This quarter, the profitability of China's semiconductor testing companies has further improved. Among the Chinese mainland enterprises that have entered the top ten global semiconductor testing revenue rankings, Tongfu Microelectronics and Tianshui Huatian have seen their net profits double, and ChangJiang Electronics Technology's revenue for the first three quarters has exceeded that of the entire year 2020. The prosperity of China's semiconductor testing industry continues to rise.
Dual Drivers of Demand and Structure
The double growth in revenue and profit is a key theme in the quarterly reports of the top semiconductor testing companies in China this quarter. Specifically, ChangJiang Electronics Technology reported revenue of 8.1 billion yuan, up 19.3% year-on-year, with net profit of 790 million yuan, setting a new record for the same period. Tongfu Microelectronics reported revenue of 4.114 billion yuan, up 49.60% year-on-year, with net profit of 302 million yuan, up 101.03% year-on-year. Tianshui Huatian reported revenue of 3.248 billion yuan, up 47.49% year-on-year, with net profit of 415 million yuan, up 130.22% year-on-year.
Behind the growth in performance, there are two main drivers: the increase in downstream market demand and the improvement of the company's product structure.
The optimization of the product structure will improve product gross margin and net profit performance. ChangJiang Electronics Technology's CEO Zheng Li stated that since the second half of 2021, the company's domestic and overseas factories have continued to optimize large-scale mass production technology and production and operation efficiency, and have continuously expanded the investment in research and development and innovation of advanced technologies.
The pull effect from hotspot applications such as 5G construction, consumer electronics, and automotive electronics has kept the capacity utilization of packaging and testing companies at near full capacity.
Tongfu Microelectronics stated in its third-quarter performance forecast that in the third quarter of 2021, influenced by factors such as the accelerated global development of intelligence, the increase in demand for electronic products, and other factors, the company's international and domestic customer orders maintained a strong momentum. The company's business in high-performance computing, 5G, storage, consumer electronics, power devices, industrial and automotive electronics, and display drivers continued to expand. The company's orders are full, and its revenue scale and operating performance continue to maintain a growth trend.
Huatian pointed out in its third-quarter performance forecast that influenced by factors such as the acceleration of 5G construction, the increase in demand for consumer electronics and automotive electronics, and other factors, the market demand for integrated circuits continues to be strong, and the company's orders are full. The business scale continues to expand.
"Overall, the factors contributing to the improvement in the net profit performance of packaging and testing companies include strong demand from domestic and foreign customers, full orders, and high capacity utilization, which effectively reduces costs through large-scale production. At the same time, the adjustment of the product structure ratio has increased the proportion of products with higher gross margins." Yang Jungang, a senior analyst at the Integrated Circuit Industry Research Center of CCID Consulting, told China Electronics News.
Advanced Packaging as a Growth Point
Traditional packaging mainly uses insertion, surface mount, and other planar, 2D integration technologies. With the increasing demand for performance, speed, and miniaturization of processors, advanced packaging technologies such as flip chip, 2.5D/3D packaging, wafer-level packaging, and Sip (System in Package) are gaining momentum.
Advanced packaging has improved the integration density and interconnection speed of chip products, reduced design thresholds, and optimized the flexibility of function matching. For example, flip chip connects the chip to the substrate, shortening the interconnection length and achieving enhanced chip performance and improvements in heat dissipation and reliability. Sip integrates different chips or modules in a layout or stacked manner into a single packaging component, thereby enhancing the integration of chips and the flexibility of function integration, and shortening the product launch cycle.
Advanced packaging has become the main driving force for the iteration of packaging technology.
"At this stage, most packaging technology development is focused on the field of advanced packaging, such as 2.5D/3D IC packaging required for high-performance computing chips and servers, SiP that integrates chips of different dimensions and line widths, and FOPLP (panel-level packaging) that can