Purui Semiconductor, a storage chip supplier for Huami, OV, has its IPO on the Science and Technology Innovation Board accepted

On August 3, the Shanghai Stock Exchange officially accepted the Science and Technology Innovation Board listing application of Purui Semiconductor (Shanghai) Co., Ltd. (hereinafter referred to as "Purui Shares").

The prospectus shows that Purui's main business is the design and sales of non-volatile memory chips. Its main products include two types of non-volatile memory chips, NOR Flash and EEPROM, which are general-purpose chips that can be widely used in mobile phones, computers, network communications, home appliances, industrial control, automotive electronics, wearable devices, and the Internet of Things. For example, according to different storage requirements, the company's NOR Flash products are used in low-power Bluetooth modules, TWS headphones, mobile phone touch and fingerprint, TDDI (touch screen), AMOLED (active matrix organic light-emitting diode panel), wearable devices and security chips, and the company's EEPROM products are used in mobile phone camera modules (including 3-D), smart meters, home appliances and other fields.

In the NOR Flash business, Purui has established stable business cooperation relationships with original control manufacturers such as Goodix Technology, Hengxuan Technology, Jier Technology, and Zhongke Bluexun, and mobile phone screen manufacturers such as Shenzhen Tianma, Holitech, and Huaxing Optoelectronics, and its products are used in brand manufacturers such as Samsung, OPPO, vivo, Huawei, Xiaomi, Lenovo, and HP. In the EEPROM business, the company has established stable cooperation relationships with leading mobile phone camera module manufacturers in the industry such as Sunny Optical, O-Film, Q Technology, Truly, Holitech, Samsung Electro-Mechanics, Sanyingxing, and Shengtai, as well as ODM manufacturers such as Wingtech Technology, Huaqin Communication, and Longqi Technology. Its products are widely used in terminal products of well-known manufacturers such as OPPO, vivo, Huawei, Xiaomi, and Midea.

NOR Flash technology relies on Cypress licensing

Purui shares has been focusing on the research and development and application of memory chips. It has 20 authorized patents, including 19 invention patents and 1 utility model patent, and 20 integrated circuit layout designs.

Based on its own intellectual property rights and R&D design platform, Purui shares has excellent design capabilities in both NOR Flash and EEPROM fields, and is one of the few companies in the market that can use the SONOS process platform to complete the R&D and design of NOR Flash memory chips. The company can provide customers with a series of NOR Flash chip products with ultra-low power consumption and fast read and write speed, and a series of EEPROM products with high reliability.

From 2017 to the first quarter of 2020, Purui Co., Ltd. achieved operating income of RMB 77.8011 million, RMB 178.2527 million, RMB 362.9896 million, and RMB 142.0219 million, respectively, with a three-year compound growth rate of revenue of 116.00%. It achieved net profits of RMB 3.7179 million, RMB 13.3737 million, RMB 32.3208 million, and RMB 13.0731 million, respectively, with a three-year compound growth rate of net profit of 194.84%.

Among them, Purui’s R&D investment was RMB 12.9091 million, RMB 13.4579 million, RMB 31.1411 million and RMB 8.5935 million respectively. The cumulative R&D investment amount accounted for 8.68% of the company’s cumulative operating income in the reporting period, and the R&D investment accounted for a high proportion.

Purui Holdings stated that the company's continued investment in research and development has ensured rapid growth in the company's revenue and profits.

It is worth noting that during the reporting period, the revenue of Purui shares' NOR Flash products was RMB 44,713,000, RMB 134,593,100, RMB 254,676,000 and RMB 105,702,800, accounting for 57.47%, 75.51%, 70.16% and 74.43% of the current operating income. The company's NOR Flash products are designed using the SONOS process structure.

The charge-trapped SONOS process structure refers to a MOS transistor structure with an ONO stack as the gate dielectric. It is a storage unit structure of a memory chip. The patent for this process structure is owned by Cypress. After obtaining authorization, chip design companies can conduct secondary research and development. The company selected the SONOS process structure as the storage unit structure of the NOR Flash chip, and conducted NOR Flash product research and development and design on this basis.

At present, based on the SONOS process structure, Purui shares has formed a complete core technology system through years of research and development and technology accumulation. At present, the company has obtained the authorization of Cypress's related processes, and the authorization deadline is December 31, 2028. According to the cooperation authorization agreement signed by the company and Cypress, the authorization is expected to be able to be extended normally after expiration.

Raised 345 million yuan to continue to develop storage chips

Purui shares has decided to apply for an initial public offering of no more than 9,057,180 ordinary shares (A shares) in RMB. The funds raised this time will be invested in flash memory chip upgrade research and development and industrialization projects, EEPROM chip upgrade research and development and industrialization projects, and headquarters base and cutting-edge technology research and development projects.

In the flash memory chip upgrade R&D and industrialization project, Purui shares will adopt the industry-leading process to carry out design research on NOR Flash memory chips, and realize the company's industrialization in the field of advanced process and large-capacity Flash memory chips. The specific products developed by the project include: 40nm NOR Flash series memory chips; NewGen NOR Flash series memory chips. The products of this project will be used in the fields of Internet of Things, Bluetooth, smart wearable devices, fingerprint recognition, smart homes, smart phones, etc.

In the EEPROM chip upgrade R&D and industrialization project, Purui shares will carry out design research on industrial, consumer and automotive EEPROM memory chips to realize the industrialization of the company's EEPROM memory chips in multi-dimensional downstream application fields. The specific R&D products of the project include two parts: First, based on the current technology accumulation, the company plans to upgrade and develop consumer EEPROMs such as mobile phone camera modules and industrial EEPROM memory chips such as smart meters and smart communications to achieve lower operating voltage and lower power consumption; second, the company plans to develop automotive EEPROM products, and through the use of error correction and verification (ECC) and differential storage technology, it has the characteristics of ultra-high erase and write capabilities and ultra-long data retention time.

Purui shares stated that the upgrade and development of flash memory chips is an inevitable choice to improve the company's flash memory chip product layout; the replacement of EEPROM chips will help consolidate the company's leading position in the segment; the headquarters base and cutting-edge technology research and development projects are inevitable measures to solve the company's insufficient experimental and office space problems, which will help the company to break through the original memory chip performance and continue to optimize it based on the existing technology reserves.

Regarding the future development strategy, Purui shares stated that the company will focus on technological innovation in the field of integrated circuit design, centering on the field of non-volatile memory, with NOR Flash and EEPROM as the core, continuously meeting customer demand for high-performance memory chips, realizing the company's technological accumulation in continuous operation, and ensuring the sustainable development of the company's business operations.