On July 16, under the scrutiny of the mainland semiconductor foundry giant, SMIC Integrated Circuit Manufacturing Co., Ltd. officially landed on the Science and Technology Innovation Board with the stock code "688981".

SMIC officially landed on Science and Technology Innovation Board

html On July 16, under the scrutiny of the mainland semiconductor foundry giant, SMIC Integrated Circuit Manufacturing Co., Ltd. officially landed on the Science and Technology Innovation Board with the stock code "688981".

SMIC total share capital is 7.13642 billion shares, the issue price is 27.46 yuan, and the price-to-earnings ratio is 109.25 times. The opening price was 95 yuan and the opening price was 95 yuan, up 246%. After the trading, SMIC A shares fell in the short term at the beginning of the trading session, and the increase narrowed to less than 200%. As of press time, SMIC is now at 84.00 yuan, with a total market value of 623.083 billion yuan.

Image source @Snowball

SMIC is the "national team" of wafer foundry companies and a pioneer of advanced process processes in mainland China. This listing on the Science and Technology Innovation Board not only became the largest IPO in the A-share market, but also set a record for the fastest A-share IPO record.

public information shows that on May 5, SMIC announced that it will IPO on the Science and Technology Innovation Board; on June 1, the Shanghai Stock Exchange officially accepted the application for listing on the SMIC Science and Technology Innovation Board. Three days later, the company entered the IPO inquiry process. Faced with the 6 major categories and 29 questions raised by the Shanghai Stock Exchange, the company took only 4 days, that is, on June 7, to hand over the answer sheet of the first round of inquiry, setting a new record for the first round of replies during the review process of the Science and Technology Innovation Board.

htmlOn June 19, the Shanghai Stock Exchange announced that the SMIC first release of the Science and Technology Innovation Board was approved. In just 19 days, the company completed the entire process from exchange acceptance to approval, setting the fastest meeting record of the Science and Technology Innovation Board, breaking the 23-day passing record set by the Beijing-Shanghai High-Speed ​​Railway, demonstrating the importance of relevant government departments to the semiconductor industry.

In addition, after logging on to the Science and Technology Innovation Board, SMIC will also become the first "A+H" red chip enterprise on the Science and Technology Innovation Board, which is of great significance.

According to Securities Daily, Professor Lu Suiqi of Peking University School of Economics believes that lowering the threshold for red-chip companies to return to A-list will help guide the capital market to help high-tech companies raise funds. In terms of institutional arrangements, it also better reflects the orientation of expanding corporate financing channels. SMIC can simultaneously realize the listing of the ‘A+H’ red silk model, which is also a reflection of the further opening of my country’s capital market.

SMIC "Return of the King", setting a new high in the market value of A-share semiconductors

At the same time, since the online subscription was launched on July 7, SMIC has been enthusiastically sought after by the capital market.

In this issuance, there are 29 heavyweight strategic allocation targets, with a total investment amount of 24.261 billion yuan. Among them, the second phase of the National Integrated Circuit Industry Investment Fund was allocated 3.5175 billion yuan, which is the largest investor, followed by Singapore government investment of 3.3165 billion yuan and Qingdao Juyuan Xinxing equity investment of 2.224 billion yuan.

In addition, many listed companies in the semiconductor industry chain have indirectly participated in the strategic allocation of SMIC on the Science and Technology Innovation Board by participating in the investment in Qingdao Juyuan Xinxing Equity Investment Partnership (Limited Partnership), including unicorn companies such as Weil Co., Ltd. and Lanqi Technology .

SMIC Science and Technology Innovation Board has also created an astonishing market value scale.

is calculated based on the issue price of 27.46 yuan per share. After the over-allotment option is fully exercised, the market value of SMIC when it was listed is approximately 202.909 billion yuan, which will surpass all companies on the current Science and Technology Innovation Board.

According to incomplete statistics from Titanium Media (see the figure below), 12 semiconductor-related companies have now entered the Science and Technology Innovation Board. They are: Ruichuang Micronano, Lanqi Technology , Lexin Technology, Anji Technology, Xinyuan Micro, Jingchen Shares, Juchen Shares, Shanghai Silicon Industry-U, Qingyi Optoelectronics, Shengong Shares, Jingfeng Mingyuan and China Resources Micro.

