Reporter | Cao Li CL
Editor | Chen Feixia
The weak demand in the personal computer market further spread to the semiconductor market. AMD's stock price fell 13.9% after announcing a disappointing third-quarter financial outlook.
AMD expects revenue in the third quarter of 2022 to be US$5.6 billion, far lower than the original estimate of US$6.5 to US$6.9 billion, and a 14.5% month-on-month decrease from the second quarter of 2022. The third quarter is generally the traditional peak season for consumer electronics, so AMD's revenue in the third quarter will usually be higher than in the second quarter. This is also the first time that AMD's revenue in the third quarter has declined month-on-month since 2018.
Currently, AMD revenue is divided into data centers, personal terminals, games and embedded. AMD pointed out that the reason why the performance was lower than expected was the weakening demand for the personal computer market, resulting in a decrease in processor shipments. At the same time, due to the decline in personal terminal processor shipments and average selling price, the company's gross profit margin under non-GAAP was also 4 percentage points lower than expected.
This is not good news for Tongfu Microelectronics (002156.SZ) which deeply dependent on AMD.
Tongfu Microelectronics' main business is semiconductor packaging and testing services. In recent years, AMD has been the main source of Tongfu Microelectronics' revenue and profit . With the strong rise of AMD, Tongfu Microelectronics has also benefited accordingly, and its scale has achieved rapid growth.
In 2020 and 2021, Tongfu Microelectronics revenue increased by year-on-year respectively. In the first half of 2022, Tongfu Microelectronics increased its revenue but not increased its profits. With revenue growth of 34.95%, its net profit after deducting non-operating items fell by 14.23%; the gross profit margin was 15.99%, a decrease of 2.06 percentage points compared with the same period last year. The cold weather in the sealing and testing industry has arrived.
At present, Tongfu Microelectronics mainly supplies to AMD through two subsidiaries, Suzhou Tongfu Super Micro Semiconductor Co., Ltd. (hereinafter referred to as "Tongfu Super Micro Semiconductor Co., Ltd. (hereinafter referred to as "Tongfu Super Micro Semiconductor Co., Ltd.") and TF AMD MICROELECTRONICS (PENANG) SDN.BHD (hereinafter referred to as "Tongfu Super Micro Penang"). Tongfu Microelectronics holds 85% of the shares of the two companies, respectively. The end user markets of Tongfu Superwei Suzhou and Tongfu Superwei Penang are desktop, laptops, server CPU services, graphics card products and game console products.
In 2021, Tongfu Microelectronics' sales revenue to AMD was 7.037 billion yuan, accounting for 44.5% of its total revenue that year. In the first half of 2022, Tongfu Superwei Suzhou and Tongfu Superwei Penang had revenues of 3.06 billion yuan and 2.786 billion yuan respectively, totaling 5.846 billion yuan, and Tongfu Microelectronics had revenue of 9.567 billion yuan during the same period. Since almost all of Tongfu Supervisor Suzhou and Tongfu Supervisor Penang's revenue comes from AMD, that is, Tongfu Microelectronics' sales revenue increased to 61.1% in the first half of 2022.
On the profit side, Tongfu Superwei Suzhou and Tongfu Superwei Penang's net profits in 2021 were 255 million yuan and 97 million yuan, respectively, totaling 352 million yuan. Considering that Tongfu Microelectronics holds 85% of the shares of the two subsidiaries, the total net profit contributed by these two subsidiaries to Tongfu Microelectronics is 299 million yuan, accounting for 31.2% of Tongfu Microelectronics' net profit attributable to the shareholders in 2021. In the first half of 2022, this proportion further increased to 58.6%.
In fact, among the subsidiaries that disclosed operating results in the first half of 2022, Tongfu Superwei Suzhou and Tongfu Superwei Penang are the only two profitable companies.
. In 2021, among the subsidiaries that Tongfu Microelectronics disclosed its operating performance, 4 of them achieved profitability.
It is not difficult to find that during the industry prosperity in 2021, AMD contributed relatively little to Tongfu Microelectronics' net profit, and in the industry downward cycle, AMD played a mainstay role in Tongfu Microelectronics' net profit.
According to the Manufacturing Service Agreement signed by Tongfu Microelectronics and AMD, Tongfu Supervisor Suzhou and Tongfu Supervisor Penang's revenue to AMD includes the back-end service fee calculated based on the standard cost and the non-added direct material , other direct materials and sales general affairs management expenses. The back-end service fee charged to AMD is determined by a 17.5% increase in the standard cost. Although the cost bonus ratio of
17.5% limits Tongfu Microelectronics to increase prices during the industry's prosperity, it also ensures that Tongfu Microelectronics has a certain profit level at the industry's trough, forming the security pad . And as AMD demand declines, this layer of safety mat will also disappear.
