Galaxy Microelectronics: “Outsourcing + Homemade” approach to meet chip demand

On August 11, Changzhou Yinhe Century Microelectronics Co., Ltd. (“Yinhe Microelectronics” for short) announced the July 2021 investor survey report. The specific content is as follows:

Q: Are there any price increases for traditional diode and triode products this year? How long will the price increase last, and has the gross profit margin increased significantly?

A: Due to the substantial increase in the price of raw materials, the company’s product costs have risen, so the company has also adopted corresponding price adjustment strategies in product sales to increase prices appropriately. The industry is developing in waves, and the product demand and price increase are not static. Therefore, the company fully takes into account the stability of customer resources while ensuring the gross profit margin, in order to achieve long-term cooperation and rational and win-win results.

Q: What is the current capacity distribution and what is the expansion plan for next year?

A: According to the project plan of fund-raising, the construction of related plant and equipment procurement are currently being carried out in an orderly manner. Please refer to the “Special Report on the Deposit and Actual Use of Funds Raised in the First Half of 2021” for the specific progress of the fundraising projects.

Q: Are the company’s products currently entering the automotive field? What is the product layout?

A: The company’s products have a wide range of downstream applications, including computers and peripheral equipment, household appliances, adapters and power supplies, network communications, automotive electronics, industrial control and other fields. At present, automotive-related products are mainly used in car audio, lighting, motor drives, etc. The company will continue to focus on the main semiconductor business in the future.

Q: Does the company follow the IDM model or the external foundry model?

A: The two modes of IDM and vertical division of labor exist widely in the discrete device industry. The company is based on packaging and testing expertise, and currently has the integrated management capabilities under the IDM model. Based on product characteristics and industry requirements, the company adopts a combination of “outsourcing + self-made” to meet chip needs, taking into account the development of technical capabilities and Cost advantage.

Q: Will the company deploy modular products in the future? Such as IGBT module and so on.

A: With the modernization of technology, the intelligence and modularization of the whole product is an inevitable trend. The company will choose corresponding products to develop according to its own development needs.

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