Leon Micro: The shortage of power semiconductors is mainly due to the rapid growth of the demand side

On May 24, Hangzhou Leon Microelectronics Co., Ltd. (hereinafter referred to as “Leon Micro”) released the record of the investigation activities of receiving investors.

Mr. Wu Nengyun, the company’s director, deputy general manager, chief financial officer and secretary of the board of directors, introduced the three major business sectors of the company to the investors: the production process, technical performance, Basic overview of application fields, etc., and introduce the progress of future key projects.

Since its establishment in 2002, the company has always focused on the research and development, manufacturing and sales of semiconductor materials for integrated circuits and semiconductor power devices. In 2015, the subsidiary Leon Dongxin was established to enter the field of compound semiconductor radio frequency chips. The company insists on increasing investment in technology research and development, and continuously strengthens its own research and development strength and technology accumulation by undertaking major national science and technology projects and introducing high-end technical talents. The company has been selected as “China’s Top Ten Semiconductor Power Device Enterprises in 2017” by China Semiconductor Industry Association, and Zhejiang Jinruihong, a subsidiary of silicon wafer business, has been rated as “China’s Top Ten Semiconductor Materials Enterprises” for many consecutive years from 2015 to 2019. Semiconductor No. 1 in the silicon wafer industry. At present, the company has a complete industrial platform with strong competitiveness in the manufacture of silicon single crystal, silicon grinding wafers, silicon polishing wafers, silicon epitaxial wafers, power devices and compound semiconductor RF chips.

The main questions of the research and exchanges and the company’s responses are summarized as follows:

1. How long does the company think that the price increase of power semiconductors and the current supply and demand relationship can last? How do you see the impact on product pricing after the increase in supply in the future?

A: First of all, the shortage of power semiconductors mainly comes from the rapid growth of the demand side. The rapid growth of the demand side is mainly based on the following reasons. On the one hand, the rapid growth of new energy vehicles, on the other hand, the rapid growth of clean energy business, the rapid growth of these two aspects of business has brought about rapid growth in the demand for semiconductor power devices, and these two aspects of demand will be in the next 3-5 years. Growth is certain. In addition, thanks to the gradual popularization of 5G communication, there are more and more new Electronic and intelligent application scenarios, and new application scenarios such as the Internet of Things and artificial intelligence emerge in an endless stream, and there will be more and more new demands for power semiconductors.

Secondly, on the supply side, semiconductor power device manufacturers generally need 2-3 years to reach the stage of ramping production capacity according to the normal expansion speed, from plant construction to client verification. At the same time, the delivery time of the current semiconductor power device equipment purchase is prolonged. Due to the delivery of equipment, the construction period of the plant and the verification period of customers, the process of increasing production capacity may not be so smooth. Therefore, the company believes that the prospect of semiconductor power devices is optimistic in the next 3-5 years.

2. Where did the company’s earliest silicon wafer technology come from?

A: Academician Que Duanlin is an academician of Silicon Materials of Zhejiang University. In 2000, Zhejiang Jinruihong was established in Ningbo. As the founder of the company’s silicon wafer business, Que Duanlin’s core technology is derived from independent property rights and independent research and development. The earliest technologies invented by Professor Que Duanlin include nitrogen-doped technology protection, Czochralski silicon single crystal technology, etc. More than 20 years ago, the related technology was basically monopolized by the top five foreign silicon wafer companies, and it is difficult to enter this industry without its own proprietary technology. Que Duanlin, the founder of the company, was the first director of the State Key Laboratory of Silicon Materials of Zhejiang University. After the establishment of the company, the company recruited a large number of undergraduate, master and doctoral students from the State Key Laboratory of Silicon Materials of Zhejiang University. Formed an independent research and development team. The company now has more than 60 patents, including more than 30 patents in the field of silicon wafers. The trace germanium-doped silicon single crystal technology invented in 2019 was awarded the “Second Prize of National Technology Invention”.

3. What is the proportion of the sales of silicon wafers to the entire company’s revenue?

In 2020, the company’s consolidated sales are about 1.5 billion yuan, of which the silicon wafer business is about 1 billion yuan, and the power semiconductor business is about 500 million yuan. Among them, the silicon wafer business income excludes the part that is supplied to the parent company for the production of semiconductor power devices. If this part of related sales is added, the silicon wafer income is about 1.2 billion yuan. Please refer to the data disclosed in the company’s 2020 annual report for specific figures. prevail.

