Lixin Certified Public Accountants (special general partnership)
About Changzhou Galaxy Century Microelectronics Co.Ltd(688689)
Application documents for issuing convertible bonds to unspecified objects
Reply to the inquiry letter of the second round of audit
Xhshz [2022] No. zf074 Shanghai Stock Exchange:
We have received from China Securities Co.Ltd(601066) the second round of examination and inquiry letter on Changzhou Galaxy Century Microelectronics Co.Ltd(688689) issuing convertible bonds to unspecified objects (hereinafter referred to as “examination and inquiry letter”) transferred by your exchange, szkss (refinancing) [2022] No. 37. In this regard, we have made a careful study, and according to the requirements of the audit inquiry letter, we have supplemented and implemented a number of inspection procedures for Changzhou Galaxy Century Microelectronics Co.Ltd(688689) (hereinafter referred to as “the issuer” or ” Changzhou Galaxy Century Microelectronics Co.Ltd(688689) “), and explained the relevant matters as follows. We have not accepted the entrusted audit or reviewed the financial statements from January to September 2021. The verification procedures and the results of the verification procedures described below are only for the purpose of assisting the issuer in answering your inquiry, Does not constitute audit or review.
Unless otherwise specified, the abbreviation in the reply to this audit inquiry letter has the same meaning as the abbreviation in the prospectus for Changzhou Galaxy Century Microelectronics Co.Ltd(688689) issuing convertible corporate bonds to unspecified objects (draft application). Unless otherwise specified, the following units are 10000 yuan. In this description, if there is a tail difference between the sum of the amount of detailed items and the total, it is caused by rounding.
About the question of the audit inquiry letter “1. About the industrialization project of vehicle specification semiconductor devices”
According to the first round of replies, (1) foreign manufacturers occupy a leading position in the field of vehicle specification semiconductor. In 2020, the top ten vehicle specification semiconductor manufacturers in the world are all foreign manufacturers, and the localization rate of vehicle specification semiconductor devices is low. As of February 22, 2022, the amount of orders in hand from the company’s automobile customers was 323192 million yuan; (2) The estimated unit price of the small signal devices mainly produced in the project is basically consistent with the historical sales, and the estimated unit price of power devices is higher than the historical sales data; (3) In the future, the market competition pattern of China’s vehicle specification semiconductor devices will transition from monopoly competition to full competition.
The issuer is requested to explain: (1) in combination with the relevant industry standards of vehicle specification level semiconductor devices, explain the special requirements of vehicle specification level semiconductor products in terms of product performance compared with products in other fields, the specific implementation methods of relevant requirements in terms of raw materials and production processes in all links, as well as the corresponding relationship with the issuer’s existing, under research and related technologies of the raised investment project, and whether the issuer has the technical basis for implementing the raised investment project; (2) The differences between the product types and application scenarios involved in this raised investment project and foreign vehicle specification semiconductor manufacturers, the advantages and disadvantages of relevant technologies compared with foreign manufacturers, whether there are obstacles in order development, and give corresponding risk tips; (3) Whether the specific calculation process of unit price and capacity of vehicle gauge small signal devices and power devices produced by the raised investment project fully considers the impact of factors such as intensified market competition, increased supply and technological renewal on price and capacity in the future, and whether the relevant prediction results are cautious and reasonable.
The reporting accountant is requested to verify the above matters and express clear opinions.
[issuer’s response]
1、 In combination with relevant industry standards of vehicle specification level semiconductor devices, explain the special requirements of vehicle specification level semiconductor products in terms of product performance compared with products in other fields, the specific implementation methods of relevant requirements in terms of raw materials and production processes of all links, as well as the corresponding relationship with the issuer’s existing, under research and related technologies of the raised investment project, and whether the issuer has the technical basis for implementing the raised investment project
(I) in combination with relevant industry standards of vehicle specification level semiconductor devices, explain the special requirements of vehicle specification level semiconductor products in terms of product performance compared with products in other fields
According to different application scenarios and technical parameter requirements, semiconductor discrete devices can be divided into four levels: consumer level, industrial level, vehicle specification level and military level. The requirements for product performance at each level are as follows:
Consumer grade, industrial grade, vehicle specification grade, military grade
Application mobile phone, PC and other industrial control automotive electronic military applications
Temperature: 0-70 ℃ – 40 ℃ – 85 ℃ – 40 ℃ – 150 ℃ – 55 ℃ – 150 ℃
Low humidity 0-100% 0-100% depending on the environment
Vibration / shock low high high high
Service life: 1-3 years, 5-10 years, 15 years ＞ 15 years
Failure rate ＜ 3% ＜ 1% 0
Test standard: jesd47, etc., aec-q100, mil-std-883, etc
Consumer grade, industrial grade, vehicle specification grade, military grade
The system has low cost and high cost
Enhanced packaging, high and low temperature and enhanced packaging, high and low temperature and special requirements waterproof, anti-corrosion, moisture-proof, etc
Heat dissipation, etc
Low reliability and high reliability
Compared with the special requirements of automotive semiconductor devices, the performance of automotive semiconductor devices first comes from the special requirements of automotive semiconductor devices.
