Sales of AMOLED display driver chips increased more than 2 times Zhongying Electronics' revenue and net profit both increased last year

According to Jiwei.com news, on March 31, Zhongying Electronics released its 2020 performance report, stating that the company achieved operating income of 1.012 billion yuan, a year-on-year increase of 21.35%; the net profit attributable to shareholders of listed companies was 209 million yuan, a year-on-year increase of 10.61%.

Zhongying Electronics stated that in the first half of 2020, affected by the epidemic, the company's terminal markets for household appliances and kitchen appliances, motor control, computer peripherals and the Internet of Things performed well against the trend, while demand for other products was relatively weak. In the second half of the year, thanks to the rapid and proper control of the domestic epidemic, the demand for the company's main product lines generally surged, but the overall industry supply chain showed a phenomenon of insufficient production capacity, resulting in a shortage of the company's products. The industry's supply chain has insufficient production capacity. The main reason is that the demand for 5G applications, smart cars, mining machines, multi-camera mobile phones, remote classrooms and various intelligent and high-end products has increased, consuming more wafers, and in recent years, the expansion rate of wafer fabs has lagged behind the growth of consumer demand for wafers; at the same time, affected by the epidemic, the global semiconductor supply chain has experienced periodic and structural imbalances.

Currently, SinoWise's main product lines are microcontroller chips for industrial control and OLED display driver chips. Although the company faces the difficulty of obtaining sufficient production capacity, its AMOLED display driver chip sales still grew more than 2 times in 2020, and its lithium battery management chip sales grew more than 50%. Most of its other major product lines showed growth.

In terms of R&D, SinoWing Electronics mainly focuses on the development of new products of existing industrial control MCU chips and OLED display driver chips, accelerates investment in IIOT R&D, and continuously prepares related technologies for automotive electronics in the long term. In 2020, SinoWing Electronics continued to increase investment in core technology innovation, with R&D investment reaching RMB 172.78 million, accounting for 17.07% of operating income, a year-on-year increase of 27.56%, striving to ensure the advancement of the company's technology.

At present, SinoWing Electronics' 32-bit ARM core home appliance control chip product has been developed. The chip focuses on the main control MCU and display control MCU of cost-effective white appliances, and some customers have already started project development and design. At the same time, the home appliance control chip is also actively preparing to launch a 55nm high-end process product, which has now entered the research and development stage and is expected to be completed in the second half of 2022.

The 32-bit ARM core products launched by the motor product line have entered mass production for inverter refrigerator applications, inverter air conditioner customers are in small-scale production testing, and inverter washing machines are in the process of developing solutions in cooperation with customers. The company is preparing to launch new products for upgrading electric bicycles and exporting electric motorcycle controllers, which are expected to be launched in the market in 2021. In addition, its new WiFi products are under development and are expected to be launched in the market by the end of 2021.

It is worth mentioning that while launching full-system products with technical and cost advantages, SinoWing Electronics has accumulated a large number of intellectual property patents. During the reporting period, the company and its subsidiaries obtained 15 invention patent authorizations, demonstrating the company's continued innovation capabilities. As of the end of 2020, the company and its subsidiaries held a total of 104 valid invention patents at home and abroad.

Looking ahead, Zhongying Electronics said that the overall industry chain is currently in a state of undersupply, and the company expects that the tight supply chain will continue in the next reporting period. Due to the surge in orders for the company's home appliance main control chips and the lack of delivery for some time, the new production capacity that the company has strived for in the short term is still unable to digest customer order demand, but it is expected to improve quarter by quarter. For lithium battery management chip products, since the production capacity layout has been actively increased in advance, and the products are expected to increase rapidly in the brand mobile phone and wearable application markets, the sales growth rate is expected to be better than that of home appliance main control chips, but it is still limited by insufficient production capacity. The company's AMOLED display driver chip product technology has been verified by the market, and it is expected that as the process rate of downstream screen factories is improved, the future product market space will be broader; since a certain production capacity has been obtained in advance, sales are expected to have more than multiple growth opportunities.