NO.1 offers 50 billion!

Alibaba is rumored to acquire shares of Ziguang!

In new news, Alibaba Group and several government-backed companies are considering acquiring a stake in cloud computing infrastructure company Unisoc, with a bid that could be as high as 50 billion yuan, according to people familiar with the matter. Tsinghua Unigroup, which has about $31 billion in debt, is looking to sell its 46.45% stake in the company as more bonds are due to mature.

Just last week, Ziguang Group received a notice from the Beijing No. 1 Intermediate People’s Court that the creditor Huishang Bank Co., Ltd. applied to the Beijing No. 1 Intermediate People’s Court to reorganize Ziguang Group. (Related reading: 300 billion chip giant Ziguang goes bankrupt? Netizens say: alarmist)

If Alibaba submits a binding bid before the July 20 deadline, it will partner with a local government-owned company, two people familiar with the matter said. They did not name the potential partner.

Two of the people familiar with the matter said that Ziguang’s shares may be worth between 40 billion yuan and 50 billion yuan (about 6.2 billion to 7.7 billion US dollars). According to Reuters estimates, this would be a premium of 34% to 68% over the stock's average price of 22.4 yuan over the past month. Tsinghua Unigroup said in a statement that in order to reduce debt risks, it had "reached out to several investors under the guidance of a dedicated working group brought in from outside."

According to Wind data,Ziguang Group's current default principal and interest totals approximately 6.883 billion yuan. At the end of December this year, Ziguang Group had a 1.3 billion yuan bond that was about to mature.This is not only because of the high cost of chip research and development, but also because the group has made a series of large-scale acquisitions and "recruited globally."Information shows that in the past six years, Ziguang Group and its affiliated companies have launched merger offers for more than 20 companies, investing more than 100 billion yuan.

NO.2 Price increases continue! Lingtong MCUQ3 price increases again!

Hikvision/Dahua took the lead in raising prices, with high-end security products exceeding 10%

Although the traditional peak season in the second quarter has passed, MCU manufacturer Lingtong will benefit from strong orders for external lenses, touch home appliances, and toys, and its business performance will continue into the second half of the year. For the second quarter, Lingtong's June revenue reached 325 million yuan (NT$, the same below), a monthly increase of 1.48% and an annual increase of 24.02%. The full quarter revenue was 948 million yuan, a quarterly increase of more than 30%. Looking at the overall MCU industry, due to the continued increase in supply chain costs, there is still room for price increases in the third quarter. Costs are appropriately reflected, and operations in the third quarter are expected to maintain high-end results. The key remains changes in production capacity.

Looking forward to the third quarter, the overall MCU market situation continues to be tight due to the tight production capacity of the 8-inch supply chain. There is still room for price increases to reflect the increasing costs. The increase will vary according to different products and customers. However, in terms of supply, it is still quite tight and demand exceeds supply, and shipments may still be limited.

Affected by the price increase of upstream chips, the price increase of security products has intensified since June. Unlike the wave of price increases in March and April this year, the price increase of this round of low-end security equipment is limited.However, high-end products saw larger increases. Among them, for high-end products, the price of a single model has been increased by about 30 yuan, and the price increase of some products has even exceeded 10%.In the low-end field, only some product prices increased, and the increase was in the single digits.

"The price of upstream chips has doubled, and the profits of products are getting thinner and thinner. Now low-end products have been sold at a loss." The industry leader, known for its high cost performance, has been selling at a loss. "Recently, chips are priced at a weekly price, and some (components) are even priced at a daily price. Recently, Over a period of time, more than a dozen semiconductor companies in the security industry chain have collectively issued price increase letters, which has put great operating pressure on security companies. The price increase of chips has exceeded our ability to bear it. Some low-end products are already being sold at a loss. If we don’t increase the price, we will definitely lose money.”

Industry insiders have a negative attitude towards the prospect of alleviating the chip shortage. It is generally believed that the price of security chips will continue to rise in the future, and that security equipment will also continue to passively rise in price.On June 8, industry leader Hikvision issued a price increase letter stating that due to the overall increase in upstream raw material prices, product production costs continued to rise, and due to operating pressure, it raised the prices of some products.

NO.3 Progress of domestic “core”

18,800 new chip companies were added, and 89 companies went for IPO

The global chip shortage has forced the development of domestic semiconductors. It is understood that in the first half of 2021, there were 18,800 new domestic chip-related companies, a year-on-year increase of 171.8%. They are the "new force" of domestic semiconductors. They aim at the opportunities of Chinese chip entrepreneurship and actively embrace the terminal demand for domestic substitution and domestic upgrades, making the domestic semiconductor industry ecology more active.

Overall, there are currently 72,000 chip-related companies in my country, of which Shenzhen (13,000), Guangzhou (6,000), and Shanghai (4,000) are the cities with the most chip companies. Guangdong Province ranks first with 23,000 companies, accounting for 31.9% of the total. It is worth noting that the data is collected based on the keyword "chip", which is not necessarily accurate and may cause individual omissions.

In summary, thanks to the generous investment from large national funds and strong policy support, the global "chip shortage" may continue until 2022, and China's semiconductor industry has entered a "golden period" of development. But we cannot be blindly optimistic. Due to the high threshold of semiconductor manufacturing technology, the large amount of capital required, and the long payback period, so-called thunderstorms have occasionally been reported. For example, the “unfinished projects” of Wuhan Hongxin and Jinan Quanxin. Therefore, in the future, it will be critical to ensure the healthy development of my country's integrated circuit industry.

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