Chip firms report solid profits for 2020

Integrated circuit firms, including many listed in the Shanghai STAR-Market, posted a high growth rate of profit and business, thanks to booming demand for chips for consumer electronics and cars with intelligent features, the companies said on Thursday.

Shanghai-based AMEC, the biggest semiconductor equipment vendor in the Chinese mainland, expected net profit in 2020 to hit 440 million to 520 million yuan (US$67.7 million to US$80 million), a growth of 133 percent to 176-percent from a year ago. AMEC offers core equipment for top chip makers such as SMIC.

National Silicon Industry Group Co, another upstream firm, expected net profit to hit 77 million yuan to 92 million yuan in 2020. It would be the first year for the company, which provides silicon wafers, to be in the black after it got listed in the STAR Market last year.

The expansion blueprint in Shanghai, which has the most complete and intensive integrated firms nationwide, is to continue boosting the industry and related local firms such as AMEC, SMIC and National Silicon. 

The scale of Shanghai's semiconductor industry will double in the next five years to boost the city’s digital transformation and applications such as AI and cloud, government officials said when the 14th Five Year Plan (2021-2025) was released during the recent Shanghai People’s Congress meeting. 

The city’s integrated circuit industry is estimated to have hit 200 billion yuan in 2020, compared with 170 billion yuan in 2019.

The top three chip test and assembly firms in the Chinese mainland, JCET Group Co, TongFu Microelectronics Co, and Tianshui Huatian Technology Co, all posted net profit growth in 2020.

Shanghai-listed JCET posted a net profit of 1.23 billion yuan, almost 13 times the growth compared with a year ago.

Besides applications used in consumer electronics such as smartphones and TVs, chips are widely used in vehicles with smart features. Chips are in short supply in the car industry, analysts said.

With the development of automation, intelligence and electrification in automobiles, consumption of various chips and semiconductor components will rise sharply. However, the previous weak auto market demand has led to low stocks of car manufacturers, seriously affecting the utilization rate of car factories and terminal integration, according to researcher TrendForce.