Electronic Enthusiasts Network reported (text/Liu Jing) On June 30, the domestic analog and digital-analog hybrid IP supplier Ruichengxin Micro Technology Innovation Board IPO was accepted. The listing plans to raise 1.304 billion yuan for projects such as the research and development of new physical IP products and the development and certification of automotive-grade IP solutions.

Founded in 2011, Ruicheng Microelectronics is an enterprise that is deeply engaged in the design, authorization and service of integrated circuit intellectual property (IP) products. Its main products and services include analog and digital-analog hybrid IP, embedded storage IP, wireless RF communication IP and Semiconductor IP authorization services such as wired connection interface IP and chip customization services are widely used in 5G, Internet of Things, smart home, automotive electronics, smart power supply, wearables, medical electronics, industrial control and other fields.

Ruicheng Microelectronics has a leading position in the field of physical IP segmentation of integrated circuits. According to the IPnest report, in 2021, Ruicheng's analog and digital-analog hybrid IP and wireless RF communication IP will rank third in the world and first in China, with a market share of 6.6% and 4.5%, respectively.

Since its establishment, it has been favored by capital and completed four rounds of large-scale financing. The investor was shocked to discover the domestic new energy vehicle “giant” BYD, holding 2.27% of Ruichengxinwei. The largest shareholder is Mr. Xiang Jianjun, the current chairman of Ruicheng Microelectronics, holding 33.53% of the shares.

Net profit will increase 11 times in 2021, and the growth of wireless RF communication IP will be outstanding

According to the prospectus, from 2019 to 2021, Ruichengxin Micro achieved operating income of 105 million yuan, 232 million yuan, and 367 million yuan, respectively, and the net profit achieved in the same period was -15 million yuan, 0.04 billion yuan, and 47 million yuan; The gross profit margins of the main business were 18.95%, 21.75% and 29.85% respectively.

In general, the revenue has continued to grow steadily in the past three years, and the net profit has suffered losses in 2019. After turning losses into profits in 2020, it has entered a high-speed growth, and the increase in 2021 will be as high as 1141.94%. The gross profit margin has been increasing year by year, with an increase of 8.1 percentage points in 2021.

Ruicheng Microelectronics, which is committed to the IP design of integrated circuit intellectual property rights, currently mainly obtains revenue through semiconductor IP licensing services and chip customization services.

Figure: Schematic diagram of Ruichengxin's main business

The main source of revenue comes from chip customization services, which include wafer manufacturing engineering services and chip design services. From 2019 to 2021, the revenue was 87 million yuan, 176 million yuan, and 257 million yuan, accounting for 83.37%, 75.88%, and 70.05% of the current total revenue, of which 60 to 80% of the revenue came from wafers Manufacturing Engineering Services.

The semiconductor IP licensing service business contributes about 20% of the revenue of Ruicheng Microelectronics, of which the revenue mainly comes from analog and digital-analog mixed IP. The revenue of this product from 2019 to 2021 is 13 million yuan and 23 million yuan respectively. , 46 million yuan, accounting for 75.24%, 48.98%, and 56.55% of the current revenue of semiconductor IP licensing services, respectively.

Figure: Schematic diagram of Ruichengxin's micro-analog and digital-analog hybrid IP products

In 2021, the revenue of analog and digital-analog mixed IP, wireless radio communication IP, embedded storage IP, and wired connection interface IP will be 46 million yuan, 20 million yuan, 07 million yuan, and 04 million yuan, up 103.51% and 260.47% year-on-year respectively. , -36.73%, -17.04%, it can be seen that the strongest revenue growth performance is the wireless radio frequency communication IP products.

Radio frequency communication IP is an IP function module that uses radio frequency technology to realize functions such as wireless communication, data transmission, audio and video transmission and reception. At present, Ruicheng Core Micro mainly has Bluetooth RF IP (short-range) and GPS RF IP (long-range) products. The Bluetooth RF IP can support up to Bluetooth 5.2 version and is backward compatible; the GPS RF IP supports GPS and Beidou dual-mode dual-channel work. model.

Figure: Schematic diagram of Ruichengxin's wireless RF communication IP products

In terms of customers, Ruicheng Microelectronics has established stable cooperative relationships with companies such as Deyiwei, Shenzhen Hangshun, Gekong Intelligence, Institute of Computing Technology of the Chinese Academy of Sciences, Hangzhou Guoxin, China Resources Micro Holdings, Saipu Weishi, and Customer A. The products have entered the supply chain system of ZTE Microelectronics, BYD, Ziguang Tongxin, Hisense, TCL, Silicon Power, Broadcom, Core Source Systems and other manufacturers. At the same time, Ruicheng Microelectronics is also developing physical IP on the process platforms of international wafer giants such as TSMC, UMC, and SMIC.

The sub-sector ranks among the top in the world

The main business of Ruichengxinwei is physical IP design, authorization and related services, specifically analog and digital-analog hybrid IP, wireless RF communication IP, embedded storage IP, and wired connection interface IP. According to IPnest data, the physical IP market size in 2021 will be US$2.269 billion, and the market size of each sub-category will be: US$110 million for analog and digital-analog hybrid IP, US$71 million for wireless RF communication IP, US$526 million for embedded storage IP, Wired connection interface IP 1.306 billion US dollars. The physical IP market is expected to expand to USD 4.613 billion in 2026, with wired connection interface IP and embedded storage IP seeing the fastest growth.

The competition pattern of the semiconductor IP market is dominated by British and American manufacturers. Among them, Synopsys from the United States has the largest global market share and will occupy 30.7% of the global IP market share in 2021; AMR ranks second, accounting for up to 25.2% of the IP market share. In 2021, only VeriSilicon, M31, Faraday, Andes, and eMemory will be the top 20 Chinese suppliers of global semiconductor IP, which together account for 5.1% of the global market share. Ruichengxinwei ranked 21st, accounting for 0.4% of the global IP market share.

