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on the afternoon of september 2, xinlian integrated circuit held a semi-annual performance briefing for 2024. in the first half of 2024, xinlian integrated circuit achieved operating income of 2.88 billion yuan, a year-on-year increase of 14.27%; and achieved a net profit attributable to the parent company's owners of -471 million yuan.

the listed company said in the performance briefing that in the first half of the year, benefiting from the demand of new energy vehicles and consumer markets, the rapid growth of the company's new production line revenue directly led to an increase in the company's revenue. at the same time, the company continued to improve its competitiveness through strategic cooperation and collaboration with suppliers, and its operating results continued to improve.

power market: market share concentration

during the earnings briefing, an analyst asked about the reasons for the growth in xinlian's integrated power module market share.

in this regard, yuan feng, chairman of xinlian power, a subsidiary of xinlian integrated circuit, said that the growth of silicon carbide and power modules mainly comes from the increase in demand from leading customers and the increase in demand for domestic substitution. the domestic substitution of power modules may be the fastest growing among new energy sources.

in addition, yuan feng also said that the obvious trend of the power market is centralization. igbt (insulated gate bipolar transistor) orders are now concentrated in a few suppliers. only a few suppliers can get fixed orders, and other suppliers with backward technology and scale are quickly excluded.

as for silicon carbide, it is more complex than igbt technology, and it is expected that the market concentration of silicon carbide may exceed that of igbt. xinlian integration has successfully entered most of the mainstream domestic new energy brands mainly through technological innovation, quality improvement and better cost performance. the company has grown together with china's new energy industry and is becoming a major player in this market.

at the same time, xinlian integration actively promotes overseas market expansion and continuously enhances the company's reputation and market influence. the company's power and mems (micro-electromechanical systems) products have successfully entered multiple overseas leading terminals and achieved mass production.

in addition, some analysts also asked about the design win project. yuan feng responded that design win refers to a project in which large terminals determine the supply point for orders for long-term projects. these projects usually have a long life cycle and high quality requirements, and require the terminal to undergo a long period of verification. orders will only be given after confirming that the quality, technology, and cost are competitive. correspondingly, the stability of such orders is more guaranteed. obtaining the design win project means that the company has been recognized by customers for its technology and product quality, laying the foundation for long-term cooperation in the future. these projects will bring the company a stable source of orders and continued growth in revenue. the cycle from design win to completion of verification and batch production of new energy vehicle products is generally 1.5 to 2 years, so the design wins accumulated by the company in the past two years will enter mass production from the second half of this year, and stable growth is expected in the next 2 to 3 years.

some low-end production capacity of power devices is already in excess

in its investor activity record, sinlink also stated that the company's revenue growth mainly came from the joint promotion of three major areas and domestic substitution demand. the three major areas are new energy vehicles, high-end consumption and new energy wind, solar and storage.

in the field of new energy vehicles, xinlian integration believes that the new energy vehicle market is accelerating into a centralized stage, and with its technological advantages, the company is expected to continue to increase its market share. in the field of new energy wind, solar and storage, xinlian integration said that after several years of product development and market development, the company has formed a complete product series and has penetrated into the supply chain of leading system manufacturers. with the continuous expansion of the new energy market and the increase in policy support, the sales volume of the company's related products is expected to achieve rapid growth.

looking ahead to the second half of 2024, xinlian integrated circuit said that it is cautiously optimistic about the recovery of the consumer market. the continued implementation and popularization of ai technology will inevitably drive the growth of consumer markets such as mobile phones and laptops, bringing new growth points to the company. china's overall new energy vehicle market is still growing, and restrictions on fuel vehicle emission standards will further promote the increase in the market share of new energy vehicles. the new energy wind, solar and storage market has gradually seen a bottoming out and recovery, and with the continuous increase in policies and the gradual release of effective demand, the new energy wind, solar and storage market will further expand.

regarding the overcapacity of power devices, zhao qi, general manager of xinlian integrated circuit, said that the current overcapacity of power devices is mainly concentrated in the low-end market. with the advancement of technology and changes in market demand, the power device market will show a situation of tight high-end capacity and overcapacity at the low end in the future. as the installed capacity of power devices has exceeded market demand, some low-end capacity has begun to be overcapacitated.

at the same time, in the automotive and new energy industries, which have high requirements for technology and reliability, the supply of power devices has begun to show a trend of early centralization. with the rapid development of the automotive and new energy industries, the technical requirements and quantity demand for power devices are still increasing, which will accelerate the elimination of backward production capacity and form a new market structure with strong barriers.

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