The only Chinese player to enter the international mainstream server - Lanqi Technology

The star companies among the companies accepted by the Science and Technology Innovation Board are going to the meeting! Yesterday evening, Montage Technology, known as "China's most powerful integrated circuit design company", received a notice to go to the meeting. The Shanghai Stock Exchange disclosed that the Science and Technology Innovation Board Stock Listing Committee is scheduled to hold the 3rd Listing Committee Review Meeting on June 13 to review the issuance applications of Montage Technology and three other companies.

　　How powerful is Montage Technology? Chen Hang, an analyst at Southwest Securities, said in a report that Montage Technology is "the only Chinese core chip supplier that has entered the international mainstream server field." A senior investor in the chip field told the Shanghai Securities News that Montage Technology is indeed a rare and excellent scientific and technological innovation company. It is not only a global leader in its niche, but also one of the setters of international standards.

　　Montage Technology's technical strength has been transformed into commercial benefits. According to the prospectus, with its leading technology level, the company has gradually established an industry-leading advantage in the DDR4 stage. In 2018, the company achieved operating income of 1.758 billion yuan, net profit of 737 million yuan, and gross profit margin of more than 70%.

　　Global standard setter for memory interface chips

　　In the view of many semiconductor industry experts interviewed by Shanghai Securities News reporters, this is a company that can truly compete with world-class international companies and has already gained a leading edge.

　　Lanqi Technology's main business is to provide chip-based solutions for cloud computing and artificial intelligence. Its main products include memory interface chips, Jintai server CPUs, and hybrid security memory modules. The company's current core business, memory interface chips, build a "highway" for data exchange between the CPU and memory to increase memory data read and write bandwidth and improve server performance.

　　This is a sub-industry with extremely high technical barriers. It is understood that at present, the main manufacturers engaged in the research and development and mass production of server memory interface chips worldwide are Montage Technology, IDT and Rambus. Among them, Montage Technology and IDT have relatively obvious advantages, with global market shares close to 50%. The prospectus explains that due to the high concentration of the downstream DRAM market, Samsung, Hynix, Micron and other three giants occupy more than 90% of the market share. By covering these super customers, Montage Technology has achieved a high market share.

　　The real rise of Lanqi Technology is due to the "1+9" distributed buffer memory subsystem framework invented by the company, which broke through the centralized architecture design of DDR2 and DDR3, was adopted as an international standard by JEDEC, and became the standard design of DDR4LRDIMM. It not only highlights the company's technical level and innovation ability, but also enhances my country's international voice in related fields.

　　According to inquiries, the "1+9" distributed system innovatively adopts a distributed structure layout with 1 register buffer controller as the core and 9 data buffer chips, which greatly reduces the load between CPU and DRAM particles, reduces signal transmission loss, and solves the contradiction between large capacity and high speed of the memory subsystem. Compared with the traditional memory bar architecture, Lanqi's innovative architecture allows data signals in the memory to have short routing, light load, and low latency, while maintaining signal integrity, high data bandwidth, and dispersed chip power consumption and good heat dissipation.

　　"The chip architecture has been adopted as an international standard, which not only rewrites the era of "no core" in my country, but also wins Chinese "core" the right to speak and the initiative for future innovation in this field." A semiconductor industry insider commented, not sparing any words of praise.

　　70% of employees are engaged in R&D, and gross profit increases year by year

　　Why can Montage Technology be a global leader? High investment in R&D is one of the key factors. According to the prospectus, from 2016 to 2018, the company's R&D expenses were 198 million yuan, 188 million yuan and 277 million yuan, respectively, accounting for 23.46%, 15.34% and 15.74% of revenue, respectively.

　　Like many high-tech companies, Lanqi Technology has gathered a group of top talents in the semiconductor industry, and its R&D team is star-studded.

