Tagged: SMIC

Hundreds of Billion Stars Company’s song ends?

Yangchun arrives in March as scheduled, but Wuhan Hongxin Semiconductor Manufacturing Co., Ltd. (hereinafter referred to as Wuhan Hongxin), which is in trouble, seems to be still experiencing a cold winter.

Recently, it was reported that Wuhan Hongxin’s senior management informed the internal group that “the company has no plan to resume work and resume production” and required all employees to apply for resignation before leaving get off work on February 28, 2021.

Hundreds of Billion Stars Company's song ends?

According to Qixinbao’s data, after a series of changes, Wuhan Hongxin’s shareholders are currently Wuhan Xingong Technology Development Co., Ltd. and Wuhan Lingkong Port Economic and Technological Development Zone Technology Investment Group Co., Ltd. After equity penetration, the above two companies are controlled by state-owned assets in Dongxihu District, Wuhan.

After the government takes over, how will it deal with this “hot potato”? Is the news of the employee being dismissed true? Does this mean the dissolution of Wuhan Hongxin? On February 28, 2021, a reporter from the “Daily Economic News” came to the Wuhan Hongxin project site and saw that the original signboard with the 13 characters “Wuhan Hongxin Semiconductor Manufacturing Co., Ltd.” had been removed. A Wuhan Hongxin subcontractor told reporters, “It is disbanded and there will be no Hongxin anymore.”

Regarding related matters, on February 28, a reporter from the “Daily Business News” called Wuhan Hongxin’s official telephone number many times, but the calls were all unanswered. On the Wuhan city message board, in response to citizens’ questions about Wuhan Hongxin, the Dongxihu District of Wuhan City’s latest reply on February 8, 2021 (that is, before the Spring Festival) was “The project is being coordinated.”

Site visit: the original Wuhan Hongxin signboard has been removed

Hundreds of Billion Stars Company's song ends?

With an investment of up to 128 billion yuan, it was once launched as a star project in Wuhan and invited Jiang Shangyi, a man in the semiconductor industry who had served in TSMC and SMIC, as the general manager… The once glorious Wuhan Hongxin has now ended up in a feather.

The semiconductor industry information website Jiwei.com reported on the information provided by people familiar with the matter that Wuhan Hongxin’s senior executives notified in the internal group: “Combined with the current situation of the company, the company has no plan to resume work and production. After the company’s research and decision, all employees are requested to do so in 2021. Apply for resignation before the end of work on March 28, and complete the resignation procedures before the end of work on March 5, 2021; leave personnel can apply online.” In response to the above news, the reporter called the company’s official telephone number and several local government department telephone numbers , And went to the scene to inquire, but did not obtain the exact information. On March 1, 2021, a reporter from the “Daily Economic News” called the Propaganda Department of Dongxihu District, Wuhan. The staff said that we did not know about this and did not receive any news. When the reporter asked further, the other party said, “It (Wuhan Hongxin) is in our jurisdiction, but we don’t have any caliber to release it.”

According to previous media reports, under the endorsement of Jiang Shangyi, a large number of engineers came here, and Wuhan Hongxin did not hesitate to double the salary to retain talents. The report also said that among the engineering team, there were a lot of 3 million yuan and 5 million yuan (annual salary). During the peak period, the number of employees in Wuhan Hongxin once expanded to more than 400.

The current number of employees of Wuhan Hongxin is not known. According to the 2019 annual report of Wuhan Hongxin disclosed by the National Enterprise Credit Information Publicity System, the number of employees who paid five insurances at that time was 203.

Facade of Wuhan Hongxin Semiconductor Project Photo source: Photo by reporter Zhang Mingshuang
Is the news of the dismissal of employees true? Does this mean that Wuhan Hongxin is completely dissolved? What is the current situation of Wuhan Hongxin? In order to find out, on the afternoon of February 28, 2021, a reporter from “Daily Business News” came to the site of Wuhan Hongxin Project and saw that the entrances and exits of multiple construction sites had been closed, and the side of the project adjacent to Wangan Avenue was the main entrance of the construction site. , Looking inward from the gate, no one can be seen. When the reporter visited the project on September 3 last year, although the project was in a state of suspension, some people still entered and exited the site.

A large number of vehicles are parked in the office area of ​​Wuhan Hongxin Project in September 2020. Photo source: Photo by reporter Zhang Mingshuang
A security guard at the gate prevented the reporter from entering the construction site. When the reporter asked about the situation of Wuhan Hongxin, the security guard said that there was no Wuhan Hongxin inside, and there was no one on the construction site. Regarding whether Wuhan Hongxin has disbanded employees, it said that he has just arrived and does not know the relevant situation.

