The changes in the semiconductor market have once again aroused widespread concern in the industry, and the price of wafer foundry is about to usher in a new round of rise. The price increase is not aimed at memory chips, but focuses on the field of wafer foundry, which undoubtedly brings a lot of shock to the entire semiconductor industry chain.
In the context of serious shortage of production capacity, TSMC, as a leader in the wafer foundry industry, had to make a decision to raise the price of 3nm and 5nm advanced process chips. It is reported that the price increase of 3nm foundry may exceed 5%, which is enough to attract widespread attention in the market. As one of the core competitiveness of the semiconductor industry, the price changes of advanced process chips naturally tug at the heartstrings of many manufacturers.
Advanced process chips refer to those chips with a process size of less than 28nm, including 22nm, 16nm, and the most advanced 3nm chips that can be mass-produced at present. With their excellent performance and power consumption, these chips play a pivotal role in smartphones, high-performance computing, artificial intelligence, and other fields. However, this is not the end of the foundry process, on the contrary, they are moving towards more advanced process technologies. Giants such as TSMC, Samsung, and Intel have been actively developing 2nm and 1nm chip technologies in order to occupy a more favorable position in the future semiconductor market.
However, to achieve the mass production of these advanced process technologies, the support of lithography machines is indispensable. As a key equipment in the semiconductor manufacturing process, the technical level of the lithography machine directly determines the accuracy and efficiency of chip manufacturing. In the global semiconductor lithography machine market, ASML, Nikon, and Canon show a super and strong pattern. Among them, ASML covers all types of lithography machine markets with its strong technical strength and comprehensive product line, and has achieved a unique position in the world in the field of ultra-high-end EUV lithography machines.
There is a gap in the domestic breakthrough, but excellent results have been achieved.
In the field of lithography machines, Shanghai Microelectronics' SSX600 series lithography machines have become the focus of the industry with their excellent performance and ability to accurately meet the fine requirements of chip manufacturing in 90nm, 110nm and 280nm processes. The SSB500 series lithography machine has shown strong competitiveness in the field of advanced packaging with its high efficiency and stability.
In the field of upstream components, Huazhuo Jingke has successfully become the first supplier of double workbenches in China by virtue of its leading technical strength, providing a solid guarantee for the precise operation of lithography machines. At the same time, a number of outstanding enterprises such as Fujing Technology, Tengjing Technology, Maolai Optics, Jingfang Technology and Focuslight Technology play an indispensable role in the supply of optical components.
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It is worth mentioning that Jingfang Technology not only occupies an important position in the supply of optical components for ASML lithography machines, but also is unique in the domestic market with its leading advanced packaging technology. The company has made an important contribution to the rise of the domestic chip industry with its breakthroughs in multiple concepts such as HBM (high-bandwidth memory) and Huawei. In addition, the revenue structure of Jingfang Technology also shows the diversification and stability of its business, with the two major business segments of chip packaging and testing and optical devices accounting for 67% and 32.4% of revenue in 2023, respectively. It has laid a solid foundation for the sustainable development of the company.
Although Jingfang Technology has significant advantages in the field of chip packaging, compared with comprehensive packaging and testing manufacturers such as Tongfu Microelectronics, Changdian Technology, and Huatian Technology, Jingfang Technology's business scope is still relatively focused on the packaging of CIS chips (CMOS image sensors). In addition, Jingfang Technology is also actively expanding packaging technologies in emerging fields such as biometric identification chips and MEMS chips to meet the diversified needs of the market.
In the field of advanced packaging technology, Jingfang Technology has also shown strong strength. The application of advanced technologies such as wafer-level packaging, system-in-package, fan-out packaging and through-silicon via (TSV) technology has enabled Jingfang Technology to occupy a place in the supply system of world-renowned CIS chip companies. However, with the weakness of the consumer electronics market, the shipment of CIS chips has been affected to a certain extent, which also puts the performance of Jingfang Technology under certain pressure.
Despite this, Jingfang Technology has gradually stepped out of the trough of performance by virtue of its unremitting efforts in technological innovation and market expansion. In the first quarter of 2024, the company's revenue and net profit both reversed significantly, achieving year-on-year growth. This achievement not only reflects the resilience and flexibility of Jingfang Technology in responding to market challenges, but also lays a more solid foundation for its future development.
In the field of advanced packaging technology, Jingfang Technology has also shown strong strength. The application of advanced technologies such as wafer-level packaging, system-in-package, fan-out packaging and through-silicon via (TSV) technology has enabled Jingfang Technology to occupy a place in the supply system of world-renowned CIS chip companies. However, with the weakness of the consumer electronics market, the shipment of CIS chips has been affected to a certain extent, which also puts the performance of Jingfang Technology under certain pressure.
Despite this, Jingfang Technology has gradually stepped out of the trough of performance by virtue of its unremitting efforts in technological innovation and market expansion. In the first quarter of 2024, the company's revenue and net profit both reversed significantly, achieving year-on-year growth. This achievement not only reflects the resilience and flexibility of Jingfang Technology in responding to market challenges, but also lays a more solid foundation for its future development.
The company has a comprehensive range of advanced packaging technologies, including wafer-level, system-level, fan-out and HBM's TSV technologies. Therefore, it has entered the supply system of world-renowned CIS chip companies such as Sony and Weir shares, and is known as the "Four Little Dragons" together with Changdian. CIS chips are mainly used in mobile phones and computers, but the decline in consumer electronics demand in 2022 will affect CIS shipments, and the company's performance will be under pressure. In the first quarter of 2024, there will be a significant reversal, with revenue of 241 million yuan, a year-on-year increase of 7.9%, and a net profit attributable to the parent company of 49 million yuan, a year-on-year increase of 72.37%.
