On January 5, Beijing Junzheng issued an announcement on foreign investment in industrial funds.
The content of the announcement shows that in order to fully tap investment opportunities in the semiconductor industry and expand the company’s project investment channels, Beijing Junzheng and Zhuhai Tongpei Equity Investment Management Partnership and other limited partners of the partnership signed the “Hangzhou Yunhao Zhenxin Equity Investment Partnership” (Limited Partnership) Limited Partnership Agreement.
(Picture source Beijing Junzheng announcement)
It is understood that the initial fundraising scale of the Zhenxin Fund managed by Zhuhai Tongpei Equity Investment is 500,000 yuan, and Beijing Junzheng, as a limited partner, intends to use its own funds of RMB 20 million to subscribe for a portion of the Zhenxin Fund.
Beijing Junzheng believes that this investment will help the company integrate and utilize the advantages of all parties to explore investment opportunities. Through cooperation with professional investment management teams, while ensuring the stable development of its main business, it can expand with the advantages and resources of the partnership. The company’s project investment channels to enhance the company’s capital operation capability and efficiency are in line with the company’s strategic development direction.
Beijing Junzheng’s profit in the third quarter increased by nearly 200 times
Beijing Junzheng was established in 2005 and listed on the Shenzhen Stock Exchange’s Growth Enterprise Market in 2011. The company was initiated by the earliest advocates of domestic microprocessors with the support of well-known venture capital in the industry. It is committed to the development of independent innovative CPU technology and products in China. It has now developed into a leading domestic and foreign embedded CPU chip and solution provider business.
Today, Beijing Junzheng has the world’s leading embedded CPU technology and low power consumption technology. Aiming at the characteristics of mobile products, Beijing Junzheng’s achievements in embedded CPUs are mainly its self-developed MIPS32 compatible microprocessor technology XBurst, which is ahead of the existing 32 in the industry in terms of main frequency, multimedia performance, area and power consumption. Bit RISC microprocessor core.
On October 26, 2021, according to the latest financial report released by Beijing Junzheng, the total revenue of Beijing Junzheng in the third quarter of this year was 1.457 billion yuan, a year-on-year increase of 66.85%; net profit was 280 million yuan. , A year-on-year increase of 2459.80% (affected by the consolidated financial statements); at the same time, the net profit attributable to shareholders of the listed company after deducting non-recurring gains and losses reached 276 million yuan, a simultaneous increase of almost 200 times.
(Picture source Beijing Junzheng announcement)
Beijing Junzheng’s excellent financial performance is related to the strong market demand for its various product lines and the inclusion of Beijing Sicheng into the scope of consolidation.
Before Beijing Sicheng was included in the consolidated statement, Beijing Junzheng’s operating income was stable. Its operating income for the first quarter of 2020 was 56.99 million yuan. After Beijing Sicheng began to be included in the consolidated statement on May 31, 2020, Beijing Junzheng In the second quarter of 2020, operating income increased to 298 million yuan, and the third and fourth quarter revenues were 873 million yuan and 942 million yuan, respectively. It can be seen that a large part of Beijing Junzheng’s operating income comes from its memory chip DRAM products.
Acquisition of ISSI, layout of automotive-grade chip field
Beijing Junzheng completed the acquisition of US ISSI and its sub-brand Lumissil through the acquisition of Beijing Sicheng in May 2020. It has successfully built the integration advantage of its processor + memory chip, and has become a scarce domestic automotive memory chip leader. Since then, it has officially entered the car-level chip field.
ISSI is an American semiconductor chip manufacturer headquartered in Milpitas, California. Its main products are analog chips, high-performance low-power SRAM chips and low-density DRAM chips. It is the seventh largest DRAM company in the world. Its DRAM product line has annual revenue of approximately 1.8 billion. , The main revenue business direction is still in the current automotive, communications, industrial, medical and other industries. General Motors, Siemens, Panasonic, and Huawei are all its main customers.