According to the statistics of Titanium Media, among the 12 semiconductor companies listed on the Science and Technology Innovation Board, 8 companies are above the market value of 10 billion yuan. Among them, Lanqi Technology has the latest market value of 114.348 billion yuan, becoming one of the few semiconductor giants with a market value of 100 billion yuan. Looking at the A-share market, including the Science and Technology Innovation Board, SMIC is also a leading stock.

data shows that as of press time, the semiconductor company with the highest market value of A-shares was Weil Co., Ltd., with a market value of 194.305 billion yuan, while the total market value of SMIC was as high as 619.53 billion yuan, making it the semiconductor company with the highest market value of A-shares.

In addition, an industry analyst told Titanium Media: " SMIC return to the Science and Technology Innovation Board will become an important reference for the valuation, pricing, and industry prosperity of the relevant technology sectors."

In fact, before SMIC was listed on the Science and Technology Innovation Board, the stock prices of companies in the entire semiconductor industry chain ushered in a big rise, and the market value of star companies including Weil Co., Ltd., China Micro Company, and Shanghai Silicon Industry hit a record high. It can be foreseeable that with the successful return of SMIC to A-shares, it will drive the entire semiconductor industry to recover at an accelerated pace.

Guosheng Strategy believes that in the short term, SMIC will return and the leader will return to its position, and science and technology innovation will usher in another major catalysis. With the rapid return of SMIC and landing in Science and Technology Innovation, on the one hand, the allocation value of A-share semiconductor field has increased again, which is expected to attract more funds to increase allocation; on the other hand, the franchise of SMIC continues to enhance the hard-core attributes of the Science and Technology Innovation Board, attracting the accelerated gold digs and the huge increase in incremental funds.

In the long run, SMIC has passed the review quickly, and the demonstration effect of the Science and Technology Innovation Board is highlighted. The rapid passing of SMIC once again demonstrates the positive attitude of the Science and Technology Innovation Board to accept high-quality science and technology innovation, especially the high-quality red chip . This demonstration effect is expected to continue to attract more high-quality red chips to return to A-shares and attract more high-quality companies to join the Science and Technology Innovation Board.

According to industry insiders of Titanium Media, in 2019, due to Sino-US relations, Japan-South Korea trade frictions, weak growth in terminal demand for smartphones, data centers, automobiles, and unanticipated 5G popularity, the global semiconductor industry is in a downward cycle. At the same time, chips, software and other fields are still monopolized by giants such as Intel , Microsoft , and the calls for domestic production are becoming increasingly strong. Under the special period of

, the listing of SMIC will help promote the rapid development of the domestic semiconductor industry chain and greatly enhance the comprehensive domesticization process of semiconductors.

Zhang Rujing Shanghai Chuang "core", was eliminated in the patent war with TSMC html storm for 20 years, and has developed to its current scale. One person is inseparable from the founder Zhang Rujing.

In 1997, Zhang Rujing left Texas Instruments , which he had served for 20 years, and established SIDS with the support of Huabang Electric and China Development Fund, becoming the third wafer foundry manufacturer in Taiwan after TSMC and UMC.

During his work at Texas Instruments, Zhang Rujing created and participated in the management of 10 semiconductor factories in the United States, Japan, Italy and other places. He is well-known in the chip industry and has mastered a lot of core technologies and customer resources. Born with the "golden key", Shida Semiconductor's development is also extremely rapid. In just three years, its production capacity exceeded one-third of the industry leader TSMC , and successfully achieved profitability.

's great rise has aroused the fear of TSMC's . Founder Zhang Zhongmou is Zhang Rujing's "old leader" at Texas Instruments. He discussed the merger and acquisition matters with Zhang Rujing and offered a acquisition price that he could not refuse.

Afterwards, Zhang Rujing continued to look for entrepreneurial opportunities and, at the invitation of the Shanghai government, he went to Zhangjiang Microelectronics Development Zone to establish SMIC .

"Chinese semiconductor godfather" Zhang Rujing

requires self-raised funds to build a factory. According to the plan, the entire project needs to be built by nearly 1 billion US dollars. Zhang Rujing raised his arms and said, and many capitals came. Among the first batch of investors, there were Goldman Sachs from the United States, Waden International, Handing Asia Pacific from Taiwan, and Xiangfeng Investment from Singapore. Shanghai Industry and Peking University Blue Bird with Chinese government background also participated in the investment.

In the end, SMIC received a total of more than 1.4 billion US dollars in funds, saving enough capital to build a factory, but this is just the first step in the Long March.

