Yachuang Electronics: IC business sales are expected to reach 200 million yuan this year and increase by 80% annually in the next three years

Recently, Yachuang Electronics said in an institutional survey that more than 80% of the company's distribution business customers are domestic customers, covering well-known terminal car manufacturers (such as Geely, Great Wall, Changan, BYD, FAW, Volkswagen, etc.), and the initial customer groups of the IC business were Hyundai and Kia in South Korea. At that time, the domestic market was blank, and with the help of distribution business resources, it began to expand the domestic market in 2020.

In 2021, the average product gross profit margin of Yachuang Electronics' IC products will basically remain between 38% and 40%, and the gross profit will not change significantly in the short term. At present, expanding market share is still the primary strategic goal.

Yachuang Electronics said that the products that the company has shipped or is developing are all power management chips, with motor driver chips, LED driver ICs, DC-DC, and LDO as the core products. With the current design progress of the R&D team, the company will give priority to developing categories in areas where it is good at. If a large number of designers join, other product plans will be considered, and the general direction will still focus on the automotive electronics field.

According to data from a third-party agency, the market space for automotive power management chips in China is approximately RMB 15 billion to 20 billion, but currently the main market participants in automotive power management ICs are still mainly European and American companies, which occupy more than 80% of the market share, such as TI, NXP, Infineon, etc. In addition, Japanese, Korean, and Taiwanese companies also occupy a certain share, while domestic companies account for a relatively small proportion.

Yachuang Electronics' goal is to achieve a 10% market share in the domestic automotive power management chip market through continuous efforts in the next 3-5 years. The company said that the automotive market is relatively special. Through long-term accumulation, international giants have high brand awareness and high market share, forming a monopoly phenomenon. The company has been deploying automotive-grade chips. Under the favorable conditions of the chip shortage and import substitution policy in 2021, some of the company's chips have been promoted in mainstream car manufacturers and gradually achieved mass production. Taking advantage of this opportunity, the company will introduce products into vehicle model projects to consolidate market share and strengthen in-depth cooperation with customers.

Regarding the company's estimated sales and product distribution of IC products in 2022, Yachuang Electronics said that judging from the current supply of raw materials and orders on hand, sales have increased significantly, and it is expected to achieve sales of RMB 200 million. LED driver ICs, HVAC driver ICs, headlight dimming motor product driver ICs, and rearview mirror folding ICs account for more than 80% of IC product sales.

Yachuang Electronics said that based on the current base, the company's internal performance target is to increase IC business sales by 80% annually in the next three years. In terms of capacity supply, the two wafer manufacturers that Yachuang Electronics currently cooperates with have a relatively stable cooperative relationship and are very supportive of the company's automotive-grade capacity, which can meet the sales in 2022 and the performance target growth rate in the next two years. The packaging plant has sufficient capacity.