Wuhan Hongxin built a prefab house with a red roof and white walls on the side of Linchuanggu Road of the project as the company’s office space. The reporter saw in the office area that there was no car parked in the parking lot at the door, and the door sign composed of 13 characters of “Wuhan Hongxin Semiconductor Manufacturing Co., Ltd.” had been removed.

In the office area of ​​Wuhan Hongxin Project, the signboard at the door has been removed. Photo source: Photo by reporter Zhang Mingshuang
In the office room, a suspected front desk staff member asked the reporter not to enter the office area. The reporter asked whether he was an employee of Wuhan Hongxin, but the staff did not answer. There is a self-service vending machine in the office, but there is no word related to Wuhan Hongxin, and the posted epidemic prevention and control notice also does not indicate the signing party.

When the reporter was visiting the project, only a few security guards were walking around inside and outside the project. The above-mentioned security guards came again and asked the reporter to leave quickly, but they refused to disclose their work unit or service unit.

On February 28, Mr. Zhao (pseudonym), a construction subcontractor of the Wuhan Hongxin project, told reporters that the employees of Wuhan Hongxin have been disbanded and there will be no Hongxin company anymore. The new (shareholder) company is planning to resume work. , But there are other plans for continuing to do semiconductor projects, and it is still unclear.

According to Mr. Zhao, Wuhan Hongxin started to default on the project payment in 2020, (the subcontractor) could feel that the company basically couldn’t stick to it. After inquiring about the information from the company’s internal staff, it was found that the employees were also distracted. Before the Spring Festival of the Year of the Ox, Mr. Zhao also went to Wuhan Hongxin site, and there were dozens of people in the project department. But Mr. Zhao found that everyone was ready to go their separate ways.

There has been some progress in subcontract payment. At present, Mr. Zhao has received about 80% of the subcontract payment, and the remaining project payment will be settled in the second half of this year.

The government department previously replied: the project is being coordinated and promoted

Since July 2020, the government of Dongxihu District of Wuhan City “exposed” Wuhan Hongxin’s capital fracture, which has attracted public attention for more than half a year. During this period, the company has successively experienced changes in personnel and shareholders.

According to Qixinbao’s data, Jiang Shangyi no longer serves as the director and general manager of Wuhan Hongxin. He also issued a statement through his lawyer, claiming that he had resigned from all positions in Wuhan Hongxin due to personal reasons in June 2020, and Wuhan Hongxin had also accepted Jiang Shangyi’s resignation. At present, Jiang Shangyi has returned to SMIC again-in early February 2021, SMIC announced that Jiang Shangyi served as the company’s vice chairman.

Another aspect of Wuhan Hongxin’s changes is the shareholders. In November 2020, Wuhan Xingong Technology Development Co., Ltd. (hereinafter referred to as Wuhan Xingong) replaced the original Beijing Guangliang Blueprint Technology Co., Ltd. and Wuhan Lingkong Port Economic and Technological Development Zone Industrial Development Investment Group Co., Ltd. and became the sole shareholder of Wuhan Hongxin.

By the end of December 2020, Wuhan Xingong’s shareholding has been reduced to 90%, and the other 10% is held by Wuhan Lingkong Port Economic and Technological Development Zone Technology Investment Group Co., Ltd. However, after the equity penetration of the above two shareholders, they were all controlled by the State-owned Assets Supervision and Administration Bureau of the People’s Government of Dongxihu District, Wuhan City. In other words, the state-owned assets of Wuhan Dongxihu have fully taken over Wuhan Hongxin.

So, for the current situation of Wuhan Hongxin, what are the plans of Wuhan Dongxihu District government departments? On February 28, the reporter of “Daily Economic News” saw that Wuhan Hongxin’s official website could no longer be opened. According to the company phone number in the historical snapshot of the webpage, the reporter made multiple calls and no one answered it.

Judging from public information, Wuhan Hongxin is currently entangled in lawsuits and has caused the company’s assets to be frozen. Specifically, in addition to the previously new ASML scanning lithography machine that has not been activated because of the 582 million yuan debt, a civil ruling published by China Judgment Document Network in October 2020 shows that because Shengpin Precision Gas (Shanghai) In the dispute over the sale and purchase contract between the company and Wuhan Hongxin, the People’s Court of Dongxihu District, Wuhan City, Hubei Province ruled to freeze 15.31 million yuan in deposits in Wuhan Hongxin Bank, holding 5% of the equity of a company, and a factory in Wuhan Hongxin.

