Since 2021, under the background of maintaining a high boom in the global semiconductor industry and accelerating the trend of domestic substitution, domestic fabs represented by SMIC and Huahong have announced increased investment and continued expansion, driving the rapid development of the clean room engineering industry.
However, with the gradual maturity of the domestic clean room engineering industry, there are many market participants, and competition is becoming increasingly fierce. At the same time, under the epidemic, upstream raw materials and labor have skyrocketed, Asia Xiang integrated, Baicheng shares, Shenghui integrated gross profit margin fell to about 10%, and the clean room engineering industry seems to have entered the "era of low profit".
Clean room engineering industry enters the "era of meager profits"
In 2021, with the worsening of the "lack of core" situation, the view that the wafer production capacity is seriously insufficient has become a consensus in the industry, and the boom of investment in fabs has once again been staged, and the investment scale of the domestic semiconductor industry has risen significantly.
Taking the domestic foundry leader SMIC as an example, in order to continue to promote the expansion of the existing old plant and the three new plant projects in Shanghai, Beijing and Shenzhen, 2022 is still the peak of investment, capital expenditure is expected to be about $5 billion.
In addition to SMIC, Huahong Semiconductor is starting an A-share IPO, although it did not say back to A to raise funds, but the industry generally believes that expansion is its main driving force.
At the same time, SMIC Shaoxing, Hefei Changxin, Yangtze River Storage, TSMC, Jingheicheng, Yuexin Semiconductor and other well-known domestic fabs have also announced the expansion of production, and the investment boom of fabs will drive the market demand for clean room engineering.
Benefiting from the accelerated investment in domestic chip-related fields, in 2021, the signing target of Asiang Integrated was exceeded and its revenue also recovered to the level before the new coronavirus epidemic, achieving an operating income of 2.212 billion yuan, an increase of 138.02%. The net profit attributable to the shareholders of the listed company was 24,936,500 yuan, and the loss was successfully turned into profit.
It is worth mentioning that due to the fierce market competition in 2021 and the rising cost of raw materials and labor, although Asiang Integrated has increased cost control efforts, its comprehensive gross margin is still 8.28% compared with the comprehensive gross margin in 2020, down 0.39 percentage points to only 7.89%.
Previously, set micro network has quoted industry insiders reported that Asia Xiang integration is more famous in the industry is optimization ability. And even won Hefei Jinghe, Hangzhou rich chip, Nanjing TSMC, Suzhou and ship, Hefei Changxin, Shanghai SMIC, Beijing SMIC, Tianjin SMIC and many other star clean room projects, the gross profit margin has dropped to less than 10%, the situation of other peers what?
From the perspective of Baicheng Shares and Sunhui Integrated, which are hitting the main board of the Shanghai Stock Exchange, from 2018 to the first half of 2021, Sunhui integrated's comprehensive gross profit margin was 13.18%, 16.51%, 16.52% and 12.70% respectively; The gross profit margin of Baicheng's main business was 19.06%, 15.55%, 15.35% and 12.24% respectively.
In terms of science and technology, according to the annual report of Taiji Industry, the gross profit margin of its engineering and technical services from 2018 to 2020 is 11.39%, 10.41% and 10.03%, respectively, which is in a state of continuous decline.
Obviously, due to the long development of the clean room engineering industry, the major manufacturers have become increasingly rich in factory construction experience, and the market competition is becoming increasingly fierce.
Some economists have said that a sufficiently market-oriented industry, after full market competition, will eventually move toward meager profits, and the clean room engineering market is also accelerating into the "era of meager profits."
Project funding pressure is increasing
Based on the government's goal of "Made in China 2025", the chip self-production rate should reach 40% in 2020 and 70% in 2025. Based on the above targets, it is estimated that by 2025, China will have to build more 12 - and 8-inch fabs.
Industry insiders also said that the domestic needs to import 2 trillion high-end chips from abroad every year, relying on China's current production capacity is far from its own needs, the future investment in chips will continue to increase. This is the positive impact of the Sino-US trade war, and in the future, China will spare no effort to increase investment in the semiconductor field to avoid the hidden danger of "stuck neck".
Therefore, under the market background of "lack of core price" and "acceleration of domestic substitution", China's semiconductor industry is still building factories one after another.
It is worth noting that although the overall environment is good, adverse factors such as inflation leading to a sharp rise in upstream raw material prices, fierce market competition, pressure on project funds, and talent gaps still exist.
