according to the announcement of the results of the review meeting of the municipal Party Committee on the science and Innovation Board on February 22, Yongsi electronics meets the issuance conditions, listing conditions and information disclosure requirements.
Prior to this, the leading company in the semiconductor packaging and testing industry Jcet Group Co.Ltd(600584) continued to report Yongsi electronics, accusing the latter of unfair competition, infringing on the company’s trade secrets and causing the loss of talents and technology. Yongsi electronics also disclosed a 162 page self-examination report on the eve of the meeting, denied many allegations of Jcet Group Co.Ltd(600584) , insisted on no violations, and explained the rationality of the rapid growth of the company’s performance and the independence of customers.
This “battle” in the semiconductor packaging and testing industry has been fought for three months. The two sides have come and gone for many rounds, and there is still no final conclusion so far.
Jcet Group Co.Ltd(600584) relevant people told the reporter of securities times · e company that for the case of unfair competition of Yongsi electronics, they have received the hearing notice of Wuxi intermediate people’s court, and it is expected that the hearing will be held successively in March and April. Jin Liangkai, board secretary of Yongsi electronics, continued to deny the relevant allegations of Jcet Group Co.Ltd(600584) in an interview with reporters. However, Jin Liangkai also said that Yongsi electronics is actively seeking reconciliation with Jcet Group Co.Ltd(600584) . “The settlement letter has been sent to the other party.”
the “battle” of sealing and testing industry starts
Yongsi electronics, located in Yuyao, Zhejiang Province, has been established for more than four years. Thanks to the overall prosperity of the semiconductor industry, the operating revenue reached 748 million yuan and the net profit reached 27.8514 million yuan in 2020; In the first half of 2021, it continued to soar, with a revenue of 836 million yuan and a net profit of 108 million yuan.
Jcet Group Co.Ltd(600584) 2003, which is listed in Jiangyin, Jiangsu, has now become the third largest Chinese mainland seal testing company in the world. In 2020, it achieved a business income of 26 billion 464 million yuan and a net profit of 1 billion 304 million yuan. In 2021, Jcet Group Co.Ltd(600584) is expected to have a net profit of 2.8 billion yuan to 3.08 billion yuan, with a year-on-year increase of 114.72% to 136.20%.
According to the 2020 data, the revenue scale of Jcet Group Co.Ltd(600584) is more than 35 times that of Yongsi electronics. Therefore, the volume of the two is far from the same order of magnitude. The background for Jcet Group Co.Ltd(600584) reporting is that Yongsi electronics has continuously joined employees, senior executives and core technicians who have Jcet Group Co.Ltd(600584) experience since the beginning of entrepreneurship. Data show that during the peak period, employees with long-term experience once accounted for more than 70% of Yongsi electronics. In the industry, Yongsi electronics is also known as “xiaochangdian”.
After Ningbo silicon electronics submitted its listing application, Jcet Group Co.Ltd(600584) launched a series of actions. Is it intended to “block” the listing of Ningbo silicon electronics?
in response, Jcet Group Co.Ltd(600584) told the reporter of the securities times · e company that the legal action was based on the infringement and consequences of Yongsi electronics against Changdian, and only based on its own judgment of the case and the progress of evidence collection.
The person also said that the development mode of Yongsi electronics taking away the long-term power technology by digging people not only causes great losses to Jcet Group Co.Ltd(600584) , but also is not conducive to the healthy development of the semiconductor industry. Such disorderly competition will bring lasting damage to the country’s overall competitive strength. “Maintaining the healthy development of the industry and preventing ‘cross stage’ development through hunting industry leading enterprises under the blessing of hot money are the problems that industry leading enterprises and industry competent departments need to face together.” Jcet Group Co.Ltd(600584) stressed that.
On the eve of the meeting, Yongsi electronics disclosed a 160 page self-examination report to prove its innocence. The company denied stealing Jcet Group Co.Ltd(600584) trade secrets and illegally applying for patents by soliciting Jcet Group Co.Ltd(600584) resigned personnel, denied violations, and explained the rationality of the rapid growth of the company’s performance and the independence of customers.
large angle digging or normal flow?
The focus of the dispute between the two sides is whether there is a large number of poaching and commercial disclosure.
According to the report of Jcet Group Co.Ltd(600584) , Yongsi electronics and some executives infringed Jcet Group Co.Ltd(600584) trade secrets by unfair competition, resulting in the loss of Jcet Group Co.Ltd(600584) talents and technology; Some employees of Yongsi electronics hold the shares of Yongsi electronics through others during their employment in Jcet Group Co.Ltd(600584) , which violates the conflict of interest policy of Jcet Group Co.Ltd(600584) and the employees’ basic obligations of integrity and loyalty.
