and technology innovation board in 2019, with a total market value of nearly 100 billion yuan, and is the leader of domestic semiconductor equipment.

Although the names are similar and belong to the semiconductor industry chain, there is no relationship between the two.

Different from SMMC, SMMC is an integrated circuit (IC) design enterprise, whose main business is the R & D, design and sales of digital analog mixed signal chips and analog chips. The main products include home appliance control chips, consumer electronics chips, motor and battery chips, sensor signal processing chips and power devices. They are mainly used in household appliances, consumer electronics, motor batteries, medical health, industrial control, automotive electronics and Internet of things.

They are also quite different in size. From 2018 to 2020, the company's revenue will reach 175 million yuan, 245 million yuan and 378 million yuan respectively, and the net profit attributable to parent company will reach 32365000 yuan, 24991400 yuan and 93.69million yuan respectively. In 2020, the revenue scale of medium and micro companies has reached more than 2 billion yuan.

In terms of product composition, home appliance control chip is the main revenue source of SMMC, accounting for more than half of the total revenue for three consecutive years; The revenue share of consumer electronic chips has increased year by year, from 14.80% in 2018 to 33.80% in 2020; The remaining products are motor and battery chips, sensor signal processing chips, accounting for a relatively small proportion, totaling no more than 10%.

At present, the control chip products are mainly used in water heaters, induction ovens, microwave ovens and other small appliances, while consumer electronics chips are used in electric toothbrushes, electronic cigarettes, wireless chargers and other electronic products.

Combined with the project, it is not difficult to see that it is intended to expand chip application scenarios, such as air conditioning, refrigerator, washing machine and other fields of household electricity; Intelligent water meter, smoke sensor, wireless transmission and other application scenarios of the Internet of things chips, as well as a series of vehicle specification level chips suitable for motor control, battery management, body and entertainment control system.

SMC also said that some of the company's products have entered the field of large household appliances, industrial control and automobile, and have been adopted by domestic and foreign brand customers such as Midea, Gree, Jiuyang, Supor, Xiaomi, ATL (New Energy Technology Co., Ltd.), TTI (Chuangke group), Nidec (Japanese electric power).

It should be pointed out that the competition in the fields of big home appliances, industrial control, Internet of things and automotive electronics will be fierce, and there will be oligopoly. According to its disclosure, the MCU market of white household appliances is still dominated by overseas semiconductor leading companies; The competition in the Internet of things Wi Fi MCU communication chip industry is relatively full; European, American and Japanese manufacturers are in the first echelon of vehicle specification level MCU market, and the domestic penetration rate is very low.

Why occupy a place in these three fields? What SMC is interested in is the broad space of chip localization.

"In the past, it was very difficult for domestic chips to enter these fields. In the whole electronic controller, the master chip is the core of the core, but its price is not high. If you can buy foreign chips, even if they are a little more expensive, many people are willing to buy them. But now entrepreneurs have a strong sense of independent brand, so there is a large market space here, and the micro and medium enterprises also need to enter the large household appliances and industrial enterprises Control, automobile and other fields, "said the person concerned.

As for the process of the layout of the three major fields, the person said, "everyone electric field has entered into all aspects. As for the automobile field, it is impossible to expand without 3-5 years. The company has Beijing team and employees with working background of Renesas electronics. In fact, it has a team with many years of experience in mass production of vehicle specifications, and we are accelerating this."

Torture hard technology content

If we want to break through the science and technology innovation board, we can't avoid the attention of supervision and market on the company's scientific and technological innovation attribute.

In the prospectus, SMMC semiconductors said that they are committed to becoming a platform based chip design enterprise with MCU as the core. They have accumulated a large number of mature digital and analog IP in MCU. The core technologies include high reliability MCU technology, high-performance touch technology, high-precision analog technology, motor drive chip technology and underlying algorithm, low-power technology, etc.

21st century economic reporter learned from the industrial chain that the world has fallen into a chip shortage crisis since 2020. As one of the most scarce chips, MCU has experienced round after round price rise since the second half of 2020, which has also activated the domestic MCU market. At this point, as an enterprise with MCU as the core, and decided to increase the investment in MCU field, it undoubtedly has a promising development prospect.

However, further research on the products of medium and micro semiconducting MCU shows that its revenue is mainly composed of 8-bit MCU, which creates 326 million yuan of revenue in 2020, accounting for 86.24% of the total revenue; The 32-bit MCU generated 31.407 million yuan of revenue, accounting for less than 10%.