At that time, mainland China had neither formed professional semiconductor manufacturing equipment nor lacked chip industry manufacturing talents. The semiconductor industry lags behind TSMC for at least 320 years. What's worse is that it also faces the technical barriers of the US embargo, which Zhang Rujing needs to overcome one by one.

In view of Zhang Rujing's reputation in the chip industry, the company has recruited many overseas talents shortly after its establishment, including more than 300 from Taiwan and more than 100 from the United States, Europe, Japan and South Korea, laying a solid foundation for the company's development. In terms of

technology and manufacturing, Zhang Rujing hoped to introduce 0.18 micron level production line equipment and related technologies, but due to the restrictions of regulations in the United States, Japan and other countries, Zhang Rujing could only introduce 80 equipment and related technologies from Singapore, initially solving this key problem.

is like this, SMIC continued its initial glory. It took only 13 months to build a semiconductor factory that meets the standards, and then produced the most advanced 0.18 micron chip in the mainland at that time, creating a world record for the shortest time for semiconductors from factory construction to production.

At the same time, using his personal connections, Zhang Rujing also conducted technical cooperation with Japan's Toshiba , Fujitsu , and European Microelectronics Research Institute to speed up the technology upgrade and iteration, and used the second round of fundraising to invest in and build new wafer factories in Beijing, Tianjin and other places, with a significant increase in overall strength.

In 2003, the company successively achieved comprehensive technical certification and mass production of 0.35nm~0.13nm, with a production capacity of 60,000 pieces per month, and a cumulative sales revenue of 3 billion yuan, with a scale of directly targeting TSMC .

The following year, SMIC was listed in the United States and Hong Kong at the same time, becoming the fourth largest chip manufacturer in the world.

However, the rapid progress of SMIC once again made TSMC feel uncomfortable. Since August 2003, lawsuits against TSMC have followed one after another, and SMIC is exhausted and its vitality is damaged.

TSMC founder Zhang Zhongmou

In 2005, SMIC paid US$175 million in exchange for a short "peace period". In 2006, TSMC filed a lawsuit again in the US California court and accused SMIC of violating the 2005 agreement, and the two sides started a lawsuit again.

In November 2009, the California District Court ruled that SMIC lost the case again. It illegally used 61 of the 65 controversial patent projects, and TSMC asked SMIC to compensate $1 billion.

faced the sky-high compensation, SMIC mediated and finally negotiated a settlement with TSMC . It is said that one of the conditions for the settlement proposed by TSMC at that time was that Zhang Rujing had to resign. As a result, a tragic scene in the history of China's semiconductor industry was staged. Zhang Rujing was "exhausted" during the settlement negotiations and finally left the company he founded.

When the group was in the absence of a leader, Jiang Shangzhou, chairman of SMIC, became a key figure in balancing relations among all parties within the company. He found Wang Ningguo, the former CEO of Huahong Group, who had a great international reputation, to serve as executive director and CEO. Haitulinum Yang Shining served as COO, and SMIC, thus survived a crisis.

After several changes to coaches, SMIC 's performance has grown steadily, but its scale and technology are still far inferior to industrial giant

As the global semiconductor industry situation improves, SMIC 's sales increased from US$1.07 billion in 2009 to US$1.55 billion in 2010, an increase of up to 45.3%, achieving full-year profit for the first time.

Unexpectedly, on June 27, 2011, Jiang Shangzhou suddenly passed away, and SMIC fell into a vortex of power struggle. The company's largest shareholder, Datang Telecom, disrupted the situation and tried to replace Wang Ningguo and support Yang Shining to "take the position". However, after Wang Ningguo was removed from the board of directors, Yang Shining also failed to win the throne of CEO due to "suspected tax evasion", and the vacuum of corporate power reappeared.

During the violent turmoil, Jiang Shangzhou's old classmate Zhang Wenyi invited Qiu Ciyun , who has 30 years of experience in semiconductor technology research and development and is well-known in the industry, to come out.Public information shows that Qiu Ciyun once followed Zhang Rujing to Shanghai to establish SMIC and served as the company's senior vice president of operations. Because his "seeking stability" corporate operation philosophy was contrary to Zhang Rujing's radical behavior, he had no choice but to leave office in 2005.

Because he is the "old man" of SMIC , Qiu Ciyun stabilized the company's chaos and was described by industry insiders as "a blessing in disgrace".