According to the information disclosed by Yongsi electronics, as of May 15, 2021, there were 2227 issuers, including 766 from Jcet Group Co.Ltd(600584) . As of November 30, 2021, Jcet Group Co.Ltd(600584) background personnel totaled 692, accounting for about 1 / 4 of the 2821 total employees.
Jiangyin, Jiangsu Province is about 250km away from Yuyao, Zhejiang Province. Why do Jcet Group Co.Ltd(600584) employees flow into YongSi Electronics? Yongsi electronics responded that the mobility of front-line operators in the whole integrated circuit industry, especially in the packaging and testing industry, is already great.
“The mobility rate is about 20%. Not only are we like this, but also Jcet Group Co.Ltd(600584) , Tongfu Microelectronics Co.Ltd(002156) , Tianshui Huatian Technology Co.Ltd(002185) are very mobile. When workers go home at the end of each year, they don’t necessarily come back after the new year.” The source also said that compared with Jiangyin City where Jcet Group Co.Ltd(600584) is located, the cost of living in Yuyao where Yongsi electronics is located is much lower. “This should be the choice of workers themselves. We have no targeted excavation from Jcet Group Co.Ltd(600584) .”
Yongsi electronics said in its self inspection report that the number of employees from Jcet Group Co.Ltd(600584) has decreased significantly since the fourth quarter of 2020. In addition, about 70% of the employees from Changdian are mainly engaged in production positions and do not involve product and technology research and development. The flow of personnel will not lead to the loss of trade secrets such as technical secrets and business secrets.
For the knowledge intensive IC industry, the flow of personnel is not only considered from the number of people, but also the change of core talents is particularly important. The reporter noted that the data issued by the two sides are slightly different in terms of the proportion of core talents: Jcet Group Co.Ltd(600584) preliminary investigation shows that as many as 32 of the only 38 patent inventors of Yongsi electronics are Jcet Group Co.Ltd(600584) , accounting for 84.21%. According to the self-examination report of Yongsi electronics, Jcet Group Co.Ltd(600584) patent inventors are 38, with a total of 75 employees, accounting for 42% to 50%.
In addition, according to Yongsi electronics, 11 employees from Jcet Group Co.Ltd(600584) have signed or are not sure whether to sign the contract with non competition obligation after leaving, but these employees have not received the non competition compensation paid by Jcet Group Co.Ltd(600584) , so they are not required to bear the non competition obligation; Some personnel with confidentiality obligations do not violate the legal confidentiality and agreed confidentiality obligations with Jcet Group Co.Ltd(600584) .
In an interview, Yongsi electronics also emphasized the above views again.
Insiders in the electronics industry told reporters that generally, for resigned employees who have signed a competition agreement, the company needs to pay 50% of the salary before leaving as compensation. The timeliness is about one year. If the corresponding compensation is not paid, the agreement will be difficult to perform.
On the other hand, there was a phenomenon that the shares were held on behalf of the senior executives of Yongsi electronics during their tenure of Jcet Group Co.Ltd(600584) .
According to the self-examination report, Xu Yupeng, Bao Yujun, Wang Xiaofang, Zhu Shasha, Yu Susu, Guo Zhiyong, Lu Liang and Gao Chengyi held a total of 4.73% of Yongsi electronics shares, including 2.5 million shares held on behalf of Changdian during their tenure. However, Yongsi electronics said that according to the employee verification and commitment letter issued by relevant personnel, it did not receive any prohibitions related to foreign investment during its employment in Jcet Group Co.Ltd(600584) . At the same time, it denied that the relevant personnel had commercial disclosure after taking office in Jcet Group Co.Ltd(600584) and joining Yongsi electronics.
In response, Jcet Group Co.Ltd(600584) people responded to the reporter of securities times · e company and pointed out that Xu Yupeng and others held the shares of Yongsi electronics through the holding arrangement of Yongsi electronics during their tenure in Changdian, which violated the basic obligation of loyalty of employees and did not report the holding of competitor shares to the company.
The period when Jcet Group Co.Ltd(600584) personnel flow to Yongsi electronics is also in the stage of Jcet Group Co.Ltd(600584) shareholder structure change and management replacement. In June 2017, Jcet Group Co.Ltd(600584) completed the asset acquisition, and the largest shareholder of the company was changed from Xinchao group to core semiconductor. Until September 2019, the first two shareholders were changed to national integrated circuit industry fund and core semiconductor, Semiconductor Manufacturing International Corporation(688981) and senior executives with large fund background also took office in the same year.
