\u3000\u3000 Shenzhen Fastprint Circuit Tech Co.Ltd(002436) (002436)
Event:
The company plans to build FCBGA packaging substrate production and R & D base in Guangzhou Development Zone. The total investment of the project is expected to be about 6 billion yuan, of which the total investment in fixed assets is no less than 5 billion yuan. The project is constructed in two phases. The first phase is expected to reach production in 2025, with a production capacity of 10 million pieces / month and a full output value of 2.8 billion yuan; Phase II is expected to reach production by the end of 2027, with a production capacity of 10 million pieces / month and a full output value of 2.8 billion yuan; The total output capacity of the two phases of the project is 20 million pieces / month, and the full output value is 5.6 billion yuan.
Core view:
By tackling high-end technology, FCBGA products will become an important bridgehead for the company’s advanced ABF carrier. The carrier products the company plans to invest in this time are mainly used in the packaging mode of flipchip ball grid array (FCBGA). The advantage of this substrate is to greatly improve the electrical and thermal characteristics. With the ultra-high integration of chip circuits, it is required to increase the number of substrate layers and fine integration between layers. At the same time, it is also required to have the production capacity of thin substrates that can realize series thinning. It is usually used for VLSI chip packaging with solder joints over 1000.
The investment of FCBGA products will have a clear complementary effect with the company’s existing products in terms of material process path and application scenario: (1) the company’s existing products are mainly used for the packaging of chips such as storage, camera and fingerprint identification. The main uses of FCBGA include network communication, server MPU, personal computer (CPU / GPU) Ultra large scale programmable logic device (FPGA), AI processor, autopilot, game console, graphics card, application specific integrated circuit (ASIC), etc., and the downstream application space and architecture level have been significantly improved; (2) The company’s existing products are mainly based on BT materials, while many types of FCBGA carrier sectors are based on ABF material technology.
XINGSEN started mass production of IC carrier board in 2014, and then continued R & D investment and team recruitment and training. The number of product layers has been increased from the initial 2-layer board to 3 / 4 / 6 / 7 / 8 layers. The process technology has also been advanced from tenting process to MSAP, ETS, etc. the line width / line distance has been slightly reduced from 30um / 30um to 13um / 13um (mass production) and 8um / 10um (R & D), The technical level and mass production capacity are always at the leading level in China. It is easy to see that the company’s investment in FCBGA carrier sector is based on the existing R & D and production experience of integrated circuit packaging carrier sector, stepping into the most high-end link in this field, which belongs to the further advancement of technical process ability. Moreover, after years of development, the company has formed strategic cooperative relations with many Chinese and foreign integrated device suppliers (IDM), chip design companies (fabless), packaging and testing professional OEM (OSAT), and established a stable supply relationship with equipment and material suppliers. It is believed that the company can successfully break through the FCBGA carrier process and achieve mass production.
Japan, South Korea and Taiwan dominate the high-end IC carrier market, and the market supply continues to be tight. In recent years, with the growth of the global semiconductor market, the growth of IC carrier market is also quite rapid. In 2020, the total sales of global IC carrier reached US $10 billion, with a year-on-year increase of 23.2%. Among them, FCBGA carrier is the segment product with the highest proportion, accounting for about half of the market share. Moreover, with the rise of emerging application fields such as 5g, artificial intelligence, digital center, HPC and intelligent driving, Due to the demands of high integration, large size and multi-layer number of carrier sectors brought by the development of stacked wafer process, FCBGA carrier sector has become one of the products with the fastest demand growth, and is expected to reach an annual compound growth rate of 11.8% from 2019 to 2024.
FCBGA packaging substrate, as a subdivision with the highest technical content and the greatest difficulty in the integrated circuit packaging substrate industry, is currently in a market situation monopolized by overseas manufacturers. The world’s major suppliers include several enterprises in Japan, Taiwan, South Korea and Europe. Including Japan’s ibiden, shinko and Kyocera, South Korea’s Semco, simmteck and daeduck, Taiwan’s umtc, Nanya, kinsus and ASEM, and Europe’s at & S, Chinese local manufacturers are still in the beginning of planning and investment in the field of FCBGA packaging substrate, which is almost in a “blank” situation.
