Will Semiconductor Technology: Will the leader in semiconductor design and distribution stand out?

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On the evening of March 27, Will Semiconductor released its 2018 annual report, saying that in 2018, the company achieved total operating revenue of 3.964 billion yuan, a year-on-year increase of 64.74%; net profit attributable to shareholders of the listed company was 139 million yuan, a year-on-year increase of 1.20%; excluding the impact of the company's 2017 restricted stock equity incentive plan in 2018, the net profit attributable to shareholders of the listed company was 346 million yuan, a year-on-year increase of 117.64%. The announcement showed that the company's total operating revenue increased significantly, mainly benefiting from the growth in demand for semiconductor products in the downstream industry and the rise in prices of semiconductor components. The company's sales to existing customers increased while actively expanding new customers; in the design business, IC, RF and micro-sensor products achieved a significant increase. In addition, the company has completed the development and production of the 6th generation library of satellite live broadcast chips at the end of 2018, and it is expected to enter the stage of large-scale promotion and application in 2019.

Will shares are mainly engaged in the design, manufacture and sale of high-performance integrated circuits used in portable electronic products, televisions, electric vehicles, electric meters, communication equipment, network equipment, information terminals and other fields. The products mainly include switching devices, signal amplifier devices, system power supply and control solutions, system protection solutions, electromagnetic interference filtering solutions, discrete devices, etc. As a high-tech enterprise, the company has always focused on technology development, always insisted on independent innovation, continuously increased R&D investment, established a customer-oriented R&D model, and has long been committed to the research of TVS, MOSFET, Schottky diodes, IC power management and other products. With excellent R&D methods and capabilities, it has developed a series of industry-leading core products. As of the end of 2018, the company has 67 authorized patents, including 20 invention patents and 47 utility models; 75 integrated circuit layout design rights; and 84 software copyrights.

Weil shares rely on independent research and development and complete product manufacturing processes, combined with strict and scientific corporate management, and through a sales strategy of homogeneous prices, it has quickly occupied the market. The company's products have obvious advantages in replacing imports: First, the company's many core technologies in the fields of TVS, power management IC, RF products, etc. have reached the international advanced level, and the product performance and quality are basically equivalent to those of international manufacturers. With the production capacity and price advantages of wafer manufacturing and packaging and testing foundry companies, the company has achieved good control of product costs and has outstanding competitive advantages in product cost performance. Secondly, the perfect domestic supply chain can not only reduce logistics costs, but also greatly shorten delivery time. In addition, the customer base served by the company is mainly well-known domestic mobile phone brand manufacturers and ODM manufacturers. The company can more fully provide customers with product customization design services and after-sales technical support.

In 2018, based on the semiconductor discrete device design industry, Will shares took advantage of its advantages in technology, qualifications, brands, sales channels, services, etc., took mobile communications and digital products as the foundation for development, and actively expanded the application of products in security, network communication, smart home, wearable devices, automotive electronics and other fields. By deepening the layout of IC design, the company achieved revenue of 831 million yuan in semiconductor design business, accounting for 20.99% of the company's main business revenue in 2018, an increase of 15.19% over the previous year. In 2018, the company's semiconductor distribution business achieved revenue of 3.128 billion yuan, accounting for 79.01% of the company's main business revenue in 2018, an increase of 86.73% over the previous year. Through clear product and market positioning, the company has built a stable and efficient marketing model, formed a differentiated competitive advantage, and continuously enriched the types of product lines of agents, and continued to make breakthroughs in the development of new customers. In the first half of 2018, the company seized the opportunity of market shortage and actively expanded the scope of the company's customer market, with obvious breakthroughs in the industrial equipment, security electronics and other markets.

In order to further enhance the company's strength in the field of chip research and development, during the reporting period, Will Semiconductor intends to purchase 85.53% of Beijing OmniVision's equity, 42.27% of Sipix's equity and 79.93% of VisionSource's equity by issuing shares. At the same time, it intends to issue shares privately to no more than 10 qualified specific investors by way of inquiry to raise supporting funds of no more than 2 billion yuan for the construction projects of the target company and to pay the fees of intermediary agencies. The customers of the company and the target company are mainly concentrated in the fields of mobile communications, tablet computers, security, automotive electronics, etc., and the overlap of terminal customers is relatively high. Through this transaction, on the one hand, the product categories of the listed company's design business have been enriched, driving the rapid improvement of the company's overall semiconductor design technology level, and on the other hand, it also brings the company high-quality customer resources in the fields of smartphones, security, automobiles, and medical care.

In the future, Will Semiconductor will continue to focus on the design, development and distribution of electronic semiconductors, leverage its advantages in technology, brand, sales channels, services, etc., take mobile communications and digital products as the foundation for development, actively expand the application of products in security, network communications, smart homes, wearable devices, automobiles and other fields, give full play to business synergy effects, build a stable and efficient marketing model through clear product and market positioning, and form differentiated competitive advantages; firmly implement the development strategy of "endogenous growth" and "exogenous development" simultaneously, rapidly enhance comprehensive competitiveness and innovation capabilities, and achieve sustained, rapid and steady growth in revenue and profits.

*The content of the article represents the author’s personal opinion and does not represent Semiconductor Industry Observer’s agreement or support for that opinion.

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