Longsys’ 2023 annual performance forecast is released, full-year performance is under pressure and rebounds in Q4

Infineon / Mitsubishi / Fuji / Semikron / Eupec / IXYS

Longsys’ 2023 annual performance forecast is released, full-year performance is under pressure and rebounds in Q4

Posted Date: 2024-01-27
Since the New Year, many countries have announced new industrial plans, all focusing on the semiconductor industry, which is in a period of economic recovery. In fact, since the second half of 2023, the semiconductor industry has shown marginal improvement on the demand side, with memory chip prices continuing to rise. According to CFM flash memory market data, the NAND Flash market comprehensive price index rose by 42.7% in the fourth quarter of 2023. The DRAM market comprehensive price index rose 10.7%. This has allowed the fundamentals of relevant companies to be improved and repaired, and many institutions expect that domestic semiconductor manufacturers are expected to usher in a period of explosive performance in 2024.

Recently, many semiconductor companies have disclosed advance announcements of performance increases for 2023, which has also injected a boost into industry recovery and market confidence. On the evening of January 26, Longsys (stock code: 301308), a leading company in the storage industry, disclosed its 2023 performance forecast. The company expects operating income in 2023 to be 10 billion to 10.5 billion yuan; of which operating income in the fourth quarter is expected to be 3.5 billion yuan -4 billion yuan, a year-on-year increase of more than 100% and a month-on-month increase of more than 20%; the net profit attributable to shareholders of listed companies is expected to be 23 million yuan to 83 million yuan, and the company will turn a loss into a profit in the current quarter. On this basis, the company's annual sales revenue exceeded 10 billion yuan for the first time.

In this regard, Longsys stated that the main reason is that the storage industry in which the company is located has been affected by sluggish terminal consumer demand and related adverse macro factors. From January to September 2023, the industry's downward trend since 2022 has basically continued. Relevant public data shows , international storage manufacturers (such as Samsung, Hynix, etc.) have experienced significant losses.

Starting from the end of the third quarter of 2023, the measures taken by international storage manufacturers to reduce production and capital expenditures have begun to have obvious results. At the same time, terminal consumer demand has been superimposed, especially the gradual recovery of major storage application markets such as mobile phones and personal computers. Storage The industry has begun to emerge from the downward cycle, market demand has recovered, and the prices of mainstream memories continue to rise.

The company actively seizes this market opportunity, combines its core technical advantages, takes various measures to vigorously expand its business, and achieves remarkable results.

Vertically deepen enterprise-level and automotive-level storage Building resilience through cycles

Longsys has continued to make efforts in strategic layout in the storage field, expansion and acquisition of packaging and testing business, and global layout during the year. Enterprise-level storage, automotive-grade storage, and self-developed main control chips have all made breakthrough progress, and multiple businesses have made collective efforts. This supports the turnaround growth in performance in 2023 and may also indicate that the company will usher in a new performance turning point.

According to Longsys Jiang, the information and innovation industry is currently the company’s key layout direction. In view of the characteristics of enterprise-level storage technology, such as high difficulty, large investment in R&D, long product development cycle, and strict quality requirements, the company has actively laid out its plans since 2020. Currently, its enterprise-level eSSD and RDIMM products have passed important certifications such as Lenovo, JD.com, and BiliBili. Customer certification, and formal orders from some customers have been obtained to achieve mass production and shipment, which represents the company's new progress in the key market of enterprise storage and has brought new increments to the company's performance growth.

In the automotive grade storage market, according to the latest developments, in December 2023, Longsys successfully obtained the IATF 16949:2016 quality management system certificate and the ISO 9001:2015 quality system renewal certification from the world's leading certification agency TÜV Rheinland of Germany. This marks Longsys has made a major breakthrough in the quality management system of the automotive industry, which also means that Longsys has the qualifications and capabilities to serve the global automotive market. Previously, Longsys' automotive grade eMMC and UFS have passed the AEC-Q100 certification, the core standard system of the automotive electronics industry. The company's UFS2.1 products have completed product verification in multiple automotive clients. According to the progress of customer projects, it is expected to be launched in 2024. Mass production and shipment will begin in half a year. At the same time, the company has also completed the product design and verification of the second-generation automotive-grade UFS product, and has begun sending samples to strategic automotive customers for verification, which will further expand the company's automotive-grade market share.

Horizontally expand storage packaging and testing business Improve the industrial chain layout

In addition to continuing to deepen the vertical layout in the high-end storage field, Longsys also attaches great importance to the horizontal expansion of the storage packaging and testing business sector. In 2023, Longsys successfully acquired 70% of the equity of Yuancheng Suzhou and 81% of the equity of Zilia in Brazil to build a high-end packaging and testing center, achieve both local and overseas industrial chains, and better enhance technical strength and expand market share by integrating resources.

Since then, based on the original system-level integrated packaging design (SiP), firmware algorithm development, and memory chip testing, Longsys will fully lay out the memory chip packaging and testing business, strengthen the vertical collaboration between storage product development and packaging testing, and further enhance product capabilities. and innovation.

Longsys said that the company's self-developed main control chip has also made breakthrough progress. By combining with advanced packaging and testing capabilities, it will fully empower the company's core memory products in the future, effectively improve the quality, performance and safety of each product line, and strengthen the company's Core competitiveness in the storage field.

Judging from the progress of the industry's continued recovery, data from the U.S. Semiconductor Industry Association SIA shows that global semiconductor sales have achieved month-on-month growth for nine consecutive months, reaching US$48 billion in November 2023, a year-on-year increase of 5.3%. Since August 2022 Achieved positive year-on-year growth for the first time. SIA said that semiconductor sales are expected to shift from shrinkage to increase in 2024, and are expected to grow by 13.1%.

The World Semiconductor Trade Statistics Organization WSTS also recently raised its 2024 global semiconductor market sales forecast. It is expected that the total global semiconductor revenue in 2024 will climb to a record high of 588.364 billion U.S. dollars, of which memory chip revenue will increase significantly by 44.8%. Become the main driving force for semiconductor revenue growth.

Memory chips have also ushered in the first wave of price increases. According to overseas media reports, major memory manufacturers such as Samsung and Micron are planning to increase DRAM prices by 15% to 20% in the first quarter of 2024, which will be implemented from January. Customers are urged to plan their future usage needs in advance. This means that the performance of memory manufacturers related to the A-share market will further improve. Industry insiders said that as the United States further strengthens its export controls on chips and the demand for computing power surges, the fundamental recovery of leading A-share memory chip companies may exceed expectations in the context of domestic substitution.

Longsys said that the company adheres to the business philosophy of "brand internationalization, service localization". Driven by the development of semiconductor technology and the growth of emerging markets, it not only has full confidence in its existing business, but will also continue to develop its storage packaging and testing business. Strengthen investment in technology research and development and innovation to promote the company to move to a higher technological level and compete in the global market.

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