From the perspective of market structure, for Chinese enterprises, the mainstream market still remains at 8-bit MCU, and the application field is mostly concentrated in low-end electronic products. But more and more manufacturers are expanding the 32-bit market. With the development of the Internet of things terminal demand, the complexity of the task in the Internet of things era requires the computing power to make MCU design to 16 or 32 bits.

Does this mean that the medium and micro semiconductor MCU products are still relatively low-end?

According to the explanation of the relevant person of SMMC, the company has set up 8-bit MCU for many years, and its development is very mature. The layout of 32-bit MCU is relatively late, so the revenue share of 32-bit MCU is relatively low, but the revenue share of 32-bit MCU is increasing year by year. "This is an inevitable trend, 32-bit MCU resources are larger and faster. Although the medium and micro semiconductors are mainly 8-bit at present, 32-bit has been mass produced."

The Shanghai Stock Exchange also raised questions about the relevant technical reserves of the medium and micro semiconductors: is it feasible to enter the field of large household appliances, industrial control, Internet of things and automotive electronics with the current development status of the medium and micro semiconductors? Do you have the ability to carry out technology research and development, market development and product sales?

This is also a long-term concern of the market. Compared with the same industry, the investment in technology R & D is not high, and the R & D expense rate, per capita salary of R & D personnel and the proportion of R & D personnel are lower than those of comparable companies in the same industry.

According to the data, from 2018 to 2020, the amount of research and development expenses of medium and micro semiconductors is 24.9852 million yuan, 28.9828 million yuan and 33.0342 million yuan respectively, and the R & D cost rates are 14.26%, 11.84% and 8.75% respectively, which is quite different from the industry average of 17.57%, 16.94% and 16.23% of the industry average.

In this regard, the above-mentioned relevant persons of SMC explained that we should not only look at the R & D ratio, but also look at the growth of absolute value. "Because the total sales revenue has increased a lot, the R & D ratio has decreased, but the increase in absolute number shows that the company has increased investment in R & D."

The biggest customer is also the supplier

The relationship between SMC and its key customers has also been repeatedly mentioned in the inquiry letter.

In 2020, the largest customer of SMC semiconductor is Chongqing Zhongke Xinyida Electronics Co., Ltd. (hereinafter referred to as "Xinyida"), which holds 49.00% of the equity of SMID. Moreover, there are 151 overlapping customers and 19 overlapping suppliers.

Similar things happened in Foshan Shunde District Tuoxin Micro Electrical Appliance Co., Ltd. (hereinafter referred to as "Tuoxin micro"). Tuoxinwei is the first largest customer of SMC in 2019 and the second in 2018. At the same time, there are 81 overlapping customers.

As for the highly overlapping relationship between customers and suppliers, SMMC explains that there are differences between the products sold by the company and Xinyida to the downstream, and there are the same direct customers and distributors with the former "in line with the industry practice", while the overlapping suppliers are due to the high market concentration in the wafer manufacturing and chip processing industries; Because Tuoxin micro agent sells some products of Xinyida and Zhongwei semiconductors, downstream customers overlap, but the products sold are not the same.

However, what is puzzling is that Xinyida is also the supplier of SMMC semi derivative and tuoxinwei.

In response, SMMC explained in the reply: "the company's purchase of core Yida chips is mainly used for selling with self-developed MCU chip sets, while Tuoxin micro, as a distributor, purchases core Yida chips and sells them directly to the outside world. The two companies have different uses after purchasing core Yida chips."

The 21st century economic reporter also inquired about this matter, and the other side said that "the chips needed for any intelligent controller are various, and there are complementary parts between them, and manufacturers will also purchase from each other.". According to its statement, SMMC will purchase products from Xinyida and assemble them with self-made chips to form more stable products.

However, in order to reduce related party transactions, SMMC has terminated its cooperation with tuoxinwei in 2020. When asked about the impact of termination of cooperation on the follow-up performance, the relevant person of SMC said on the phone that "it is just a dealer and has no impact on the company's end customers".

At the same time, 49% of the shares held by SMIC will also be transferred to the state-owned listed company electric energy (600877. SH) at a price of 99.1699 million yuan, and the power shares will be paid by issuing shares. As for the impact of the equity transfer on business cooperation, SMMC said that "there is no significant change in the transaction between the two parties in a short period of time".