　　According to the prospectus, as of December 31, 2018, Lanqi Technology had a total of 181 R&D personnel, accounting for 70.98% of the total number of employees. According to the level of education, Lanqi Technology has 110 employees with a master's degree or above, accounting for 43.14%. In terms of core technical personnel, the company has a group of "industry experts" such as Yang Chonghe, Shangang, Chang Zhongyuan, and Shi Gang.

　　The founder of Montage Technology, Yang Chonghe, is known in the industry as the "No. 1 chipmaker in mainland China". He is also the chairman and CEO of the company since its founding. It is disclosed that as the founder of Montage Technology, Yang Chonghe has extensive experience in the semiconductor industry. After returning from overseas studies, Yang Chonghe and his colleagues co-founded Xintao Technology, which merged with IDT in 2001 and later founded Montage Technology.

　　Lanqi Technology also has a group of semiconductor "veterans". Specifically, the head of the company's market application technology department, Shangang, has worked in ZTE Shanghai Research Institute and Xintao Technology. Chang Zhongyuan, the head of the company's R&D department, has a doctorate degree and has worked as a senior IC design engineer at Alcatel Bell Belgium, vice president of IDT, and chief technology officer of Shanghai Belling. Shi Gang, the head of the operations department, has worked in Fudan Microelectronics and Shanghai Advanced Semiconductor.

　　Montage Technology has a very good gross profit margin, and in recent years, there has been a trend of a sharp increase in gross profit margin. According to disclosures, Montage Technology's gross profit margins from 2016 to 2018 were as high as 51.20%, 53.49% and 70.54% respectively, and the gross profit margin has increased by 19 percentage points in three years.

　　Core technologies are also gradually being transformed into benefits. According to the prospectus, from 2016 to 2018, Lanqi Technology's operating income was 845 million yuan, 1.228 billion yuan, and 1.758 billion yuan, respectively, with an average annual compound growth rate of 44.23%; net profits were 92.8 million yuan, 347 million yuan, and 737 million yuan, respectively, with a very rapid increase.

　　Backed by CEC and joined hands with Tsinghua University to enter AI

　　Lanqi Technology was previously listed on NASDAQ, but due to various reasons, the company delisted from NASDAQ on November 19, 2014.

　　The company that led the privatization of Montage Technology was Pudong Science and Technology Investment. A person involved in the transaction told the reporter of Shanghai Securities News that an important reason for the privatization was the high recognition of Montage Technology and Yang Chonghe personally. "Mr. Yang is a compound talent, with the temperament of a scientist, entrepreneur and cultural person. He has a strategic vision, so Montage can avoid the red ocean; he has the thinking of a scientist, so Montage's technical level can stand out; he has an entrepreneurial spirit, so the company's development can flourish."

　　The equity structure shows that the largest shareholder of Lanqi Technology is China Electronics Investment Holding Co., Ltd., a subsidiary of China Electronics, holding 15.904% of the shares, and its affiliated company Jiaxing Xinde holds 2.078% of the shares.

　　In the opinion of industry insiders, with the support of China Electronics (CEC) and by "filling the gaps" in CEC's chip and server layout, Lanqi Technology's future development prospects are even more worth looking forward to.

　　Montage Technology has deeply involved in the field of artificial intelligence and has formed an alliance with Tsinghua University. According to the prospectus, the company cooperated with Intel and Tsinghua University in 2016 to develop the Jintai R series server CPU. The Jintai R server platform built on the Jintai R CPU and Montage Technology's hybrid security memory module realizes chip-level real-time security monitoring functions, which can not only provide a safer and more reliable computing platform for cloud computing data centers, but also provide powerful comprehensive data processing and computing power support for various applications in the era of big data and artificial intelligence.

　　Regarding its three-year development plan after listing, Lanqi Technology stated that in the memory interface chip business field, it will complete the research and development and industrialization of the first-generation DDR5 memory interface chip; in the data center business field, it will continue to improve the Jintai server CPU and its platform, increase market share, and expand new business growth points such as artificial intelligence.