On the issue of employee turnover, Jcet Group Co.Ltd(600584) said that as a leading international semiconductor company in the world, Jcet Group Co.Ltd(600584) pays attention to the construction and guarantee of the overall organizational capacity of the group, continues to do a good job in the inheritance and coordination of team knowledge and skills, and establishes information management risk control measures to prevent the loss of the company’s specialized technology and key personnel; At the same time Jcet Group Co.Ltd(600584) will further strengthen the career development path of employees, establish a perfect incentive mechanism and the construction of talent echelon, so as to promote the future development of the company. After the new management of the company took office in 2019, it continuously improved the company’s human resource management platform, optimized and improved the company’s salary system, optimized the welfare of employees at all levels, and created a good corporate culture and atmosphere by planning employee development and training.
rapid mass production and profit
The semiconductor field has the characteristics of large investment scale, strong equipment specificity and high technical threshold.
Jcet Group Co.Ltd(600584) questioned that YongSi Electronics was established only in November 2017, and its business income reached 38.5443 million yuan in 2018 alone, which is obviously not in line with the growth law of general semiconductor enterprises. “Yongsi electronics is a company that has only been established for four years. Obviously, it should be in the start-up or growth period of centralized R & D investment and accumulation of customer base. However, Yongsi electronics has achieved ultra-high profits. Therefore, it is very likely to rely on the technology or customer resources known by the Jcet Group Co.Ltd(600584) former employees.”
In response, Yongsi electronics responded in its self-examination report that the rapid growth of performance was due to the company’s choice to import digital currency products (btc-lga) with a short cycle, resulting in more than 60% of the revenue in 2018; Since then, benefiting from the rapid growth of market demand and the transfer of industry to China after the outbreak of the epidemic, the entrepreneurial team dominated by Wang Shunbo has the ability and experience to quickly realize mass production, starting from the introduction of relatively simple QFN products to more high-end system level packaging products (SIP) customers.
Jcet Group Co.Ltd(600584) did not agree with the above response. The company told the reporter of securities times · e company that the completion time of many R & D and mass production projects of Yongsi electronics, such as ultra-thin QFN, 28nm process copper wire bonding technology, large FCBGA flip chip and other packaging processes, is basically the same as or slightly behind Jcet Group Co.Ltd(600584) the completion and verification mass production time of the above processes, In terms of time, it coincides with the time when a large number of technical and management personnel represented by the above personnel successively left Changdian to join Yongsi, “For example, according to the different packaging materials and structures and the changing and progressive characteristics of packaging equipment, if there is no improper acquisition and use of the technology of the original unit, it is impossible to complete the mass production of 12-14 nanotechnology packaging in just a few months with the technical information on specific experimental products disclosed in several articles 10 years ago.”
Jcet Group Co.Ltd(600584) also pointed out that it takes about two years for a sealed test plant to be built, put into operation, trial production by customers, certification and mass production, with an investment of about 20 billion yuan, which is not the 6-11 months mentioned by Yongsi, “According to the data disclosed by Yongsi, Yongsi electronics can rapidly produce and make profits in a short time at the speed of about 5-6 projects developed by each person at the same time in a very short time, which is enough to show that Yongsi has the risk of using Jcet Group Co.Ltd(600584) secrets in a large amount.”
In the self inspection report, Yongsi electronics explained that the initial plant of the company was purchased, “which greatly shortened the construction cycle and laid the foundation for mass production in the initial stage of establishment.” In order to realize mass production as soon as possible, the company has reached a strategic cooperation with Yandong microelectronics. Yandong microelectronics provides equipment and customer import, and Yongsi electronics provides plants and is responsible for production. Through this cooperation, a complete production line with mass production capacity can be quickly formed.
Yongsi electronics further said that in the initial stage of the company, although the core personnel of its technical R & D team were mainly from Jcet Group Co.Ltd(600584) , most of them had working experience in technical posts in internationally renowned packaging and testing factories such as rimoonlight and Xingke Jinpeng before working in Jcet Group Co.Ltd(600584) , and accumulated rich public knowledge and practical experience in the field of advanced packaging during this period, “Therefore, in the initial stage, the issuer’s mass production products are designed and developed based on public knowledge and open technology in the field of advanced packaging, and the technical difficulty of the products is relatively simple, which can realize mass production in a relatively short time.”
Yongsi electronics related technicians told reporters that after the outbreak of the epidemic, home office has greatly increased the demand for mobile phones and computers. “Last year, it was recognized that there was a lack of core, so the sealing and testing capacity was also very full. Jcet Group Co.Ltd(600584) the performance growth in the past three years was very good, not only our company’s growth rate in recent years, but also the growth rate of the whole industry.”
how high is the coincidence of customer resources?
Jcet Group Co.Ltd(600584) said in the report material that Yongsi electronics is likely to rely on customer resources known to Jcet Group Co.Ltd(600584) former employees.
