SiRuiPu/Nanxin/DiO Micro are not in harmony, the spring of analog power supply w

Reported analog power devices are one of the major categories of semiconductor chips, mainly including analog-to-digital converter cores (ADC), amplifier chips, power management chips, PLL, etc. Analog power chips are hailed as the "energy conversion magicians" in the electronic world, highlighting their crucial role in circuit systems.

Referring to multiple data reports on analog power devices, the global market for analog power devices still has a promising development space in the coming years. For instance, according to a research report by QYResearch, it is projected that the global analog chip market will reach $73.81 billion by 2030, with a compound annual growth rate (CAGR) of 3.95% over the next seven years. However, looking at the financial reports from manufacturers, the analog power industry remains a long and arduous journey, and of course, the situations of manufacturers vary.

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TI has already issued a warning ahead of time.

Before domestic analog power manufacturers released their financial reports, TI, as an industry benchmark, has already published its financial statements. According to TI's second-quarter financial report, the company achieved a revenue of $3.822 billion, an operating profit of $1.248 billion, a net income of $1.127 billion, and earnings per share of $1.22. All four figures have experienced varying degrees of year-on-year decline, with a 16% drop in revenue and a 37% decrease in operating profit.

Specifically, the analog business revenue was $2.928 billion, a year-on-year decrease of 11%; the embedded business revenue was $0.615 billion, a year-on-year decrease of 31%. Texas Instruments President and CEO Haviv Ilan stated: "The industrial and automotive sectors continued to decline quarter-on-quarter, while all other end markets experienced growth."

Additionally, there is some positive news from TI, such as what Haviv Ilan mentioned, "Reliable, low-cost 300mm capacity will become increasingly critical and valuable, and our investments enable us to support customer needs on a large scale. Furthermore, TI anticipates that the third-quarter performance for 2024 will be between $3.94 billion and $4.26 billion, continuing to show quarter-on-quarter growth."

Silicon Power is actively seeking change.

Similar to the situation of industry giant TI, Silicon Power has also experienced a decline in both revenue and net profit.

Silicon Power mainly focuses on three major product lines: signal chains, power management, and embedded MCUs. In the field of analog power, Silicon Power has a very deep product and technology accumulation, offering more than twenty sub-product lines including amplifiers/comparators, DC/DC, CN/LIN, LDO, DCDC, drivers, switches, power monitoring, and isolation products, covering various application fields such as new energy and automotive, communications, industry, and medical health.

According to Silicon Power's mid-year report for 2024, in the first half of 2024, the company achieved a total operating revenue of 507 million yuan, a year-on-year decrease of 17.21%; the net profit attributable to the parent company was a loss of 65.6385 million yuan, compared to a profit of 14.0877 million yuan in the same period of the previous year, turning from profit to loss year-on-year. Therefore, in the first half of 2024, Silicon Power's gross margin was 48.03%, a year-on-year decrease of 6.71 percentage points; the net profit margin was -12.95%, a decrease of 15.25 percentage points compared to the same period of the previous year.Although the revenue and profit situation appears not very promising, some relatively positive signals can be seen from the financial reports and actions of Silergy. Looking at the quarterly indicators, the gross margin for the second quarter of 2024 increased by 0.65 percentage points compared to the first quarter; the net profit margin for the second quarter rose by 19.21 percentage points from the previous quarter. At the same time, Silergy plans to issue convertible bonds and pay cash to acquire Chuangxin Micro in the first half of 2024, and the project is currently progressing normally. Chuangxin Micro is an integrated circuit design company specializing in the research and development and sales of high-precision, low-power battery management and high-efficiency, high-density power management chips. After the acquisition is completed, Silergy and Chuangxin Micro will complement each other in existing product categories, customer resources, and sales channels, further enriching the product lineup and reaching fields to meet the diversified needs of customers.

Nanxin Technology's performance is across-the-board positive

Let's take a look at Nanxin Technology, which continues to forge ahead in the long-snow environment of the analog power industry, with a comprehensive positive performance in the mid-term report for 2024. According to the financial report, the operating income of Nanxin Technology in the first half of 2024 was 1.25 billion yuan, a year-on-year increase of 89.28%; the net profit was 205 million yuan, a year-on-year increase of 103.86%. The reason for the surge in performance, as given by Nanxin Technology, is mainly due to the increased demand from downstream terminal markets, leading to increased sales revenue. Currently, Nanxin Technology has a full order book, steady growth in its main business, and significant revenue growth in the automotive electronics field, which is expected to become the company's second growth curve.

Nanxin Technology is one of the leading domestic analog and embedded chip design companies, focusing on the power and battery management field, with multiple product lines including Charge pump, DC/DC, AC/DC, wired charging, wireless charging, fast charging protocols, lithium battery protection, etc. The products are mainly used in consumer electronics fields such as mobile phones, notebooks/tablet computers, power adapters, mobile power supplies, smart wearable devices, as well as in the broader industrial field and automotive electronics field such as energy storage power supplies and electric tools.