With the surge in demand in big data, 5g, AI, intelligent driving and other fields, the large-size FCBGA packaging substrate has been in a state of capacity shortage for a long time, and the prediction of market demand continues to improve. In addition, with the development of wafer manufacturing process, the integration of high-end chips is higher, resulting in the increase of the size of FCBGA packaging substrate and the number of layers, and the packaging substrate capacity required for the same number of chips increases sharply. In the industrial chain crisis of “chip shortage” from 2020 to 2021, FCBGA was also in serious shortage. Not only did the price rise sharply, but also some upstream suppliers had short-term stock outs for many times. Especially in China, where the carrier base is weak, the industry trend of short supply is more severe. At present, the orders of IC carriers of many chip factories in China are more than 2024, These embarrassing situations have greatly boosted the enthusiasm of Chinese downstream chip and packaging manufacturers to support the localization of FCBGA packaging substrate.
The global chip packaging capacity moves eastward, and the IC carrier board urgently needs to be replaced by domestic products. With the global semiconductor manufacturers and packaging and testing OEM enterprises successively transferring packaging capacity to China in recent years, at the same time, the scale of local chip design and manufacturing continues to expand, and the technical capacity continues to improve. The growth rate of China’s local IC carrier demand is higher than that of the world. Under this background, it is inevitable and correct for domestic IC carrier enterprises to make relevant technological breakthroughs and capacity expansion, However, due to high-tech barriers and capital barriers, most PCB enterprises in China still do not have the conditions and ability to set foot in the IC carrier. So far, only Shennan Circuits Co.Ltd(002916) , Shenzhen Fastprint Circuit Tech Co.Ltd(002436) and Zhuhai Yueya have the capacity of mass production, and the overall market share is less than 5%. The huge gap between supply and demand between strong market demand and scarce local supporting supply will exist for a long time, From this perspective, the landing of XINGSEN’s investment project will break the monopoly of foreign capital on FCBGA board, fill the gap in China and solve another bottleneck technology in the process of chip localization.
The production capacity has been further expanded, and the scale effect of semiconductor business has been emerging. The company’s investment and construction capacity is 20 million pieces / month (including 10 million pieces / month in phase I project), and the planned full output value is about 5.6 billion yuan. It will be constructed in two phases, which will reach production in 2025 and 2027 respectively. At present, the company has a storage BT carrier capacity of 20000 square meters / month in Guangzhou production base. The first phase of the carrier project (Guangzhou Xingke), which cooperates with the large fund, also completed the plant construction at the end of 2021 and began the installation and commissioning of the production line. The planned capacity is 45000 square meters / month. The preliminary calculation shows that even without considering the second phase of capacity construction, by 2025, The annual output value of the company’s IC carrier business is expected to be close to 5 billion yuan, which means that in the next few years, the revenue and profit proportion of the company’s semiconductor business (IC carrier + semiconductor test board) is expected to gradually increase to more than 60%, the overall scale effect will continue to appear, and the enterprise attribute of high-tech science and technology will be further strengthened.
Profit forecast and rating: maintain the buy rating. 2020-2021 is a year of pressure for the PCB industry. The prices of various raw materials in the upstream are rising, which puts great pressure on most PCB enterprises, especially hard board factories. However, Shenzhen Fastprint Circuit Tech Co.Ltd(002436) relying on its own Allegro and small batch special industry attributes, it can smoothly transmit the pressure to the downstream and realize contrarian growth. Through years of hard layout and cultivation, the scale effect of IC carrier board, test board and other semiconductors has begun to take shape. Obviously, the company has begun to enter the high value-added growth cashing period. According to our research model, the net profits from 2021 to 2023 are expected to be 611 million, 735 million and 884 million respectively, and the current stock price corresponds to pe3.0 million 70, 25.51 and 21.20 times, maintaining the company’s buy rating.
Risk tips: (1) the construction progress of semiconductor packaging industry project and the expansion progress of IC carrier sector are not as expected; (2) PCB capacity expansion is less than expected; (3) The progress of the downstream supply chain localization IC carrier replacement is lower than expected.
