Since last year, affected by factors such as sluggish demand for consumer electronics and falling prices of memory chips, the performance of storage companies has generally been under pressure. In the face of various risks and challenges, A-share storage manufacturers are seizing development opportunities, accelerating the layout of research and development innovation, and consolidating and enhancing their competitive advantages.
The relationship between supply and demand has not improved in the first quarter
Under the influence of a variety of factors, since 2022, the downstream terminal demand of the semiconductor industry has been weak, especially the high inventory of the semiconductor memory industry chain, which has caused great concern in the market. From the performance of major storage manufacturers in the first quarter of 2023, the relationship between semiconductor memory supply and demand has not been significantly improved.
On the international front, Samsung Electronics reported that revenue fell 18% in the first quarter of this year, net profit was 1.58 trillion won, down 86% year-on-year, among which, Samsung Electronics responsible for chip business device solutions (DS) division had an operating loss of 4.58 trillion won; Another big South Korean storage giant SK Hynix in the first quarter of this year also failed to reverse the loss situation, the current period to achieve revenue of 5 trillion won, down 58%, net loss of about 2.59 trillion won, has been two consecutive quarters of losses; The performance of the United States storage manufacturer Micron is also relatively depressed, its second fiscal quarter of 2023 financial results (as of March 2, 2023) showed that quarterly revenue was $3.69 billion, down 53% compared with the same period last year; The net loss was $2.31 billion.
In the context of the weak overall market demand, in the first quarter of this year, the performance of A-share companies such as Jiang Bolong and BIWIN Storage, which are the main large-capacity storage business, also failed to “jump out” of market expectations. Among them, Jiang Bolong achieved operating income of 1.482 billion yuan in the first quarter, a year-on-year decline of 36.42%, and a net profit loss of 281 million yuan to the mother; The operating income of BIWIN storage in the period was 425 million yuan, down 39.41% year-on-year, and the net profit loss of 126 million yuan.
Enterprises actively increase research and development innovation
Market participants generally believe that in 2023, with the recovery of the demand side, the supply side to reduce capacity, supply and demand structure is expected to optimize, the semiconductor storage industry cyclical decline may gradually stop, and even some rebound. From the demand side, as the economy continues to recover, global consumer electronics demand is expected to improve quarter-on-quarter in the second half of 2023; From the supply side, at the end of 2022, giants such as Micron and SK Hynix have reduced capital expenditure, and the supply and demand structure of the storage market is expected to be further optimized.
“At present, the market share of domestic DRAM and NAND Flash chips is less than 5%, and the development prospects are broad.” Industry analysts pointed out that China has become the world’s largest semiconductor consumer market for many consecutive years, superimposing the general trend of localization of the industry, and local memory research and development packaging manufacturers will usher in development opportunities.
In this context, major storage manufacturers have increased research and development and innovation. Domestic storage manufacturers represented by Jiang Bolong and BIWIN Storage will also seize the major opportunities of localization, continue to deepen the integrated layout of R&D and sealed-test through innovation-driven strategy, and further help the domestic storage industry chain to the global market.
Annual report data show that in 2022, Jiang Bolong R & D investment of 356 million yuan, an increase of 10.41%, by the end of 2022, the company has obtained 470 patents, 81 software Copyrights, 5 integrated circuit layout design, it mainly focuses on firmware algorithm development, system-level integrated package design (SiP), memory chip test algorithm and storage application technology development. In 2022, the R&D investment of BIWIN Storage was 126 million yuan, an increase of 18.27%. By the end of 2022, the company had obtained 242 domestic and foreign patents and 4 software Copyrights, including 37 invention patents, 131 utility model patents and 74 design patents, covering all key aspects of the company’s research and development and production process. Including storage solution research and development, advanced sealing test, test equipment research and development and other core technologies.
Under the continuous high research and development investment, the product competitiveness of domestic storage manufacturers has been continuously enhanced, and the market share has gradually increased. Jiang Bolong is one of the few domestic companies with a global well-known consumer storage brand, the company’s Lexar positioning is the international high-end consumer storage brand, in photography, audio and video, high-end consumer storage scenarios (such as outdoor sports equipment) field has a good reputation, Lexar U disk, memory card, SSD products in the global market share is also relatively leading.
BIWIN Storage is the domestic market share of the leading independent brand enterprises, the company’s memory products have entered the supply chain system of many leading customers, including: Intelligent terminal manufacturers such as Google, Facebook, BBK, Transsion Holdings, TCL, Skyworth, IFlytek, Foxconn, PC and server manufacturers such as Lenovo, Tongfang, Baode, communication equipment manufacturers such as ZTE, Zhaochi, Zhaoge, Hemiao, Jiulian, and other industries and car networking customers such as STAR-NET, Jiangsu Guoguang, G7 Internet of Things, Ruiming Technology, etc. And occupy an important share in multiple market segments.