Image source: Screenshot of Judging Document Network
However, the reporter saw on a recruitment website that just after the Wuhan Hongxin thunderstorm, Wuhan Hongxin was still recruiting in August 2020, and the date of the latest recruitment position was shown as October 16, 2020.

For the future of Wuhan Hongxin, what plans does Wuhan Dongxihu state-owned assets have? On the Wuhan city message board, some citizens also asked about Wuhan Hongxin issue. The latest reply from Dongxihu District of Wuhan City on February 8, 2021 stated that “the project is being coordinated.”

Integrated Circuit Industry: Two Days of Ice and Fire

The thunderstorm in Wuhan Hongxin triggered the concern of relevant departments on investment chaos. In October 2020, the National Development and Reform Commission spokesperson Meng Wei once stated that the National Development and Reform Commission will focus on four areas of work in the next step: one is to strengthen the service and guidance for the construction of major integrated circuit projects, and to do a good job in planning and layout; the second is to speed up implementation Several policies to promote the high-quality development of the integrated circuit industry and the software industry in the new era should promptly introduce supporting measures; the third is to establish a long-term working mechanism of “early combing, early detection, early feedback, and early disposal” to reduce investment risks in major IC projects ; Fourth, in accordance with the principle of “who supports and who is responsible”, those who cause major losses or trigger major risks shall be notified and held accountable.

The integrated circuit industry is still a key industry supported and encouraged by the state. On February 26 this year, at a press conference held by the State Council Information Office, Minister of Science and Technology Wang Zhigang pointed out that the integrated circuit industry is an important foundation for the high-quality development of China’s economy. , It must be the focus of China’s R&D, including scientific and technological work.

According to statistics from the China Semiconductor Industry Association, from January to September 2020, China’s integrated circuit industry sales amounted to 590.58 billion yuan, a year-on-year increase of 16.9%. This growth rate is more than twice the global rate during the same period. In addition, data from the General Administration of Customs shows that in 2020, the value of my country’s imported integrated circuit products is as high as 350.036 billion U.S. dollars, an increase of 14.6% year-on-year; the value of semiconductor manufacturing equipment imported during the same period is 25.351 billion U.S. dollars, an increase of 15.4% year-on-year.

What is the current development situation and industry situation of China’s integrated circuit companies? As a leading domestic integrated circuit manufacturing company, at an investor relations event on February 5, 2021, Zhao Haijun, the co-CEO of SMIC, said that the integrated circuit industry in 2020 can be described as “two days of ice and fire.” On the one hand, the “home economy” triggered by the epidemic has strengthened people’s demand for the Internet of Everything. Chip consumption has far exceeded expectations, and semiconductor companies in various countries are facing rare market opportunities. On the other hand, due to geopolitical factors, the upstream and downstream of the industrial chain are turbulent, the business of global semiconductor companies is facing interruption, and the innovation and development of the entire industry are also affected.

“In the longer term, the international semiconductor ecological environment has undergone tremendous changes in recent years. Moore’s Law, which has supported the vigorous development of electronic products for decades, has approached the physical limit. With the advent of the post-smartphone era, the market’s The requirements are also diversified. There are many types of chips and great changes.” Zhao Haijun said.

At present, various cities are still enthusiastic about the layout of the integrated circuit industry, including Wuhan City where Wuhan Hongxin is located. In October 2020, Wuhan City issued the “Wuhan City’s Several Policies to Accelerate the High-Quality Development of the Integrated Circuit Industry”, encouraging integrated circuit companies, universities and scientific research institutions to build core technology research carriers for integrated circuits, and for newly approved national technological innovations in the field of integrated circuits The center and the State Key Laboratory provide a one-time funding of 5 million yuan.

SMIC is about to change its name

On the evening of February 4, SMIC international, the mainland’s “big brother of chips”, disclosed a “happy and worried” performance express.

SMIC is about to change its name

Source: Announcement source: Announcement

 

On the one hand, the demand for mature processes is still strong, and the company plans to expand its production capacity. At the same time, it is expected to turn losses into profits by 2020.

 

On the other hand, in the view of some market participants, the company’s revenue growth guidelines for the first half of 2021 are not high. “Our full year forecast is based on the assumption that the continuity of operations will not be affected. The application for export license must be based on the process, which needs time and uncertainty. Based on this, the annual revenue target is medium to high single digit growth, and the revenue target for the first half of the year is about US $2.1 billion; the annual gross profit rate target is 10% – 20% in the central region. ” Gao Yonggang, CFO of SMIC, pointed out.

 

He also said that looking forward to 2021, due to being included in the “entity list” by the U.S. government, the company is restricted in purchasing relevant products or technologies in the United States, which brings uncertain risks to the company’s annual performance expectations.

