Shengmei shares has submitted its IPO registration for the Science and Technology Innovation Board, and plans to raise funds through listing with high R&D investment

On June 10, according to the website of the Shanghai Stock Exchange Science and Technology Innovation Board, Shengmei Semiconductor Equipment (Shanghai) Co., Ltd. (hereinafter referred to as "Shengmei") officially submitted its IPO for the Science and Technology Innovation Board. Shengmei was established in May 2005. The company is mainly engaged in the research and development, production and sales of semiconductor-specific equipment. The company adheres to the development strategy of differentiated competition and innovation. Through its independently developed single-wafer megasonic cleaning technology, single-wafer tank combination cleaning technology, electroplating technology, stress-free polishing technology and vertical furnace tube technology, it provides customized equipment and process solutions to global semiconductor manufacturing, packaging testing and other customers.

After more than 20 years of technological accumulation, ACM Semiconductor has now grown into the "leader" of domestic cleaning equipment. The company's R&D team has successively developed SAPS, TEBO, Tahoe and other world-leading semiconductor cleaning technologies and equipment.

The leading company in the domestic semiconductor cleaning equipment industry

According to the prospectus, Shengmei Co., Ltd. is mainly engaged in the research and development, production and sales of semiconductor-specific equipment. Its main products include semiconductor cleaning equipment, semiconductor electroplating equipment and advanced packaging wet equipment.

Based on independent innovation, Shengmei Co., Ltd. has successfully developed the world's first SAPS/TEBO megasonic cleaning technology and Tahoe single-wafer tank combination cleaning technology through years of technology research and development and process accumulation. It can be applied to the wafer cleaning field of 45nm and below technology nodes, and can effectively solve the problem of cleaning organic contamination and particles after etching, and greatly reduce the use of chemical reagents such as concentrated sulfuric acid, while helping customers reduce production costs and meet the requirements of energy conservation and emission reduction.

With its advanced technology and rich product lines, Shengmei has developed into one of the few semiconductor equipment providers in mainland China with certain international competitiveness. Its products have been recognized by many mainstream semiconductor manufacturers at home and abroad and have gained a good market reputation. The company's main customers are as follows:

The prospectus shows that the global semiconductor cleaning equipment market is highly concentrated, especially in the field of single-wafer cleaning equipment. The four companies DNS, TEL, LAM and SEMES have a combined market share of more than 90%, among which DNS has the highest market share, with a market share of more than 40%.

At present, there are few companies in mainland China that can provide semiconductor cleaning equipment, mainly including ACM Semiconductor, North Huachuang, Xinyuan Micro and Zhichun Technology. Among them, ACM Semiconductor is the industry leader of domestic semiconductor cleaning equipment. Its main products are single-wafer cleaning equipment in the field of integrated circuits, including single-wafer SAPS megasonic cleaning equipment, single-wafer TEBO megasonic cleaning equipment, single-wafer back cleaning equipment, single-wafer brush cleaning equipment, tank cleaning equipment and single-wafer tank combination cleaning equipment, etc., with a relatively rich product line; North Huachuang's main cleaning equipment products are single-wafer and tank cleaning equipment, which can be applied to chip manufacturing with technology nodes of 65nm and 28nm processes; Zhichun Technology has the relevant technology to produce 8-12 inch high-end single-wafer wet cleaning equipment and tank wet cleaning equipment, which can cover the market needs of multiple downstream industries including wafer manufacturing, advanced packaging, and solar energy; Xinyuan Micro's current products are used in the field of single-wafer brush cleaning in the field of integrated circuit manufacturing.

Among the top five semiconductor equipment manufacturers in mainland China in 2018, ACM ranked fourth. The details are as follows:

Continued high R&D investment, IPO raised 1.8 billion yuan

As of December 31, 2019, Shengmei Co., Ltd. had 150 technical R&D personnel, accounting for 41.90% of the company's total employees.

From 2017 to 2019, Shengmei Co., Ltd.'s R&D investment was RMB 52.1724 million, RMB 79.4150 million, and RMB 99.2680 million, respectively, accounting for 13.12% to 20.57% of its revenue.

Shengmei shares stated that the company's megasonic single-wafer cleaning equipment, single-wafer tank combination cleaning equipment and copper interconnect electroplating process equipment have reached international leading or advanced levels. As of December 31, 2019, the company and its holding subsidiaries have 232 major patents that have been granted patent rights, including 108 domestic patents and 124 overseas patents, including 227 invention patents, and have been awarded the title of "Shanghai Integrated Circuit Advanced Wet Process Equipment Key Laboratory"; the company is the main subject unit of major scientific research projects in China's "02 Special Project" such as "20-14nm copper interconnect copper plating equipment research and development and application" and "65-45nm copper interconnect stress-free polishing equipment research and development".

The funds raised from the initial public offering of Shengmei shares will be invested in the following projects after deducting the issuance expenses. The details are as follows: 

The Shengmei Semiconductor Equipment R&D and Manufacturing Center project plans to build a new semiconductor integrated circuit equipment R&D and manufacturing center in the Lingang New Area of ​​Shanghai. The project implementation entity is Shengwei Shanghai, a wholly-owned subsidiary of the company. It plans to build 2 production plants, 1 auxiliary plant, 2 R&D buildings, and related supporting facilities such as chemical warehouses. The project will be put into use in 2023, and the company's entire production capacity will be transferred to the new R&D and manufacturing center, laying a solid foundation for the company's future rapid development.

ACM Semiconductor's high-end semiconductor equipment R&D project is to further develop, upgrade and innovate the company's existing or future major products and core technologies. Aiming at the development of cleaning technology for future 14nm and below technology nodes, it will invest in seven major technical directions, including technical improvement and R&D of TEBO megasonic cleaning equipment, technical improvement and R&D of Tahoe single-wafer tank combination cleaning equipment, and technical improvement and R&D of backside cleaning equipment.

Regarding the company's development strategy, Shengmei shares stated that since its establishment, the company has always focused on the field of semiconductor special equipment, focusing on the field of large-scale high-end integrated circuit wet and dry equipment products, and providing customers with a series of integrated circuit equipment products and services. The company has always adhered to the differentiated competition and innovative R&D strategy, and has formed a series of technical accumulation through independent research and development; relying on an international talent team, it continues to cultivate and build a first-class R&D team to attract high-end professional talents at home and abroad; through the continuous introduction of differentiated new products and new technologies with international leading levels, the company's core competitiveness is enhanced; through strong domestic and international market development, the market share is increased; while maintaining a reasonable gross profit margin, the company's revenue scale is expanded to create value for customers and shareholders.