4. What is the specific structure of the company’s 1.2 billion yuan wafer revenue in 2020?

A: In terms of the company’s operating income structure, the revenue of 8-inch silicon wafers accounts for more than 50%, and the revenue of epitaxial wafers accounts for more than 70%. The 12-inch silicon wafers began to be shipped last year, and the revenue in 2020 will be less than 10 million yuan, but from 2021 Since the beginning of 2020, 12-inch silicon wafers have achieved large-scale production and sales, which will make a greater contribution to sales revenue in 2021.

5. What is the current design capacity of the company’s 12-inch silicon wafers?

A: One of the company’s non-public offering of shares in 2021 is the 12-inch silicon wafer project with an annual output of 1.8 million. At present, the project has built a monthly production capacity of 20,000 pieces, and is expected to have a monthly production capacity of 100,000 pieces by the end of June 2021. It is expected that the full production capacity will be completed by the end of 2021.

6. What is the technical level gap between the company’s silicon wafer products and the world’s top 5 silicon wafer manufacturers?

A: In the competitive landscape of the global silicon wafer market, the world’s top five silicon wafer manufacturers are Shin-Etsu Chemical and SUMCO of Japan, Taiwan’s Global Wafer, Germany’s Siltronic, and South Korea’s SKSiltron. The world’s top five companies occupy more than 97% of the market for 12-inch silicon wafers. share. Compared with foreign countries, the company’s silicon wafers have achieved simultaneous competition with 6-inch and 8-inch silicon wafers. Some of the heavily doped silicon wafers are the company’s special products. The sales price is higher than the average selling price of foreign manufacturers, and the company’s about 20 % of silicon wafers are exported overseas. For example, ON Semiconductor is also a customer of the company’s 8-inch and 12-inch silicon wafers. The gap between domestic and foreign countries mainly lies in 12-inch light-doped silicon wafers. The company started to build a 12-inch light-doped silicon wafer production line in 2018, purchased equipment in 2019, and opened a production line with a monthly capacity of 20,000 pieces in early 2020. Because lightly doped silicon wafers need to be verified by test pieces first, and then verified by positive wafers, the gap with foreign countries is mainly the gap in time and verification cycle. In terms of 12-inch re-doped silicon wafers, the company’s 12-inch re-doped silicon wafer technology level has been completely synchronized, and some 12-inch re-doped silicon wafers with special specifications have achieved leadership.

7. What are the advantages of the company?

A: First, the company has advanced technology and independent intellectual property rights; second, the company has a complete industrial chain, starting from pulling single crystals to polishing wafers and then epitaxial wafers; third, scale advantages. The company has ranked first in China for many years; fourth, the advantage of high-end customers. China Resources Micro is the company’s largest customer, SMIC is the second largest customer, and other large customers include Hua Hong, Hangzhou Silan Micro, American ON Semiconductor, Japan Toshiba, Taiwan Hanlei, etc. The company has occupied a very favorable supply business location; fifth, talent advantage. Most of the other domestic silicon wafer manufacturers have introduced external technical teams, while the company mainly trains its own teams. Academician Que Duanlin is our founder. The company has recruited and trained a large number of talents from the Silicon Materials Department of Zhejiang University and the State Key Laboratory of Silicon Materials of Zhejiang University. On this basis, some talents have been introduced in a targeted manner.

8. How about power semiconductors?

A: The power semiconductor business is operated by the parent company Leon Micro. At present, there are mainly three types of products: SBD, MOS and TVS. The new product FRD is being verified by customers and is expected to be sold through verification in the first quarter of next year. At present, the company’s monthly shipment of SBD is 100,000 pieces, MOS is 30,000 pieces per month, and TVS is 5,000 pieces per month.

Product uses are mainly four categories: ① automotive electronics. The company sells 20,000 to 30,000 pieces per month to automotive electronics customers, such as Bosch, Continental, Fagor, etc., which have cut the company’s power semiconductor chips into automotive electronics, and the company eventually sells them for automotive electronics through Taiwan Semiconductor and ON Semiconductor; ② A dedicated Schottky chip for photovoltaics. Photovoltaic customers are indirect customers of the company, such as Xi’an LONGi, Jinke Energy, JA Solar and other photovoltaic terminal customers. The company sells more than 50,000 pieces of photovoltaic customers every month, accounting for about 35% of the global market share of photovoltaic special SBD chips; ③ power management chips. Including fast charging of mobile phones, power management of LEDs, power management of the whole equipment, etc., the company’s power management chips will be used; ④ Drive control purposes. Including white goods, the PPS of home appliances needs to use power chips. The company’s products are mainly used in the above four categories. The company’s power device products were rated as the 7th among the top 10 semiconductor power devices in China in 2017. The competition in the power device industry is relatively fierce, and the technical threshold is not high, but the company’s development strategy is a differentiated characteristic subdivision route, and growth is achieved in the characteristic subdivision industry.

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