The clean room industry is a capital-intensive industry, and the investment amount of semiconductor fabs is often tens of billions of yuan, which generally takes one to two years from the start to the completion of the project, resulting in the need for the early clean room project manufacturers to advance bid security, performance security, prepayment security, quality security, project working capital, etc.
Bocheng shares also pointed out in the prospectus that with the continuous deepening and development of the degree of marketization of the industry, the operation of clean room system integration business is also more market-oriented and international, and the participation of capital has become a prerequisite for the system integrator to be shortlisted.
In clean room engineering projects, project materials and labor costs are the main components of project costs. Since the second half of 2020, the prices of bulk materials such as copper, aluminum and steel have risen rapidly, resulting in a surge in the cost of materials such as wire and cable, library board, ceiling, elevated floor, valves, and steel pipes.
Due to the project has a certain execution cycle, resulting in a long payment cycle, the actual settlement payment has a certain lag, and the rise in raw material costs can not be timely transmitted to downstream customers, which is also one of the reasons why the gross profit margin of major clean room engineering manufacturers continues to decline.
To the EPC project general contracting model
It is understood that according to the different scope of services, the business model existing in the clean room system integration industry is divided into a single business model and a comprehensive business model.
Single business operation mode refers to a certain business link in the process of clean room planning, design, procurement, system integration, secondary distribution, operation and maintenance, while enterprises engaged in comprehensive business operation mode must have high business qualifications and rich project experience, and through continuous business extension and expansion. Participate in clean room design, procurement, system integration, secondary configuration, operation and maintenance and other business links, such as "design + system integration", "design + procurement + system integration" and other comprehensive services.
At present, most of the domestic clean room engineering enterprises are concentrated in the low-end areas of ordinary electronic components, petrochemical and other requirements for cleanliness are not high, or have a certain competitiveness in a single field.
Of course, becoming bigger and stronger and becoming an integrated service provider is the common development goal of domestic clean room engineering manufacturers. However, only when clean room engineering manufacturers have the "dual qualification" of design + construction at the same time can they independently undertake the general contract project.
Therefore, clean room engineering manufacturers represented by Asiang Integration and Bocheng Shares are actively working on the EPC project general contracting model in order to achieve diversified business development.
In 2021, Baicheng Shares entered the design field through the acquisition of Zhongcheng Design, laying the foundation for EPC business expansion. Asiang Integrated also contracted two projects of Zhejiang University and Qingdao Haohan in 2021, making a breakthrough in the EPC project general contracting mode.
Taiwanese manufacturers actively expand the Southeast Asian market
In fact, the development trend of the clean room engineering industry is the same as that of the semiconductor industry, which was initially dominated by European, American and Japanese companies in this field.
At this stage, Eleven technology has become the largest integrated circuit engineering design institute in China, and in the display panel production line clean room design is the leading ten, CLP two company, CLP four company is in the implementation of engineering has a strong competitive advantage. Obviously, some leading local enterprises have gradually reached the international leading level.
In recent years, there has been a more serious "price battle" in the clean room engineering industry, and major enterprises have not only expanded in the direction of diversification in business, but also gradually made efforts to overseas markets.
At the same time, with the rise of the Sino-US trade war and the rise of domestic labor prices, the electronic information industry has gradually transferred to Southeast Asia, represented by more advantageous labor costs, and Taiwan clean room engineering manufacturers have once again cooperated with customers to explore overseas markets.
In its 2021 annual report, AXIANG said that in terms of overseas market expansion, with the implementation experience of the 2019 Singapore UMC project and 2020 Vietnam Huanxu project, as well as the resources of the parent company's Taiwanese customers, it is initially equipped to obtain customer orders in Singapore and Vietnam as a supplement to domestic business growth.
The same is true for Sunhui integration, which has failed to achieve steady growth in its domestic business in recent years, but has maintained the trend of performance growth by actively exploring the Southeast Asian market. From 2018 to the first half of 2021, Sunhui Integrated's income from overseas regions was 58.527,100 yuan, 117 million yuan, 200 million yuan and 313 million yuan, accounting for 6.28%, 12.56%, 18.23% and 35.28% of the main business income, respectively.
Write at the end
From the perspective of the development of the clean room engineering industry, semiconductor investment continues to rise in 2021 in a state of volume and price, but the overall market competition has been very full, taking the EPC industry leader 11 technology as an example, although its revenue continues to grow, only in the first half of the year exceeded 8 billion yuan, but the gross profit margin is in a continuous decline, has been about 10%. As mentioned above, the clean room engineering market is accelerating into the "era of low profits".
