MEMS business is booming with both production and sales, and SMIC's Q1 net profit increased by 398.5% year-on-year

On April 27, Saiwei Semiconductor released its Q1 performance report, stating that the company achieved operating income of 199 million yuan, a year-on-year increase of 23.96%; the net profit attributable to shareholders of the listed company was 34.0807 million yuan, a year-on-year increase of 398.50%.

Saiwei Semiconductor said that the company's main business of MEMS (microelectromechanical systems) process development and wafer manufacturing has global competitive advantages. It has a team of top experts and engineers in the industry and a continuously expanding 8-inch mature production capacity. It has grasped the market opportunities in downstream biomedicine, communications, industrial automobiles, consumer electronics and other application fields well. It has full orders, strong production and sales, and continues to maintain strong profitability.

At the same time, the company divested its avionics and part of its navigation businesses in 2020, and during the reporting period, the company appropriately controlled the cost and expense expenditures of the navigation business subsidiary that it plans to divest, and the impact of seasonal losses on the company's original special electronics business was significantly reduced; in terms of investment business, the company's equity-holding funds and equity-holding subsidiaries achieved profitability as a whole, and the company realized profits from the exit of some investment projects. 

In addition, in order to seize market opportunities, Saiwei Semiconductor increased the recruitment of semiconductor business personnel and continued to increase its continuous investment in its core business MEMS and potential business GaN (gallium nitride), and related R&D, management and sales expenses increased; at the same time, the company has successively obtained a series of government subsidies in recent years, some of which compensated for part of the related costs or losses during the reporting period.

In March this year, the "Outline of the 14th Five-Year Plan for National Economic and Social Development of the People's Republic of China and the Long-Term Goals for 2035" listed integrated circuits as one of the frontier areas of science and technology, including the research and development of key materials such as integrated circuit design tools, key equipment and high-purity targets, breakthroughs in advanced integrated circuit processes and special processes such as insulated bipolar transistors (IGBTs) and microelectromechanical systems (MEMS), upgrades in advanced storage technologies, and the development of wide bandgap semiconductors such as silicon carbide and gallium nitride.

Saiwei Microelectronics' MEMS and GaN businesses both belong to forward-looking, strategic sub-industries encouraged and supported by the state. The company's MEMS process development and wafer manufacturing capabilities are world-leading (ranked first in the world in 2019, ahead of well-known manufacturers such as TELEDYNE DALSA, SONY, TSMC, and X-FAB). On the basis of more than 20 years of long-term operation, it continues to accumulate advanced manufacturing processes and expand the scope of customers and industries it serves. It has strong production and sales, outstanding profitability, and continues to expand its advanced 8-inch production capacity in the MEMS field in Stockholm, Sweden and Beijing, China. The company's GaN epitaxial material growth and device design technology are industry-leading, with both R&D and engineering practice experience. So far, it has signed a GaN epitaxial wafer bulk sales contract with its partners, and GaN devices have begun to enter the mass production stage (commissioned to external units for production), and is carrying out an independent, controllable, fully localized, and sustainable expansion of the entire industry chain IDM (vertically integrated manufacturing) layout.

Therefore, based on the overall long-term positive development trend of the sub-industry and the country's long-term strategic policy support, Saiwei Semiconductor's main MEMS and GaN businesses have good development prospects.