At the same time, since 2013, the national large funds and local funds have begun to vigorously support the development of the semiconductor industry and inject huge amounts of funds into SMIC . The SMIC , which has sufficient funds, has also increased its production capacity year by investing in new factories. In terms of

technology, SMIC is also slowly climbing, becoming the first company in mainland China to achieve mass production of 28nm by 2015. After several years of dedicated operations, the annual sales of SMIC increased to US$2.9 billion in 2016, and indicators such as stock market value, capital investment, and production capacity also increased exponentially.

However, Qiu Ciyun's "steady" style during his tenure was also a double-edged sword. Because he has always controlled foreign capital expenditures, the gap between SMIC in new technology and TSMC is getting bigger and bigger.

Qiu Ciyun

data shows that in 2016, in terms of collective circuit capital expenditure, TSMC was US$10.25 billion, SMIC was only US$2.626 billion; in terms of R&D expenses, TSMC was US$2.2 billion, and SMIC was only US$318 million.

This directly causes SMIC to not keep up with the "international pace". For example, TSMC achieved mass production of 28nm process in 2011, and SMIC was not realized four years later. What's worse is that the Matthew effect in the chip market is obvious, and it is difficult to catch up and surpass it for 4 years in technology.

In May 2017, Qiu Ciyun resigned as CEO for personal reasons, and Zhao Haijun took over. In October of the same year, Liang Mengsong entered SMIC and also served as CEO. SMIC has since started the dual CEO mode.

public information shows that Zhao Haijun was the chief operating officer of SMIC , with more than 20 years of experience in research and development and production of integrated circuit technology, and came in to be responsible for manufacturing; Liang Mengsong was the senior research and development director of TSMC , possessed more than 450 patents, published more than 350 technical papers, came in to be responsible for R&D.

Liang Mengsong

dual CEO model, the company's business focus has also tilted towards technological research and development, and the achievements have also made people shine: it overcomes the 14nm process technology difficulties within 300 days, increases the process yield rate to 95%, and continues to break through to the N+1 process.

In September 2019, SMIC successfully achieved mass production of China's first generation 14nm process on the production line of Shanghai Pudong , and the Chinese chip industry cheered.

At the same time, the annual sales of SMIC also grew rapidly. From 2017 to 2019, the company's operating income reached 21.39 billion yuan, 23.01 billion yuan and 22.02 billion yuan respectively. After deducting the impact of the transfer of LFoundry in 2019, the revenue of each period was 19.85 billion yuan, 21.55 billion yuan and 21.33 billion yuan respectively.

Image source @Prospectus Screenshot

From the perspective of revenue structure, integrated circuit wafer foundry is its main source of revenue. In 2019, the total revenue was 19.994 billion yuan, accounting for 93.12% of the total revenue. The company's other main business revenue is mainly supporting services such as photomask manufacturing, bump processing and testing.

Image source @Prospectus Screenshot

In the field of special processes, SMIC has successively launched the most advanced 24nm NAND, 40nm high-performance image sensor and other special processes in mainland China, and cooperated with leading companies in various fields to achieve continuous growth in market segments such as special memories and high-performance image sensors.

Although SMIC has achieved remarkable results in market size and technology in recent years, looking around, there is still a big gap between it and the industrial giant TSMC .(See Titanium Media for details: SMIC used a 201-page "answer sheet" to provide a comprehensive answer to the Shanghai Stock Exchange's inquiries)

SMIC raised funds this time mainly for technology upgrades and capacity growth, of which 8 billion yuan will be used for the 12-inch chip SN1 project, specifically to build a 12-inch production line with a monthly production capacity of 35,000 pieces, and improve the production technology level to below 14nm; 4 billion yuan will be used for the R&D reserve funds of advanced and mature processes to enhance the company's market competitiveness; the remaining 8 billion yuan will be used to supplement working capital.

as a comparison, according to supply chain information, in the first half of this year, the 7nm wafer production capacity of TSMC may reach 110,000 pieces per month, and the production capacity is expected to further increase to 140,000 pieces per month in the second half of this year, while SMIC is still in the 14nm mass production stage. In terms of performance of

, as of 2019, TSMC reached a terrifying 246.6 billion yuan, SMIC was only 22 billion yuan; TSMC 's net profit was 81.6 billion yuan, and SMIC was only 1.3 billion yuan, with a huge gap in size.

has been developing rapidly for 20 years. Now SMIC has been stationed at a new historical node. On the road to catching up with industrial giants such as TSMC , it must also work a hundred times more sweat to be expected to complete the breakthrough of domestic chips, and this process is destined to be long and difficult. (This article was first published on Titanium Media App, author | Jia Boxin)