First, cars are high-grade durable goods, with a long design life cycle, generally 15 years or 200000 kilometers. Compared with consumer goods and general industrial products, devices are required to work stably for a longer time. Second, automobile is a means of transportation involving personal safety, which needs to adapt to various working environments, especially in extremely harsh or abnormal environments such as high temperature, severe cold, severe storm and rain. Therefore, the requirements for the temperature and humidity range, anti vibration, impact or electromagnetic interference of the device are higher than those of consumer and industrial products. Third, due to the continuous improvement of the degree of integration, intelligence and electronization of modern vehicles, the requirements for the failure rate of each component of the system are increased accordingly. For example, there are hidden dangers in the core devices, which may even lead to large-scale recall measures. At present, the market requires vehicle specification semiconductor devices to achieve zero failure efficiency, and foreign leading enterprises have been able to achieve a failure rate of 5% per million, which is much higher than that of consumer and industrial products.
Secondly, vehicle specification semiconductor devices have different requirements for product reliability. Consumer grade and industrial grade semiconductor products also have sub item reliability test requirements, but they are generally non mandatory; The reliability test requirements of vehicle specification products are mandatory, and the test standards are more extreme. Take aec-q101 series of standards for vehicle specification grade semiconductor discrete device products formulated by the automotive electronics Committee as an example. Compared with consumer grade and industrial grade discrete device products, this standard has the following characteristics:
1. There are more items. Aecq-101 certification has more than 25 test items for products, while other standards have no mandatory test requirements.
2. The test cycle is long and the judgment standard is strict. Aecq certification selects the longest test time and the strictest judgment standard, while other standards emphasize more on test methods. Test judgment provides the choice of different strictness, and it is not required to cover all items.
3. There are many test batches. Aecq requires at least three batches of samples to pass before they are considered to pass, while the requirements for test batches of other standards are relatively loose.
4. In addition to the product performance and reliability test items, the AEC standard also requires the structural analysis of the samples before and after the test. Even if the parameters change within the standard range, they cannot pass in case of delamination, defect and other abnormalities.
5. AEC standard also puts forward specific requirements for test technology, copper wire process, packaging process control and other details, which are not available in consumer and industrial product standards.
Finally, the higher requirements of vehicle specification semiconductor device products in terms of life, fault tolerance and reliability, and the more stringent test standards for devices are reflected in the longer certification cycle and higher certification threshold at the supply chain level. In order to ensure long-term and stable production, the terminal vehicle factory needs to ensure the normal supply of spare parts within the life cycle of a certain model. Therefore, it puts more emphasis on the test and system matching of the whole vehicle components and the whole vehicle, thus forming the characteristics that the automobile industry emphasizes the common growth with the supply chain. Once entering the supply chain, suppliers will be assisted and trained by the vehicle factory, and generally will not be easily replaced or eliminated. Such a stable cooperative relationship is conducive to ensuring the stability of the quality of vehicle specification products.
To sum up, compared with products in other fields, vehicle specification semiconductor has higher special requirements in product performance, reliability requirements, test standards, supply chain certification and other aspects.
(II) the specific implementation methods of relevant requirements in terms of raw materials, production processes of all links and the corresponding relationship with the issuer’s existing, under research and related technologies of the raised investment project, and whether the issuer has the technical basis for implementing the raised investment project
1. Specific implementation methods of relevant requirements of vehicle specification semiconductor devices in terms of raw materials and production processes of all links
Vehicle specification level semiconductor discrete devices are different from consumer / industrial products in all links from raw materials, design, production to testing. More design elements, design margin and packaging performance will be considered. The specific implementation methods are as follows:
The specific method of the project is to realize the requirements of vehicle specification level devices
In the process of cutting silicon wafer with diamond blade, there will be a mechanical damage layer with a certain increase in the size, width and thickness of the cutting channel at the interface between the blade and the cutting groove. Increasing the width of the cutting channel can reduce the parameter changes caused by the extension of the damage layer to the functional area of the wafer, so as to reduce the risk of performance reliability degradation
It can make the electric field distribution inside the chip more uniform, improve the peak current capability, reverse withstand voltage capability, and increase the figure chamfer radian
Thus, it has stronger transient impact resistance, improves reliability and reduces failure rate
Raw materials: increase the thickness of passivation layer and control the thickness uniformity of the chip, strengthen the isolation between the external environment and the internal electric field of the chip, and adopt the design of composite passivation layer
Effect, improve consistency and environmental tolerance, and reach a higher operating temperature range
Optimize the reverse parameter design, improve the transient overvoltage capability of the product, and improve the working reliability under extreme environments
The uniform distribution technology of impurity source is adopted to expand
The requirements of smoother PN junction and more ideal impurity distribution, so as to improve the consistency of parameters and reduce the precision control technology of temperature in the constant temperature zone of electric dispersion furnace
The risk of local breakdown in the field can improve the reliability of the device
etc.
It has better performance in terms of fluidity, binding force, stress, sealing and heat dissipation capacity, so as to ensure that the raw materials: the plastic sealing materials are preferably higher-grade plastic sealing materials, and the finished products have better ability in terms of sealing, heat dissipation capacity and mechanical stress resistance, and provide an important guarantee for the reliability of the finished products
The packaging design introduces local packaging environment control technology, and adopts closed track design, inert gas protection and other methods to better control the oxidation risk of materials
Project specific practices
