National Technology: Strong demand and severe shortages, the company's sales revenue may increase quarter by quarter

Recently, National Technical said in an institutional survey that as the upstream production capacity acquired by the company is gradually released and products are gradually returned, the company's sales revenue is expected to grow quarter by quarter.

At present, the company mainly adjusts product prices in light of market factors and the increase in raw material costs, so as to keep the company's gross profit margin within a reasonable range. As the shortage is a common situation in the industry, the company pays more attention to the long-term and hopes to establish a long-term friendly and mutually supportive strategic cooperative relationship with its partners.

It is understood that National Technology and most of its competitors are also facing a shortage of production capacity. We will strive to obtain more production capacity through active communication with upstream foundries, and strive to increase next year's production capacity based on this year's production capacity.

Regarding MCU, National Technology said that last year was the first year of MCU market sales, and it was also in the cycle of the company's replacement of old and new products, and the overall sales volume and sales amount were not high. In the first half of this year, the overall sales volume and sales amount of MCU increased, but due to the limited upstream production capacity obtained by the company in the first half of this year, the current revenue share is not representative. It is expected that MCU products will account for more than 60% of the company's chip business revenue in the future. The company's MCU product application areas mainly cover industrial control, consumer electronics, battery and energy management, motor drive, medical electronics, automotive electronics, smart home appliances and smart home IoT terminals and other application areas and directions.

According to the feedback from the clients, the demand is still strong and the shortage is serious. However, the current production capacity of National Technology is still lower than the demand of customers, and the demand is still increasing. The company expects to maintain the current price in the near future, and will make dynamic adjustments in the future depending on cost changes and market demand.

National Technology revealed that the process technology of the company's MCU products mainly includes 40nm, 90nm, and 55nm. The company has different products with different processes at TSMC, Shanghai Huahong Grace Semiconductor, and UMC. The M7 core MCU is planned to adopt 22nm or 28nm process technology, which can be mainly used in industrial control, energy control, industrial application graphics and image processing and other markets, and is expected to be put into production next year.

It is reported that the main customers of National Technology's MCU are small and medium-sized customers, and the sales share of small and medium-sized customers should also be larger in the future. The company adopts a direct sales model for key customers, and mainly adopts an agent model for small and medium-sized customers; the company has entered some iconic customers, such as Huawei, DJI, and CATL.

In terms of technological advantages, in the MCU product market, international chip manufacturers account for the vast majority of products, and there are also a number of domestic chip companies selling MCU chips. National Technology chose this track mainly after comprehensively considering its own products, technical foundations and R&D capabilities. Compared with competing products, it can be said that each has its own characteristics. The characteristics of the company's MCU products can be summarized as follows: (1) Wide product line and high coverage. The more than 80 models currently on sale and several product platforms that will be completed in the next two years will cover most application scenarios of 32-bit MCUs from low-end to high-end, better meeting customers' different product needs. (2) Low power consumption. (3) Some of the company's products use 40nm advanced process technology. (4) With security functional attributes.

In terms of production cycle, National Technology said that the production cycle of chip products with different processes and packaging is different. Due to the current tight supply chain in the upstream of the integrated circuit industry, the current delivery cycle ranges from 4 to 6 months.

In addition, regarding TSMC's price increase, National Technical said that the price increase of upstream foundries has a certain impact on the company's costs, and the company will dynamically adjust prices based on future cost changes and market demand.

At present, the company mainly enters the aftermarket, and introduces and applies in batches in the automotive electronics aftermarket such as body control, automotive lighting, smart cockpit, and automotive power supply. The company has also made progress in the automotive MCU original equipment market. The company will continue to expand its application areas based on the needs of the automotive market and the development trend of the industry.

Benefiting from the strong demand in the downstream lithium battery market, the sales orders and revenue in the negative electrode material field of National Technology Snow have increased significantly compared with the same period last year. The overall business trend has improved and it has entered a benign and healthy development stage. The second graphitization production line invested and built by Snow in Inner Mongolia in the early stage has officially started trial production in June this year. The annual production capacity of graphitization will reach more than 20,000 tons after it is officially put into production.