However, in the field of subdivision, Ruicheng Xinwei is still quite advantageous, ranking among the top in the world. According to the data disclosed by IPnest, Ruicheng Microelectronics ranks third in the world and first in China in the fields of analog and digital-analog hybrid IP and wireless RF communication IP. It is reported that Ruichengxinwei's wireless radio frequency communication technology supports standard communication protocols such as Bluetooth Low Energy (BLE), Classic Bluetooth (BT), Satellite Navigation (GNSS), and has the competitive advantages of low power consumption, high sensitivity and transmit power.

In terms of operating income, the comparison between Ruicheng Microelectronics and A-share listed companies with semiconductor IP authorization or chip customization services is as follows:

In 2021, Ruicheng Semiconductor's IP licensing and chip customization service business will achieve revenue of 82 million yuan and 257 million yuan respectively. In terms of semiconductor IP licensing revenue, Ruicheng Microelectronics is higher than Cambrian and Aojie Technology, but lower than VeriSilicon and Guoxin Technology. In terms of chip customization service revenue, it is second only to VeriSilicon and ranks second among comparable listed companies.

In terms of gross profit margin, the gross profit margin of Ruichengxinwei's main business has increased year by year, of which semiconductor IP authorization services and chip design services will be as high as 88.39% and 54.05% respectively in 2021. The gross profit margin of Ruichengxinwei's semiconductor IP licensing service business is lower than the industry average, and lower than that of Guoxin Technology, Aojie Technology, Cambricon, and Xinyuan. This is mainly related to the different types of IP authorizations between enterprises. Ruicheng Microelectronics mainly authorizes physical IP, while VeriSilicon, Guoxin Technology, and Cambrian are digital IPs. Digital IPs cost almost nothing, and the gross profit margin is close to 100%. %.

In terms of research and development, from 2019 to 2021, Ruicheng Microelectronics invested 23 million yuan, 30 million yuan, and 46 million yuan respectively, accounting for 21.57%, 12.77%, and 12.41% of the current total revenue, respectively. In 2021, R&D investment will increase by 53.33% year-on-year, and R&D expenses in the past three years are higher than sales expenses and administrative expenses.

Compared with comparable companies in the same industry, the R&D expense rate of Ruicheng Microelectronics is relatively low, and the R&D investment is slightly insufficient. It is worth noting that among the comparable companies in the current semiconductor IP design, Aojie Technology, Cambrian, and VeriSilicon, which have higher R&D expense rates, will continue to lose money from 2019 to 2021.

It is reported that Ruicheng Microelectronics has mastered low-power power management technology, low-power high-precision clock technology, low-power signal conversion technology, embedded MTP storage technology, embedded eFlash storage technology, wireless radio frequency communication technology, wired connection technology The core technologies such as interface transmission technology solve the technical difficulties such as high power consumption and low sensitivity in the industry.

Raised 1.304 billion to develop new physical IP products and develop automotive-grade IP solutions

Since its establishment in 2011, Ruicheng Microelectronics has first carried out the research and development of analog and digital-analog hybrid IP. In 2013, it began to enter the field of wired connection interface IP. In 2015, it expanded to the research and development of embedded storage IP in the field of IoT data storage. In 2016 It also extends to the field of Internet of Things wireless communication, and develops wireless radio frequency communication IP. In 2020, Ruicheng Microelectronics will rapidly improve wireless radio frequency communication technology and launch Bluetooth radio frequency IP through the acquisition of Shengxin Microelectronics.

The listing plans to raise funds of 1.304 billion yuan to invest in the construction of "existing physical IP product upgrade and process expansion", "global physical IP product development and vehicle-level IP solution development certification", "Ruichengxin Micro IP Global Innovation Center" ”, “Strategic Investment and M&A Integration” projects and replenishment of working capital.

The "Existing Physical IP Product Upgrade and Process Development" project with an investment of 335 million yuan is mainly aimed at iterative upgrade of the existing physical IP. Now products in the IoT field are developing in the direction of low power consumption, small area and high reliability. We follow the changes in the demand of downstream terminal products, further improve IP performance, optimize IP architecture design, and enrich IP functions.

The new products developed by the "Global Physical IP Product R&D and Vehicle-level IP Solution Development Certification" project with an investment of 449 million yuan include: a new series of high-performance power management, clock and signal conversion analog and digital-analog hybrid IP; new architecture eFlash IP, PUF IP in the field of information security, single write storage IP; new RF communication IP supporting UWB, ZigBee, 2.4GHz/5GHz dual-band Wi-Fi6 and other wireless communication protocols; supporting MIPI C-PHY, USB3.0, PCIE4.0 and other interface protocol IP; develop physical IP that meets ISO 26262 standard and AEC-Q100 specification and other vehicle-level requirements.

The "Ruichengxin Micro IP Global Innovation Center" project with an investment of 320 million yuan will build an IP R&D center and laboratory, and recruit IP R&D talents from all over the world, aiming at new application directions in the field of Internet of Things, new categories of physical IP and other directions. R&D.

In addition, in the future, Ruicheng Microelectronics may seek mergers and acquisitions, and follow Synopsys and Kengten Electronics to rapidly improve through mergers and acquisitions, and to deploy embedded storage IP and wireless RF communication IP technologies with a short time.

In general, the future development strategy of Ruichengxinwei is mainly to establish a high-quality R&D team, upgrade the existing physical IP technology, focus on the development of a new generation of physical IP, expand and enrich IP types, and at the same time develop overseas markets and strive for a larger market share.

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