[Blue Technology Overview] In recent years, it is well known that investment in the semiconductor industry has become a hot topic, and both the primary and secondary markets continue to be promising. Especially in 2021, the chip price rose dramatically, which was reflected in the high investment enthusiasm of the primary market and the soaring share price of chip concept stocks in the secondary market.
However, since the end of 2021, especially since the beginning of this year, the chip industry has begun to have a situation of high inventory and rapid price reduction, which clearly forms a very obvious “ice and fire” comparison with the previous hot “chip tide”.
Now, the cooling phenomenon of this “chip tide” has spread to the capital market. In the first half of 2022, the valuation of some semiconductor companies in the global secondary market continued to decline, exacerbating the sharp fall in the share price of semiconductor concept stocks, the frequent breakouts of new stocks, and the sales of mobile phones and wearable devices also continued to decline; The first-line market has also reacted violently, especially in the consumer semiconductor field, which has a large number of RF chip and Bluetooth chip enterprises, and has gradually lost the favor of the investment circle.
Once determined to become “Qualcomm China”, the IC chip giant Norinco Technology has now fallen into the B-round financing, which is the strongest evidence that the “chip boom” has evolved into a “chip cold current”.
1、 Born in the halo of technology, died in the flood of time
In fact, the deployment of 5G network has been basically completed, and the Internet of Things industry as a whole is on the eve of a comprehensive outbreak. It is hard to imagine that Norlink Technology, with a highly educated and experienced founder team, will go bankrupt.
Sun Xiaohua, the founder of Norlink Technology, has a “technological halo”. He graduated from Tsinghua University and has a doctorate from McGill University. He has successively served in international communication giants such as Cisco and Qualcomm. He has more than 15 years of experience in mixed-mode circuit design and team leadership, and has dozens of low-power mixed-mode design patents. During his tenure at Qualcomm, he also led the team to complete the market definition of the baseband RF chip SerDes module, which is also used in billions of Qualcomm core chips.
Under the leadership of Sun Xiaohua, the first NB-lot chip NK6010 streamed out at the end of 2018, achieved OTA in 2019, and obtained a round B financing of 200 million yuan in 2020. At the end of the same year, the chip has passed the mobile chip certification test and the telecom module warehousing test.
No matter how you look at it, it is a good start from a high starting point. How do you fall down again?
This is probably because Norlink Technology is too “young”. The chip itself is an industry that focuses on long-term investment. For example, HiSilicon of Huawei has taken nearly 20 years to grow from 2004 to today. Qualcomm, an international chip giant, was founded in 1985. After 40 years of development, it dared to call itself a “chip giant”, but there are still many technical difficulties to be overcome.
Ren Zhengfei once said, “Chips are not urgent. They are not only related to process, equipment and consumables, but also practical, and can not be pursued in a foam way!” Before that, a chip enterprise in China was eager to establish 14nm and 7nm logic process production lines, and was eager to create advanced process chips. But finally, the capital chain was broken, and the only 7nm process lithography machine in the mainland was mortgaged, and so on, Perhaps it has solved the mystery of the fall of Norlink Technology.
2、 The desolation after the uproar
The “rise in chip prices” has lasted for nearly 20 months. The vitality of the semiconductor investment market and the rapid growth of the profits of semiconductor enterprises have led to a noisy investment boom. According to Wind data, among the semiconductor enterprises that have announced their performance, the net profit attributable to the shareholders of the company will reach 55.612 billion yuan in 2020, an increase of 1.5 times over the same period of the previous year and a new record.
The desolation after the uproar is a true portrayal of the current cold in the semiconductor industry.
According to the data released recently by SIA (American Semiconductor Industry Association), the global semiconductor sales in the first quarter of 2022 was $151.7 billion, up 23% year-on-year and down 0.5% month-on-month. According to Gartner’s prediction, the global semiconductor revenue will increase by 13.6% in 2022, a significant decline from 26.3% in 2021.
It can be seen that the growth of the global semiconductor market is slowing down, and the semiconductor market is undergoing a cyclical transition from hot to cold.
The “cooling” of the semiconductor market is also directly reflected in the secondary market. According to statistics, from March to April this year, the percentage of new shares breaking on the first day of the Science and Technology Innovation Board reached 77.8%. Among them are new shares such as Microelectronics, Vigemini – U, Green deep pupil – U, Changguang Huaxin and so on.
The downward trend of profits from the enterprise side also began to release the uneasy signal of “chip cold”. According to Wind data, as of May 9, 126 semiconductor companies had announced their financial statements for the first quarter of 2022, of which 16 had a year-on-year decline in net profit or loss. Among them, the leader of sensor chip Weir Co., Ltd. recently disclosed that due to the epidemic and the weakness of the consumer electronics industry, the net profit in the first quarter of this year was 896 million yuan, down 13.9% year on year, and the inventory reached 10.47 billion yuan, up nearly 86% year on year.
3、 Break through the shackles of demand, or be born to the sun
According to the analysis of industry insiders, the semiconductor industry with “good prospects no longer” has suffered a collective cold, or it is related to the weak demand for consumer electronics in the upstream of the industrial chain.
According to the data released by the market research agency CINNO Research, in the first quarter of 2022, the shipment volume of smart phone SoC (system-level chip) in the Chinese mainland market was about 74.39 million, down 14.4% year on year. The shipment volume in March fell by 24.7% year on year, and the month-on-month decline was also 14.6%; During the same period, the global shipment of AMOLED smart phone panels was about 152 million, down 8.0% from the same period last year, and down 28.4% from the fourth quarter of last year.
Due to the decline of the terminal consumer electronics market, the orders of upstream semiconductors have also decreased. The mobile phone, PC, automobile and other markets are currently continuing to decline. It is expected that the downstream market will not rebound in the second quarter. Since the slowdown of the consumer electronics market in the first quarter, the growth of demand for semiconductors has been largely limited. In other words, “blood supply is insufficient”, so there is no kinetic energy.
In addition, in the first half of 2022, the COVID-19 led to the shutdown of some factories and regions. At the same time, the situation in Ukraine led to the price increase of some semiconductor materials. This has affected the back-end supply of semiconductors, resulting in the manufacturer’s extended delivery time. In addition, in the case of limited production level, most semiconductor manufacturers have made a commitment to guarantee supply to key customers, and key product lines have been sold out.
The development of everything is regular and cyclical. Maybe when the COVID-19 starts to recover and the global economy starts to recover, the consumer electronics market can balance supply and demand, and semiconductor also opens new track growth points at the same time, then the shackles on the demand side will be broken through and grow in the sun.