What are the advantages of Jingfang Technology?
- The advanced packaging business has entered an upward cycle.
On the one hand, consumer electronics are picking up.
According to data analysis from industry experts and market research institutions, global smartphone shipments in the first quarter of 2024 can be described as an astonishing breakthrough, reaching 296 million units, with a year-on-year growth rate of 18.7%. This growth figure has undoubtedly injected new vitality into the entire mobile phone market and indicates a good trend in the development of the industry. In the domestic market, from January to April, mobile phone shipments also showed a steady growth trend, reaching 91.486 million units, an increase of 12.3% year-on-year. This data not only means that the domestic mobile phone market is gradually coming out of the trough, but also marks that this round of destocking cycle has basically ended, and the market is gradually moving towards a new stage of development.
As mobile phone manufacturers around the world seek to innovate, brands are striving to make their products more appealing. For example, the Huawei P70 series has brought users a better shooting experience by upgrading the camera function. And Apple has installed AI models into mobile phones, providing users with a more intelligent experience. These innovations not only improve the functionality and user experience of mobile phones, but also bring new growth points to the mobile phone market.
The rise of AI mobile phones has injected new impetus into the increase in mobile phone sales. As consumers' demand for mobile phone camera functions continues to increase, the penetration rate of three- or four-camera mobile phones continues to rise, which will further promote the increase in the number of CIS chips. According to the forecasts of market research institutions, the global smartphone rear camera CIS market size is expected to expand significantly in the next few years, from $10.76 billion in 2023 to $17.697 billion in 2027.
Driven by this trend, brands such as Huawei, Apple, and Xiaomi are actively seeking to cooperate with Jingfang Technology to enhance the competitiveness of their products. As a bridge between chip suppliers and mobile phone manufacturers, packaging factories will also play an important role in this process. Whether it is using Sony's chips, Haowei's chips or Gekewei's chips, the packaging factory plays an indispensable role, among which Jingfang Technology is one of the leaders, and its professional technology and rich experience in the field of packaging will provide strong support for the development of the entire mobile phone industry chain.
On the other hand, autonomous driving has driven the volume and price of CIS to rise.
The rapid development of automotive autonomous driving technology has undoubtedly brought huge market demand for cameras, making CIS chips one of the application markets with the most growth potential. Among many automakers, companies such as Xpeng, NIO, and Zhiji have already assembled up to 11 cameras when they only reach the L3 level of autonomous driving technology, and the number of cameras may climb to 16 when the autonomous driving technology reaches the highest level of L5. This trend indicates that the demand for cameras in automobiles will explode as autonomous driving technology continues to advance.
In order to meet the high standards of camera performance requirements for autonomous driving, key indicators such as pixels and detection distance of vehicle cameras are naturally more stringent than ordinary cameras. This pursuit of extreme performance has led to the need for more advanced technology and materials in the manufacturing process of automotive cameras, resulting in their price being more expensive than ordinary cameras. However, it is this high-performance and high-price characteristics that make the on-board CIS chip market show a trend of rising volume and price, which brings huge business opportunities to related enterprises.
At present, the penetration rate and technological upgrading of autonomous driving technology are advancing rapidly. It is predicted that the global shipment of automotive CIS chips is expected to reach 350 million in 2023, a year-on-year increase of 9%. In the next few years, with the further popularization and upgrading of autonomous driving technology, the shipment of on-board CIS chips will continue to maintain rapid growth, and it is expected to grow at a compound annual growth rate of 13.17% from 2022 to 2028.
In addition, in addition to the automotive autonomous driving market, the security monitoring market, the computer market and other fields also have a huge demand for CIS chips. Based on these factors, it is expected that by 2024, the global shipment of CIS chips will reach a staggering 7.5 billion, and continue to maintain a stable growth trend thereafter.
In the face of this huge market opportunity, Jingfang Technology will be able to fully benefit from its advantages of deep binding with downstream CIS chip companies and close cooperation with major shareholders such as Weir shares. With the continuous expansion of the CIS chip market and the continuous advancement of technology, Jingfang Technology is expected to achieve more considerable growth and profitability in the future.
- Optical device business, new growth curve.
Through the acquisition of Anteryon, Jingfang Technology has successfully incorporated high-quality products such as aspheric lenses, wafer optics, laser modules and planar optics. Among them, aspheric lenses have become the company's core products with their excellent performance, and enjoy a high reputation in the industry.
As a key component in the projection objective lens of the lithography machine, the accuracy and performance of the aspheric lens directly determine the imaging quality of the lithography machine. It is precisely because of its excellent performance that aspheric lenses have become the preferred products of semiconductor equipment giants such as ASML, bringing a stable source of orders and revenue to Jingfang Technology.
In addition to semiconductor equipment lithography machines, Jingfang Technology's optical device business is also widely used in intelligent manufacturing, agricultural automation and other fields, and even has a place in the intelligent vehicle market. These diversified application fields not only provide a broader market space for Jingfang Technology, but also further enhance the market competitiveness of its products.
In 2022, Jingfang Technology's optical device business will achieve revenue of 240 million yuan, and in 2023, this figure will increase to 300 million yuan, a year-on-year increase of 25%. This achievement not only fully proves the strength of Jingfang Technology in the field of optical devices, but also lays a solid foundation for its future development.
As one of the leading enterprises in the domestic packaging and testing industry, Jingfang Technology has not only provided strong support for the company's performance growth through the acquisition of Anteryon, but also become an important part of the domestic substitution of lithography machines. Looking forward to the future, with the recovery of the consumer electronics market and the rapid expansion of the automotive intelligent driving market, Jingfang Technology will undoubtedly have more sufficient growth momentum and continue to write a brilliant chapter in the field of optical devices.