The "Ten-Billion" Group Expands as Innovation Drives Semiconductor Industry Growth

Translated from Shanghai Securities News, Li Xingcai and Fan Xinxin

As of April 17, 134 A-share semiconductor companies have released their 2024 annual reports. Nine of these companies reported revenues exceeding 10 billion yuan, including Semiconductor Manufacturing International Corporation with revenues of 57.796 billion yuan and JCET Group Co., Ltd. with revenues of 35.96 billion yuan. Additionally, 21 companies reported revenues exceeding 5 billion yuan. A total of 92 companies remained profitable, representing nearly 70% of the industry, while 77 companies reported year-on-year growth in net profit attributable to the parent company, accounting for nearly 60%.

NAURA Technology Group Co., Ltd. expects a 2024 revenue of 29.838 billion yuan and a net profit attributable to the parent company of 5.621 billion yuan, marking year-on-year increases of 35.14% and 44.17%, respectively. Will Semiconductor Co., Ltd. Shanghai anticipates a revenue of 25.731 billion yuan and a net profit attributable to the parent company of 3.323 billion yuan, experiencing year-on-year growth of 22.41% and 498.11% respectively. Many companies said that the global semiconductor industry is rebounding, with improved profitability for both the industry and companies.

R&D Builds Hard Power; Innovation Drives Strong Performance

The strong performance of semiconductor companies is rooted in sustained research and development (R&D) and innovation efforts. Among the 134 companies, 68 disclosed a R&D expenditure totaling 37.56 billion yuan, with 58 reporting year-on-year increases in R&D expenditure. Semiconductor Manufacturing International Corporation, Hygon Information Technology Co., Ltd., and Will Semiconductor Co., Ltd. Shanghai R&D expenditure took the lead, with R&D expenditure of 5.447 billion yuan, 3.446 billion yuan and 3.245 billion yuan respectively; Companies such as Skyverse Technology Co., Ltd. and Advanced Micro-Fabrication Equipment Inc. China recorded notable increases in R&D expenditure year-on-year, at 118.17% and 73.59%, respectively.

Innovation has resulted in performance enhancements. NAURA Technology Group Co., Ltd. has made breakthroughs in many new products, with a significant year-on-year increase in sales. Yangzhou Yangjie Electronic Technology Co., Ltd. has ramped up investment in new product R&D, leading to a steady rise in gross profit margins. Longsys reported revenue of 17.464 billion yuan, a year-on-year increase of 72.48%, with net profit reaching 499 million yuan, marking a turnaround from losses. The enterprise-level storage segment experienced a revenue increase of 666.30% year-on-year.

AI Reshapes Smart Hardware; Related Products Will Grow Even Faster

The development of China's semiconductor industry has benefited from the accumulation of manufacturing and the development of complete machine manufacturing. AI reshapes smart hardware, creating new opportunities and driving rapid advancements in terminal products such as cloud computing, smart vehicles, and smart hardware. Hygon Information Technology Co., Ltd.'s CPU and DCU products have further expanded their market share. In 2024, the Company achieved a revenue of RMB 9.162 billion, a year-on-year increase of 52.4%, with its net profit attributable to the parent company reaching 1.931 billion yuan, a year-on-year increase of 52.87%. Shenzhen Intellifusion Technologies Co., Ltd. reported revenues of 918 million yuan, up 81.42% year-on-year, primarily attributed to increased sales revenue from intelligent computing operations and smart hardware products. Telink Semiconductor (Shanghai) Co., Ltd. reported revenue of 844 million yuan, a year-on-year increase of 32.69%, with net profit attributable to the parent company of 97 million yuan, a year-on-year increase of 95.71%.

Looking forward to 2025, many institutions are optimistic about the growth of the AI and semiconductor markets. International Data Corporation forecasts that the semiconductor market will grow by 15% year-on-year, with the storage market projected to expand by over 24%. Canalys predicts that by 2028, the proportion of global AI mobile phone shipments in smartphones will increase to 54%.

The above information is provided for reference purposes only and does not constitute investment advice.