The clean room engineering industry has entered the "low profit era"

Since 2021, under the background that the global semiconductor industry has maintained a high prosperity and the trend of domestic substitution is accelerating, domestic fabs represented by SMIC and Hua Hong have announced to increase investment and continue to expand production, driving the rapid development of the clean room engineering industry. .

However, with the gradual maturity of the domestic clean room engineering industry, there are many market participants and increasingly fierce competition. At the same time, under the epidemic, upstream raw materials and labor have skyrocketed. The gross profit margin of Asian Sky Group, Baicheng, and Shenghui Integration has dropped to about 10%. The clean room engineering industry seems to have entered an era of "low profit".

The clean room engineering industry has entered the "low profit era"

In 2021, as the situation of "core shortage" intensifies, the view that wafer production capacity is seriously insufficient has become a consensus in the industry.

Taking the leading domestic foundry manufacturer SMIC as an example, in order to continue to promote the expansion of the existing old factory and the three new factory projects in Shanghai Lingang, Beijing and Shenzhen, 2022 will still be the peak investment period, and the capital expenditure is expected to be about 50%. One hundred million U.S. dollars.

In addition to SMIC, Hua Hong Semiconductor is launching an A-share IPO. Although it has not stated where the funds will be raised, the industry generally believes that production expansion is its main driving force.

At the same time, well-known domestic fabs such as SMIC Shaoxing, Hefei Changxin, Changjiang Storage, TSMC, Jinghe Integrated, and Yuexin Semiconductor have also announced the expansion of production. The construction boom of fabs will definitely drive the market demand for clean room engineering.

Benefiting from the accelerated investment in domestic chip-related fields, in 2021, Asian Sky Group's contracted targets were exceeded and revenue returned to the level before the new crown epidemic, achieving operating income of 2.212 billion yuan, a year-on-year increase of 138.02%; The net profit was 24.9365 million yuan, successfully turning losses into profits.

It is worth mentioning that due to the fierce market competition in 2021 and the rising cost of raw materials and labor services, although Asian Sky Group has increased cost control, its comprehensive gross profit margin is still 8.28% compared with 2020, a decrease of 0.39 percentage points. Only 7.89%.

Previously, Jiwei.com quoted industry insiders to report that ASG is well-known in the industry for its optimization capabilities. And even Yaxiang Integration, which has won many star clean room projects such as Hefei Jinghe, Hangzhou Fuxin, Nanjing TSMC, Suzhou Hejian, Hefei Changxin, Shanghai SMIC, Beijing SMIC, Tianjin SMIC, etc., the gross profit margin has dropped. If it falls below 10%, what about the situation of other peers?

From 2018 to the first half of 2021, the comprehensive gross profit margins of Shenghui Integration were 13.18%, 16.51%, 16.52%, and 12.70%, respectively; the main business of Baicheng. The gross profit margin of the business was 19.06%, 15.55%, 15.35% and 12.24% respectively.

Eleven science and technology, according to the annual report of Taiji Industry, from 2018 to 2020, the gross profit margin of its engineering and technical services was 11.39%, 10.41%, and 10.03%, respectively, in a state of continuous decline.

Obviously, due to the long-term development of the clean room engineering industry, major manufacturers have become increasingly experienced in building factories, and the market competition has become increasingly fierce.

Some economists have said that a sufficiently market-oriented industry will eventually lead to meager profits after sufficient market competition, and the clean room engineering market is also accelerating into the "era of meager profits".

Taiwanese manufacturers actively expand the Southeast Asian market

In fact, the development trend of the clean room engineering industry is the same as that of the semiconductor industry. At first, European, American and Japanese companies dominated the field.

Since 2003, Taiwan-based clean room engineering manufacturers represented by Yaxiang Integration, Hantang Group, and Shenghui Integration have entered the Chinese mainland market with the transfer of Taiwan's electronic information industry to mainland China, and relying on their own technology accumulation And on-site construction experience occupies a leading competitive advantage.

At this stage, Eleven Technology has become the largest integrated circuit engineering design institute in China, and the tenth institute is the leader in the clean room design of the display panel production line. CLP II and CLP IV have strong engineering implementation. Competitive Advantage. Obviously, some leading local companies have gradually reached the international leading level.

In recent years, there has been a serious "price fight" in the clean room engineering industry. Major companies have not only expanded their business in a diversified direction, but also gradually made efforts to overseas markets.

At the same time, with the rise of the Sino-US trade war and the rise in domestic labor prices, the electronic information industry has gradually shifted to regions represented by Southeast Asia, where labor costs are more advantageous. Taiwan-based clean room engineering manufacturers have once again cooperated with customers to develop overseas markets.

Asian Sky Group stated in its 2021 annual report that in terms of overseas market expansion, with the implementation experience of the UMC project in Singapore in 2019 and the USI project in Vietnam in 2020, as well as the resources of the parent company's Taiwanese customers, it is initially able to obtain access to two countries in Singapore and Vietnam. customer orders as a complement to domestic business growth.

The same is true for Shenghui Integration. In recent years, its domestic business has not achieved steady growth, but by actively exploring the Southeast Asian market, it has maintained the company's performance growth trend. During the period from 2018 to the first half of 2021, the income of Shenghui Integration from overseas regions was 58.5271 million yuan, 117 million yuan, 200 million yuan and 313 million yuan, accounting for 6.28%, 12.56% and 18.23% of the main business income respectively. %, 35.28%.