In the self inspection report disclosed by Yongsi electronics, the situation of overlapping customers of both sides was also disclosed in detail. Since 2018, Yongsi electronics has 31 customers with a current sales amount of more than 5 million yuan in each period of the reporting period, including 24 overlapping customers with Jcet Group Co.Ltd(600584) . Among the 24 overlapping customers, 10 are customers without overlapping models and 14 are customers with partially or completely overlapping models.
among the 14 customers with overlapping models, the revenue of Yongsi electronics from providing packaging and testing services for the same model products was 10.7776 million yuan, 123 million yuan, 303 million yuan and 274 million yuan respectively, accounting for 28.01%, 33.66%, 41.00% and 32.98% of the revenue of each period in the reporting period. Yongsi electronics stressed that some products of the same model and the same products mentioned above were first imported by the company. After excluding the relevant impact, Yongsi electronics and Jcet Group Co.Ltd(600584) have 11 overlapping customers.
Yongsi electronics said that as of June 2021, the issuer had completed the certification of 26 brand end customers, including oppo, vivo, Xiaomi, Lenovo, TCL, Samsung and other first-line consumer electronics manufacturers outside China. The recognition of the above end customers also proves that the issuer has independent and strong customer introduction ability.
For the specific situation of overlapping customers of both parties, Jcet Group Co.Ltd(600584) said it could not be verified, “because it is unclear about the sales situation and specific products of Yongsi electronic sub customers during the reporting period.” The person said, Jcet Group Co.Ltd(600584) as the largest company with the strongest technical capability and the largest number of patents in China, has always won customers with stable product quality and high-quality service. At present, it is not possible to assess the specific loss of Jcet Group Co.Ltd(600584) caused by this matter.
In addition, a leading chip manufacturer independently confirmed to the reporter of E company that it has a customer relationship with Yongsi electronics, but it accounts for a relatively small proportion at present. The manufacturer told reporters that from the perspective of supply chain security, it is normal for manufacturers in the sealing and testing link to have multiple suppliers.
court or settlement?
judging from the latest progress of the case, Jcet Group Co.Ltd(600584) the legal proceedings taken against Yongsi electronics have been accepted by relevant courts and arbitration institutions or in legal pre litigation proceedings. Among them, Wuxi intermediate people’s court has issued a hearing notice for the case of unfair competition of Yongsi electronics. “It is expected that the trial will be held successively in March and April. At that time, Jcet Group Co.Ltd(600584) will make the next action arrangement according to the trial.” Jcet Group Co.Ltd(600584) said.
For the accusation of Jcet Group Co.Ltd(600584) , Jin Liangkai, board secretary of Yongsi electronics, told the reporter of securities times · e company that after the Jcet Group Co.Ltd(600584) report letter was sent, the exchange asked the company to conduct a comprehensive verification, “we have also done it for two or three months.” Jin Liangkai also revealed that at the request of the other party, the company is actively seeking to reach a settlement with Jcet Group Co.Ltd(600584) . “The settlement letter has been sent to the other party. We want to settle on our own initiative, and they are willing to settle, but there is no timetable at present.”
” Jcet Group Co.Ltd(600584) said a lot of things are untrue, and many things are more complex,” Jin Liangkai said. The company has written hundreds of pages of replies to the relevant allegations of Jcet Group Co.Ltd(600584) for comprehensive disclosure.
According to the disclosure of the prospectus, in November 2021, Jcet Group Co.Ltd(600584) sued six employees including Yongsi electronics and Xu Linhua to Wuxi intermediate people’s court for infringement of trade secrets, and claimed compensation of 6.6325 million yuan. The case has been officially filed and has not yet been heard. In addition, in November 2021, Jcet Group Co.Ltd(600584) filed a lawsuit against Xu Yupeng on the grounds of his conflict of interest policy and integrity and loyalty obligations during his tenure. He filed a lawsuit against the Pudong court. The amount of the action was 132 thousand and 900 yuan, and the 6 party’s claim for damages was 6 yuan, amounting to 92 thousand and 300 yuan. The above labor arbitration and litigation are in the pre litigation mediation process.
in this regard, Yongsi electronics said that even if the relevant personnel lose the lawsuit, they only need to bear civil liability, and the amount is relatively small, which will not affect the qualification of the relevant personnel.
In addition, Jcet Group Co.Ltd(600584) filed a patent invalidation request with the State Intellectual Property Office, requesting invalidation of five invention patents including the company’s patent number zl202010727451.0. Yongsi electronics said that the above five patents are stable, but it does not rule out the risk that the patents will be completely or partially invalid, which will have an adverse impact on the patent protection required for the company’s future products. Even if the patent is declared invalid, the company can continue to use the technical scheme involved in the relevant patent, which will not have a significant adverse impact on the company’s production and operation.
Jcet Group Co.Ltd(600584) told reporters, “in addition to the invalidity of relevant patents or problems in ownership, Yongsi electronics also infringes Jcet Group Co.Ltd(600584) intellectual property rights, Jcet Group Co.Ltd(600584) will take further legal actions to safeguard its own legitimate rights.”
Reporters will also continue to pay attention to the disputes between the two sides.
