A number of MCU factories reported strong revenue in the first quarter. These A-share peers will also benefit from the shortage trend.

A few days ago, Taiwan MCU (microcontroller) manufacturers Songhan, Yingkang and Yingguang all reported March revenue. Thanks to the strong demand for MCU, coupled with the effect of price increases, the revenue of the three companies in the first quarter increased by 66.25%, 81.93% and 64.25% respectively, with an average annual growth rate of at least 60%. In particular, Jiaokang benefited from the support of foundry capacity, with revenue from mass entrepreneurship and innovation at an all-time high in March and the first quarter.

Looking forward to the second quarter, as the current orders of various MCU enterprises are still much larger than the production capacity obtained, unshipped orders in the last quarter have also been extended to the second quarter, coupled with the traditional peak season this quarter, the overall rising effect of products, industry people expect that in addition to revenue is expected to be better than the first quarter, profit growth strength will also be better than in previous years.

A-share related companies also issued beautiful performance forecasts. Fuman Electronics announced last night that it expects its net profit to increase by 7.3 to 8.8 times in the first quarter, thanks to the mass production of new products and the iterative upgrading of the efficiency of the original best-selling products, resulting in a substantial increase in operating income and product gross profit margin over the same period last year. Data show that the main products of Fuman Electronics include power management, LED control and driver, MOSFET, MCU, non-volatile memory, RFID, RF front-end and all kinds of ASIC chips.

In addition, Zhongying Electronics recently announced that its first-quarter results are expected to increase by 53%. 62.5%. Guoxin Securities pointed out that the company is a leader in the MCU of domestic household appliances, focusing on developing the white goods market in 2020. In the context of trade frictions, domestic substitution accelerated. In 2020, the company's AMOLED display driver chip sales increased by more than 2 times, and lithium battery management chip sales increased by more than 50%, becoming the main driver of the company's growth.

MCU is a kind of microprocessor chip designed for specific application control processing, which is widely used in automobile, industrial control, computer, consumer electronics and other fields. According to the width of bus or data register, MCU can be divided into 4-bit, 8-bit, 16-bit, 32-bit and 64-bit microprocessors. Different bits of MCU are suitable for different fields. The higher the number of bits is, the stronger the data processing capability is, and the more complex the application scenario is. At present, the 32-bit MCU market is growing rapidly, which has become the mainstream product specification of MCU, and is gradually replacing the application field dominated by 8-bit MCU.

Thanks to the continuous increase in demand for applications such as automotive electronics, the Internet of things and consumer electronics, the MCU market is growing steadily. According to ICInsight, the global MCU market is expected to reach US $22.3 billion in 2021, an increase of 7.21% over the same period last year. In addition, according to the data of the electronic engineering album, in the global MCU market in 2020, the market share of 32-bit MCU is 62%, 16-bit, 23%, 4-bit, 8-bit, 15%. It is estimated that the market share of 32-bit MCU is expected to reach 71% by 2024.

From the industry point of view, the recent strong market demand for MCU, superimposed wafer manufacturing capacity in short supply, MCU products out of stock, price market conditions occur frequently. According to the report of international electronic business, Yilong, a MCU manufacturer in Taiwan, has formally raised the price of its products since January 1, 2021, and according to the company's product plan, the order of MCU products will be suspended completely after the year; Songhan, a MCU manufacturer, has raised its quotations to customers since the fourth quarter of 2020, and is currently carrying out the second wave of price adjustment for some customers. MCU manufacturer Shengqun decided to increase the price of all IC (including MCU) shipments by 15% from April 1st, and some products have been fully booked in 2021.

In 2019, the global MCU market is mainly occupied by microchip, Italian semiconductors, Renesas, Texas Instruments, NXP and other manufacturers, with the combined market share of the top five manufacturers reaching 72.8%. China's MCU market is mainly occupied by Italian semiconductors, NXP, Microcore, Renesas, Infineon and other manufacturers, with the combined market share of the top five manufacturers reaching 74.42%.

Soochow Securities said that in the current MCU market shortage market continues, the local MCU industry chain is expected to accelerate the market expansion of products, enhance the value of products or shipments, so as to fully benefit from the upsurge of application demand in the MCU market, it is recommended to pay attention to: Zhongying Electronics, Zhaoyi Innovation, Huarun Micro, Xinhai Science and Technology, Shilan Micro, Lexin Technology, Dongsoft Carrier, Shanghai Beiling and so on.