 

Fourth quarter profit increased by more than 90%

 

According to China’s accounting standards for business enterprises (the same below), in the fourth quarter of 2020, SMIC achieved an operating revenue of 6.671 billion yuan, a year-on-year increase of 10.3%; the net profit attributable to the parent company was 1.252 billion yuan, a year-on-year increase of 93.5%, but the net profit deducted decreased by 82% to 40.47 million yuan.

 

SMIC said that in the fourth quarter of 2020, the company’s wafer sales increased and the average selling price rose, and the investment income and inventory loss from government project funds, investment in joint ventures and financial assets increased.

 

Throughout the year, SMIC’s non audited net profit attributable to the parent company in 2020 was RMB 4.332 billion, an increase of 142% over the same period of last year; its non audited net profit deducted in 2020 was RMB 1.697 billion, corresponding to a loss of RMB 522 million in 2019. Once the non-profit state of the company is deducted in 2020 after audit, it means that the stock abbreviation of SMIC International A shares will change, that is, from “SMIC international-u” to “SMIC international”.

 

It is understood that the special logo “U” of the science and technology innovation board represents that the listed company has not yet made profits. After the issuer makes profits for the first time, the special logo will be cancelled. According to the Listing Rules of science and Technology Innovation Board issued by Shanghai Stock Exchange, the company’s net profit before and after deducting non recurring profit and loss in the accounting year before listing is negative. The realization of profit refers to the first time that the unprofitable scientific and technological innovation enterprises realize profit in a complete accounting year after they go public.

 

SMIC said that in 2020, the company will actively take epidemic prevention measures to minimize the adverse effects of the epidemic; at the same time, it will benefit from the strong demand of consumer electronics, information communication and other industries, the increase of chip usage, the overall tight production capacity of the wafer foundry industry, the strong demand for mature processes, and the growth of revenue.

 

Capital expenditure focuses on mature process expansion

 

In order to meet the needs of customers, SMIC expects to spend US $4.3 billion in 2021, most of which will be used to expand the production of mature processes (above 28nm), and a small part will be used for advanced processes (below 28nm), civil engineering and other new joint venture projects in Beijing.

 

SMIC said that at present, the capacity of the wafer foundry industry is tight, especially the demand for mature processes is still strong, and it is expected that the company’s mature capacity will continue to be full. The company plans to expand 10000 pieces of mature 12 inch production line and no less than 45000 pieces of mature 8 inch production line in 2021.

 

For advanced technology, SMIC said that under the influence of “entity list”, it will consider strengthening the development and construction of the first and second generation FinFET multi platform, and expanding the reliability and competitiveness of the platform.

 

It is worth noting that there is a big gap between SMIC’s capital expenditure plan in 2021 and 2020 (US $6.7 billion). According to industry analysis, the reduction of capital expenditure may be related to the company’s inclusion in the “entity list”.

 

In mid December last year, the US Department of Commerce listed SMIC international and some of its subsidiaries and joint-stock companies in the “entity list” on the grounds of protecting us national security and diplomatic interests. According to the relevant laws and regulations of the United States, for the products or technologies applicable to the export control regulations of the United States, suppliers must obtain the export license of the U.S. Department of Commerce to supply to the company; for the products or technologies used for 10nm and below technology nodes (including extreme ultraviolet technology), the U It may also be limited to provide OEM services to special customers.

 

Recruiting experts to fill the seats on the board of directors

 

On the evening of the same day, SMIC issued a personnel appointment announcement. From February 4, Dr. Liu Ming was appointed as the third type of independent director and a member of the strategy committee of the company for a term of office from February 4, 2021 to the annual general meeting of shareholders in 2021.

 

This fills the vacancy left by the resignation of Dr. Cong Jingsheng, the former independent director of SMIC, at the end of 2020. At that time, the announcement said: “the board of directors of the company will appoint new independent non-executive directors within three months from December 31, 2020 to ensure that the relevant rules can be complied with.”

 

According to the announcement, during his 33 year career in the semiconductor industry, Dr. Liu Ming has made contributions to the research of micro / nano fabrication, NVM devices and circuits, modeling and simulation, and reliability. He has published five books and articles, more than 300 journal papers and more than 100 conference papers. She holds many important academic positions, including the president of IEEE electronic device Association Beijing Branch.

 

Dr. Liu Ming’s achievements have won her many awards and honors. In 2019, she was awarded academician of the World Academy of Sciences (Twas). Dr. Liu Ming has devoted his career to education, guidance and publishing research in semiconductor technology and development.