Net profit surged 222% in 2017, and Changdian Technology reached a turning point in performance

Latest update time：2018-04-12

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Source: Content compiled by Semiconductor Industry Observer, thank you.

Last night, Changdian Technology released its 2017 financial report. Data showed that in the past year, the company's overall performance continued to grow at a high rate: the company's annual operating income was 23.9 billion yuan, a year-on-year increase of 24.54%; the net profit attributable to shareholders of listed companies was 343 million yuan, a year-on-year increase of 222.89%.

Among them, STATS ChipPAC's Shanghai plant successfully relocated the entire factory to Jiangyin as planned in September 2017. At the same time, the new Jiangyin plant operated well, with revenue in the fourth quarter increasing by nearly 50% month-on-month, fcCSP production hitting a record high, and basically achieving break-even in a single quarter.

As for the former Changdian headquarters, it will further optimize product structure, reduce costs and increase efficiency through technological transformation, and improve labor productivity.

The profit margin was increased, and both revenue and gross profit reached record highs in 2017. Revenue increased by 15.66% over the same period last year, and net profit increased by 46.05% over the same period last year.

After coming to Changdian Advanced, by actively expanding the market and developing key customers, the production and sales volume increased rapidly, and the revenue and profits reached new highs, maintaining high growth; the revenue increased by 46.73% over the same period last year, and the net profit increased by 76.78% over the same period last year.

In terms of products, the revenue of chip packaging and testing business is 23.4 billion, an increase of 25% over last year, but the gross profit margin is relatively low, only 11.33%; while chip sales are about 340 million, an increase of 15% over last year, with a gross profit margin of 35%. From the above data, we can see that the packaging and testing business is still the main source of income for Changdian, but if its gross profit margin can be further improved, it is an important issue that Changdian needs to pay attention to.

From a regional perspective, Changdian's domestic sales were RMB 4.26 billion, with a gross profit margin of 34.88%, while its overseas sales were RMB 19.49 billion, but the gross profit margin was only 6%. Data shows that the gross profit margin of overseas sales is relatively low, which is the result of the influence of international competitors, but the business in this area is relatively large, so if Changdian can gain recognition from foreign customers by improving the technical level and product level, it is the key to the growth of this business; in terms of domestic sales, although the gross profit margin is relatively high, due to the relatively low total sales, how to expand and increase the domestic market share has become the focus of work.

Core competitiveness highlighted

According to the introduction, the company's main business is the packaging and testing of integrated circuits and discrete devices, as well as the chip design and manufacturing of discrete devices; it provides a complete set of semiconductor packaging and testing solutions covering packaging design, solder bumps, probes, assembly, testing, and distribution for customers at home and abroad. At present, the company's products mainly include QFN/DFN, BGA/LGA, FCBGA/LGA, FCOL, SiP, WLCSP, Bumping, MEMS, Fan-out eWLB, POP, PiP and traditional packaging SOP, SOT, DIP, TO and other series. The products are mainly used in electronic equipment and intelligent fields such as computers, network communications, consumer electronics and smart mobile terminals, industrial automation control, power management, automotive electronics, etc.

After years of reinforcement, in 2017, Changdian Technology's sales revenue ranked third among the top 10 global IC outsourcing packaging and testing companies. 80% of the top 20 semiconductor companies in the world have become the company's customers.

In high-end packaging technologies (such as Fan-outeWLB, WLCSP, SiP, BUMP, PoP, etc.), Changdian Technology has also developed in parallel with international advanced peers, leading the country and achieving large-scale production. According to a report by research institution Yole Développement, in terms of advanced packaging wafer share, the global market share ranking is: Intel 12.4%, SPIL 11.6%, and Changdian Technology 7.8% ranked third.

As for R&D, Changdian has two R&D centers in China and Singapore, with R&D platforms such as "National Engineering Laboratory for High-density Integrated Circuit Packaging and Testing", "Postdoctoral Research Workstation", and "National Enterprise Technology Center"; it also has an experienced R&D team. In 2017, the company applied for 226 patents, of which 193 patents have been accepted. As of the end of this reporting period, the company has obtained 3,504 patents, including 2,743 invention patents (1,758 patents obtained in the United States), covering the mid-to-high-end packaging and testing fields.

From the product perspective, the packaging and testing services currently provided by Changdian Technology cover a wide range of integrated circuit packaging and testing from high, medium and low levels, and are involved in various semiconductor product terminal market application fields. It has production bases with clear division of labor, technical characteristics and competitive advantages in Singapore, South Korea, Jiangyin, Chuzhou and Suqian, China.

STATS ChipPAC Jiangyin Plant, Changdian Technology Headquarters and Changdian Advanced have leveraged their respective strengths to establish a strong one-stop service capability from chip bumping to FC flip-chip.

In recent years, there have been frequent mergers and acquisitions and reorganizations among global integrated circuit packaging and testing companies, such as Taiwan's ASE and SPIL's joint venture to establish a holding company, Amkor's acquisition of J-Device, and Changdian Technology's acquisition of STATS. Judging from the market share rankings in recent years, the competitive landscape of the global chip packaging and testing market has basically taken shape, with industry leaders occupying the majority of the market share. According to statistics from Toppu Research Institute, the top three companies had a market share of 56% in 2017 (calculated based on the combined performance of ASE and SPIL).

However, domestic support for the integrated circuit industry, as well as artificial intelligence/5G communications/Internet of Things/automotive electronics, etc., have provided new development opportunities for the packaging and testing industry.

As Mr. Wang Xinchao, Chairman of Changdian Technology, mentioned in an interview with Semiconductor Industry Observer last year: In the second half of 2018, Changdian Technology will usher in a turning point in performance.

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