Performance for the first quarter looks good, and losses during the period are greatly slashed

HC SemiTek disclosed the 2019 annual report and the performance forecast for the first quarter of 2020 on April 2. According to the first quarter forecast, the loss for the first quarter is estimated at 77 million to 72 million yuan, a significant reduction compared to the same period last year. Starting with the third quarter of 2019, HC SemiTek’s losses have narrowed quarter by quarter, from the “darkest hour” in the second quarter of 2019 to the “new beginning” in the second half of 2019, and obvious improvement in the first quarter of 2020. It shows that HC SemiTek’s strategic adjustment has yielded results, laying the groundwork for subsequent development.

In the performance forecast, HC SemiTek states:

Due to the impact of the COVID-19 epidemic, the revenue scale in the first quarter of 2020 dropped significantly month-on-month compared to the fourth quarter last year. Therefore, during the reporting period (after deducting the impact of exclusion of MEMSIC in the consolidated financial statement), the revenue of the LED segment dropped slightly compared to the same period last year.

In the first quarter, the proportion of shipments of high-end LED-backlit chips, high luminous efficacy LED chips, and Mini LED chips increased significantly quarter-on-quarter, and the product structure adjustment had a significant effect, resulting in a large increase in profits. This basically offset the impact of a slight decrease in income caused by the epidemic on profits, and is expected to support the company’s performance in the second quarter.

 For LED chip manufacturers, it is crucially important about how to seize the opportunity to choose a market segment in order to gain a long-term competitive edge. As the industry shakedown intensifies, leading enterprises in the industry with a large scale, technological strength, and improving operating efficiency will be more competitive in the long term. The company will focus on such fields as Mini LED, Micro LED, and high-end lighting, and harness its technical capabilities in the LED industry to seek growth opportunities in the compound semiconductor sector.

      Adjust strategic layout of products and feel optimism about Mini LED market demand

Since the second half of 2019, HC SemiTek made strategic adjustments to its products, and put its focus on the main business of LED chips. It concentrates on the new high-end markets of Mini LED and Micro LED, and continues to maintain and expand its leading status and competitiveness in the LED field.

HC SemiTek expects that demand for Mini LED will gradually grow in the second half of 2020. Since 2019, corporate giants such as Hisense, TCL, Konka, Acer, AUO, and BOE have launched Mini LED backlit TV, monitors, VR and on-board display terminal products and solutions. The market demand for Mini LED has immense scope for growth, from which leading chip manufactures benefit the most.

HC SemiTek is one of the earliest manufacturers to enter the Mini LED research field, and also one of the few to master small-size flip-chip technology and display chip technology. It is the first to solve light splitting problems and high gray scale display problems caused when Mini LED is applied to COB. It is a world leader in terms of the reliability and yield of red-light Mini LED products. By leveraging its leading position in products and technology, the company forges in-depth cooperation with terminal brand manufacturers as well as module manufacturers, becoming the sole partner of key customers in the industry for mini products. Thanks to its deep involvement in the Mini LED industrial chain, it has a better say and pricing power in the Mini LED market. At the same time, the company has developed new-generation Mini LED chip technology with better price-performance ratio which can be applied to smaller-pitch displays. HC SemiTek boasts distinct market leadership advantage.

HC SemiTek said that the LED market share will be concentrated in leading enterprises. The future market opportunities lie in the company’s technological advance and better market layout. In conjunction with its advantages, HC SemiTek can tap the needs of market segments and gain a long-term competitive edge.

Make constant technological advance and actively develop third-generation semiconductors

Dustrial technology in the long term, and harnesses scientific research advantages to explore and develop forward-looking technology for third-generation semiconductors and broaden product lines, with great results. HC SemiTek attaches great importance to the independent R&D and technological innovation, and scales up investment in R&D. This plays an active and effective role in adjusting the product strategy layout, boosting market share, and developing third-generation semiconductors.

  In 2019 and early 2020, HC SemiTek’s third-generation semiconductor technology achieves the recognition of the government and the market. HC SemiTek has been approved as a provincial key lab, provincial enterprise technology center, provincial postdoctoral workstation, etc. The company also reaches a new height in R&D strength and technical reserve.

HC SemiTek is making the strategic layout of third-generation semiconductor technology. HC SemiTek will continue to focus on the main business of LED, follow technological progress in other emerging areas of third-generation semiconductors, and lay a stronger foundation for its development.

The future of full of expectations for HC SemiTek.