In the current context of recovering demand for terminal consumer electronics, Nanxin Technology has accurately seized opportunities, which is also the main reason for the company's significant performance increase. Nanxin Technology provides end-to-end complete solutions, widely deploying chip products including AC-DC, charging protocols, wired/wireless charging management, DC-DC, BMS, Display Power, etc., and can provide charging solutions that cover and support charging power from 10W to 300W, thus performing well in the terminal device market. For example, with the integrated multi-functional wired charging management chip launched by Nanxin Technology, consumer electronics such as smartphones can achieve cost optimization and improve charging and system operation efficiency; Nanxin Technology's wireless charging management chips, lithium battery management chips, display driver chips, and DC-DC chips have also been widely adopted by leading industry customers; in addition, the full-integrated flyback solution POWERQUAR provided by Nanxin Technology can help power adapters further improve power density and efficiency.

From January to May of this year, the domestic smartphone shipment volume increased by 11% year-on-year, which has a significant driving effect on Nanxin Technology's products. At the same time, automobiles are expected to become Nanxin Technology's second growth curve. The company's current automotive products include wired/wireless charging management chips, electronic fuses (eFuse) chips, high-side switches, automotive drive chips, automotive LDO chips, etc., and are widely used in key technical fields such as automotive body network control, intelligent cockpit systems, automotive domain controllers, and advanced driver-assistance systems (ADAS).

Di Ao Micro's revenue increases but profits do not

Among the three analog power companies that have disclosed their financial reports, the joys and sorrows of the three companies are not shared. According to the financial report, Di Ao Micro achieved a business income of 266 million yuan in the first half of 2024, a year-on-year increase of 47.28%; the net profit attributable to the shareholders of the listed company was 26.7658 million yuan, a year-on-year decrease of 7.61%.

Di Ao Micro is an integrated circuit design company specializing in the research and development, design, and sales of high-performance analog chips, with main products including signal chains and power management. In terms of signal chains, Di Ao Micro's products include high-performance operational amplifiers, high-performance analog switches, MIPI switches, voltage/level converters, sensing and collection devices, etc., and it is one of the few domestic suppliers that can provide both low-power, ultra-wide input voltage range low-side sampling high-precision operational amplifiers, and high-side current sampling high-voltage high-precision operational amplifier products.

In terms of power management, Di Ao Micro's products include high and low voltage DC converters, motor drivers, a full range of linear charging, switch charging, high-side switches, AC/DC controllers, over-voltage protection load switches, and battery protection chips, etc., and it is one of the suppliers of DC/DC conversion chips and LED driver chips in the domestic security monitoring field, with products covering the buck series from 5V to 40V input, and the maximum output current can reach 8A.One reason for the increase in Diowei's revenue but not in profits is the development and introduction of new products. In the first half of 2024, Diowei added 48 new intellectual property projects, including 27 invention patents. As of June 30, 2024, the company had accumulated 203 authorized intellectual property projects, with 72 invention patent authorizations. In the first half of the year, Diowei continued to expand its product matrix, seize market opportunities, increase product sales efforts, and enhance customer share, with some new products already being shipped to leading domestic and international customers. However, the proportion of R&D to revenue increased by 1.57 percentage points compared to the same period last year, affecting the company's net profit performance.

Will the full recovery of analog power supplies take place by 2026?

Looking at the data mentioned in Nanxin Technology's financial report, according to the WSTS 2024 Spring forecast, the global analog chip market size in 2023 is about 81.2 billion US dollars, a year-on-year decrease of 8.7%; the global analog chip market size in 2024 is expected to be about 79.1 billion US dollars, a year-on-year decrease of 2.7%, with the expected decline significantly narrowing; it is anticipated that the global analog chip market will return to a growth trend in 2025. The industry is in a period of bottoming out and rebounding.

However, according to industry leader TI's forecast, it is expected that the demand for analog chips will rebound by 2026, driving an increase in free cash flow (FCF). Texas Instruments CEO Haviv Ilan stated that the latest FCF forecast reflects the benefits generated by the group's 300mm chip production line after the initial expansion is completed in 2026. According to data provided by the company on Tuesday, after expanding the production line, the group's revenue in 2026 will range from 20 billion to 26 billion US dollars. After completing the expansion of production capacity, the annual capital expenditure will range from 2 billion to 5 billion US dollars, but the company's capital expenditure will remain at 5 billion US dollars for the current and next two years.

According to statistics from IC Insights, TI held a 19% share of the global analog device market in 2023, ranking first. Therefore, TI's forecast basically represents the future trend of the global analog device market, which is why many industry players and analysts describe the current analog device environment as a long slope with deep snow. However, as we mentioned in the financial report interpretation above, the downturn in the industry is also the best time for manufacturers to break through themselves, with methods including mergers and acquisitions, developing new product lines, and increasing R&D investment. Coincidentally, the three companies mentioned have practiced on each of these paths.

Conclusion

Analog power supplies are fundamental components in circuits and an indispensable part of functional circuits, hence they are referred to as the industry's barometer and are more susceptible to the prosperity of the terminal industry. Currently, domestic analog power supply device manufacturers are still in a rapid growth phase, with a significant gap in product richness compared to manufacturers like TI and ADI. This also leads to different experiences among manufacturers during the same industry cycle. However, with integration, mergers and acquisitions, and the elimination of the lower performers, the experiences of domestic analog power supply manufacturers will gradually converge towards TI.