Bright Power announced the fifth price increase since October last year on April 1, 2021, saying that it will make various price adjustments based on specific product models.
Following the release of the price increase letter on April 1, on April 15, Bright Power Semiconductor (晶丰明源, 688368:SH), a Chinese LED driver chip manufacturer, issued a price adjustment letter again, announcing that the cost of upstream raw materials continued to rise. Due to the tight production capacity of the round factory and the packaging and testing factory, the long production cycle and other reasons, the company’s product prices will be adjusted to varying degrees according to the specific product models.
From April 19, 2021, all previously effective but not yet fully delivered orders and new orders are applicable to the adjusted new price. The adjusted price will be valid from April 19, 2021 to the next price until the effective date of the adjustment notification letter, it is applicable to all orders shipped within the validity period.
In addition, the company’s newly released 2020 annual report also mentioned that the semiconductor industry is experiencing a wafer shortage. The net cash flow from operating activities decreased by 107.22% compared with the same period of the previous year. This was mainly due to the company’s active purchase and stocking in response to the increase in product sales during the reporting period. At the same time, in response to the industry’s tight production capacity, the company paid in advance to suppliers to ensure an adequate supply of production capacity. The increase in purchase payments was higher than the increase in receipts due to sales growth.
Bright Power pointed out that in the fourth quarter of 2020, due to the surge in demand for automotive and consumer chips, the balance of supply and demand for wafer production capacity was broken. The global wafer production capacity was tight, and it also led to a shortage of other upstream supply chains. Relying on its own BCD-700V process platform, the company can coordinate between different suppliers according to the overall capacity requirements and the actual conditions of different fabs, without being restricted to a specific upstream manufacturer due to process issues. At the same time, with the support of its own platform technology, the company can introduce new wafer suppliers faster to meet the raw material growth needs brought about by the continuous expansion of business scale.
It was reported that in 2020, the company has completed the research and development of the fifth-generation BCD-700V process platform in terms of production technology. The application of this platform will further reduce product costs and optimize the effective use of wafer production capacity.
Bright Power said that due to the systematic lack of stock in the chip industry, the company has systematically optimized the existing product structure according to future development needs. The company confirms the delivery time according to the product priority, and guarantees timely delivery for products with higher priority, and the delivery time for products with general priority will be extended accordingly.
Judging from the current situation, the tight supply in the semiconductor industry will not be alleviated in the short term. Therefore, the company will continue to strengthen supply chain management, ensure upstream supply capacity, and improve product delivery capabilities.
Soochow Securities Wang Pingyang pointed out that relying on the vast and fast-developing local market, the overall technical level of domestic LED driver IC companies such as Finemad, Sunmoon, and Bright Power has gradually caught up with the international advanced level, and the international competitiveness of related products has been significantly improved. Especially in terms of high-cost performance, it has a great competitive advantage.
In the face of this shortage of stocks and price increases, the Cinda Securities’ party competition team reported on the 12th that many small and medium-sized manufacturers cannot obtain sufficient production capacity or will be eliminated. The supply side of the industry will be improved. Analog chip industry average level repair.
Among them, Bright Power, as the absolute leader in the industry, has a market share of nearly 30%. It has sufficient production capacity guarantee and downstream pricing power. This round of price increases has benefited most. Bright Power’s gross profit margin in the first quarter is expected to increase by more than 10pct from the previous quarter. Sunmoon and Finemad are also expected to perform well in the first quarter.
Source: China Light Network