ISSI has been operating in the field of automotive electronics for more than 20 years. Storage products in the automotive field have certain advantages in terms of temperature, life, materials, and quality. With the gradual rise of the new energy vehicle industry, compared with traditional fuel vehicles, new energy vehicles have stronger demand for chips, and the demand for memory chips in the automotive industry has also expanded. ISSI accounts for the total revenue of the automotive industry. Up to 53%.
At present, the domestic new energy vehicle industry is still in a new stage of rapid growth. According to Canalys’s forecast, as of November 2021, China’s annual production and sales of new energy vehicles will reach 3 million, a cumulative year-on-year increase of more than 160%, and the penetration rate of new energy vehicles will exceed 10%, the compound annual growth rate exceeds 110%. It is estimated that China’s annual sales of new energy vehicles are expected to reach 5 million units in 2022.
Therefore, in addition to the acquisition of ISSI, Beijing Junzheng will continue to increase its size in the field of automotive-grade chips. In April 2021, Beijing Junzheng issued an announcement stating that the total amount of funds to be raised will not exceed 1.407 billion yuan, mainly for “smart video chip + car chip + smart IoT chip”. It will continue to deploy in the field of automotive chips and drive the company’s long-term developing.
Increase capital in foundry to ensure sufficient chip production capacity
In the institutional research activities in September 2021, Beijing Junzheng believes that the demand for semiconductor chips will continue to be strong in the future, and the supply chain of smart video chips, some memory chips, and analog chips will still be relatively tight. Therefore, the cooperation agreement between Beijing Junzheng and DRAM fabs includes relevant agreements in terms of quantity guarantee. Even in the case of tight supply, Beijing Junzheng can still guarantee sufficient DRAM production capacity.
In addition, in the face of short supply in the chip foundry market, Beijing Junzheng is also prepared to increase capital for chip foundries and strengthen deep binding with the upstream supply chain to ensure sufficient production capacity.
In July 2021, Beijing Junzheng increased its capital in wafer foundry Rongxin Semiconductor, and plans to spend 100 million yuan to subscribe for Rongxin Semiconductor’s registered capital of 4 million yuan, accounting for 1% of the shares.
It is understood that Rongxin Semiconductor is a new chip foundry company born under the “core shortage tide”.
Rongxin Semiconductor was established in April 2021 and completed an initial fundraising of RMB 9 billion. The shareholders include Yuanhe Puhua, Minhe Capital, Fengyuan Capital, Meituan, and Sequoia Capital.
Rongxin CEO Chen Jun pointed out that the company is gradually deploying semiconductor manufacturing in accordance with a market-oriented approach, starting from wafer-level packaging, and the ultimate goal is to achieve independent and controllable manufacturing capabilities for 12-inch wafers. Provide precise services for more domestic semiconductor design companies, and do a good job as a substitute for domestic head wafer manufacturing companies to further strengthen the overall strength of China’s semiconductors.
Today, Rongxin Semiconductor has participated in the asset auction of Dehuai Semiconductor, a well-known unfinished building in August 2021, and successfully purchased Dehuai’s assets for 1.666 billion yuan.
Through the acquisition of Dehuai Semiconductor’s ready-made plant, Rongxin Semiconductor’s new production capacity will save one year of construction period. At the same time, Rongxin Semiconductor is positioned as a mature chip process that meets the needs of the domestic semiconductor market. Therefore, once Rongxin Semiconductor is put into production, its production capacity will be snapped up. Beijing Junzheng increased its investment in Rongxin Semiconductor early, presumably for the purpose of pre-booking production capacity.
Today, Beijing Junzheng’s main business embedded CPU chips and DARM memory chips have become its main sources of income. In terms of production capacity, through advance layout, its main products are sufficient to meet market demand, and the semiconductor industry is still in a booming boom. Degree status and strong market demand will bring more development opportunities for Beijing Junzheng.