No one in the capital circle does not invest in semiconductors. How can industrial capital play a positive role for China's semiconductors?
- Categories:Industry information
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- Time of issue:2021-10-27
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(Summary description)As a technology driven hard technology industry, semiconductor industry has been inseparable from capital from the beginning. It was with Arthur rock's venture capital that Fairchild Semiconductor, the world's first semiconductor franchise company, was established, and Santa Clara Valley finally became Silicon Valley. With the continuous maturity of the industry, M & A, splitting and reorganization appear more and more in the semiconductor industry, so the importance of capital to the development of the semiconductor industry is becoming more and more prominent.
In China, in the past ten years, the semiconductor industry was in the ice age in the first five years, and few people paid attention to it. However, during this period, starting from the outline for promoting the development of the national integrated circuit industry published by the State Council in 2014 and marked by the establishment of the national integrated circuit industry fund, some olfactory industrial capital began to focus on hard science and technology; With the Sino US scientific and technological war as the tipping point, more and more funds have found the historic opportunity of China's semiconductor industry and began to flock in. Today, no one in the capital circle has not invested in semiconductors.
For China's semiconductor industry, the influx of capital is not a bad thing. For such an industry with very high requirements for capital, talents and fixed investment (Manufacturing), a main factor limiting China's industrial development before 2014 is insufficient investment. But the bubble brought by the capital Carnival approach also has many negative effects.
So, what kind of industrial capital does China Semiconductor need? How should industrial capital play a positive role and avoid negative effects in the historical critical period of the development of China's semiconductor industry?
He Hui, chief analyst of omdia semiconductor, a market research institution, said that industrial capital should have the ability to build a platform and integrate resources. At present, there are more than thousands of integrated circuit enterprises in China. How to help semiconductor enterprises integrate and build large and strong leading enterprises is the number one task of current industrial capital.
In terms of integrating semiconductor industry resources, CCG assets and Zhilu capital under Rongxin industry alliance have very successful cases.
In 2017, CCG assets wholly acquired Nexperia, which was spun off from NXP, which became the semiconductor case with the largest amount of international mergers and acquisitions (US $2.75 billion) by China's industrial capital in recent years and the most successful case. Before the split, as the standard product department of NXP, the growth rate was only hovering in single digits due to mature products and low company investment. After the acquisition of Jianguang assets, the three-year revenue increased by 50% to US $1.6 billion. After that, CCG assets sold ANSYS semiconductor to Wentai technology, which has been transformed into China's largest IDM (vertically integrated device) semiconductor company with a market value of more than 100 billion.
In fact, as early as 2015, CCG assets spun off the power semiconductor department from NXP and established Ruineng semiconductor in a joint venture with NXP. Now its revenue has doubled compared with that when it established the joint venture, and will be ready to be listed in the domestic securities market in the near future, which not only greatly improved the business situation, brought success to employees and customers, but also gave very good returns to investors.
It is noteworthy that although the difficulty of international M & A of Chinese capital has increased significantly in the past two or three years, Zhilu capital has sprung up and created a number of successful acquisition cases. In July 2020, Zhilu capital wholly acquired UTAC, the world's third largest automotive electronic packaging and testing enterprise. After more than a year of transformation, UTAC has greatly improved its revenue and net profit. Zhilu capital hopes to build UTAC into a semiconductor packaging and testing enterprise with the top five global revenue and the first profit in China by loading high-quality assets and connecting domestic resources.
No one in the capital circle does not invest in semiconductors. How can industrial capital play a positive role for China's semiconductors?
(Summary description)As a technology driven hard technology industry, semiconductor industry has been inseparable from capital from the beginning. It was with Arthur rock's venture capital that Fairchild Semiconductor, the world's first semiconductor franchise company, was established, and Santa Clara Valley finally became Silicon Valley. With the continuous maturity of the industry, M & A, splitting and reorganization appear more and more in the semiconductor industry, so the importance of capital to the development of the semiconductor industry is becoming more and more prominent.
In China, in the past ten years, the semiconductor industry was in the ice age in the first five years, and few people paid attention to it. However, during this period, starting from the outline for promoting the development of the national integrated circuit industry published by the State Council in 2014 and marked by the establishment of the national integrated circuit industry fund, some olfactory industrial capital began to focus on hard science and technology; With the Sino US scientific and technological war as the tipping point, more and more funds have found the historic opportunity of China's semiconductor industry and began to flock in. Today, no one in the capital circle has not invested in semiconductors.
For China's semiconductor industry, the influx of capital is not a bad thing. For such an industry with very high requirements for capital, talents and fixed investment (Manufacturing), a main factor limiting China's industrial development before 2014 is insufficient investment. But the bubble brought by the capital Carnival approach also has many negative effects.
So, what kind of industrial capital does China Semiconductor need? How should industrial capital play a positive role and avoid negative effects in the historical critical period of the development of China's semiconductor industry?
He Hui, chief analyst of omdia semiconductor, a market research institution, said that industrial capital should have the ability to build a platform and integrate resources. At present, there are more than thousands of integrated circuit enterprises in China. How to help semiconductor enterprises integrate and build large and strong leading enterprises is the number one task of current industrial capital.
In terms of integrating semiconductor industry resources, CCG assets and Zhilu capital under Rongxin industry alliance have very successful cases.
In 2017, CCG assets wholly acquired Nexperia, which was spun off from NXP, which became the semiconductor case with the largest amount of international mergers and acquisitions (US $2.75 billion) by China's industrial capital in recent years and the most successful case. Before the split, as the standard product department of NXP, the growth rate was only hovering in single digits due to mature products and low company investment. After the acquisition of Jianguang assets, the three-year revenue increased by 50% to US $1.6 billion. After that, CCG assets sold ANSYS semiconductor to Wentai technology, which has been transformed into China's largest IDM (vertically integrated device) semiconductor company with a market value of more than 100 billion.
In fact, as early as 2015, CCG assets spun off the power semiconductor department from NXP and established Ruineng semiconductor in a joint venture with NXP. Now its revenue has doubled compared with that when it established the joint venture, and will be ready to be listed in the domestic securities market in the near future, which not only greatly improved the business situation, brought success to employees and customers, but also gave very good returns to investors.
It is noteworthy that although the difficulty of international M & A of Chinese capital has increased significantly in the past two or three years, Zhilu capital has sprung up and created a number of successful acquisition cases. In July 2020, Zhilu capital wholly acquired UTAC, the world's third largest automotive electronic packaging and testing enterprise. After more than a year of transformation, UTAC has greatly improved its revenue and net profit. Zhilu capital hopes to build UTAC into a semiconductor packaging and testing enterprise with the top five global revenue and the first profit in China by loading high-quality assets and connecting domestic resources.
- Categories:Industry information
- Author:
- Origin:
- Time of issue:2021-10-27
- Views:0
As a technology driven hard technology industry, semiconductor industry has been inseparable from capital from the beginning. It was with Arthur rock's venture capital that Fairchild Semiconductor, the world's first semiconductor franchise company, was established, and Santa Clara Valley finally became Silicon Valley. With the continuous maturity of the industry, M & A, splitting and reorganization appear more and more in the semiconductor industry, so the importance of capital to the development of the semiconductor industry is becoming more and more prominent.
In China, in the past ten years, the semiconductor industry was in the ice age in the first five years, and few people paid attention to it. However, during this period, starting from the outline for promoting the development of the national integrated circuit industry published by the State Council in 2014 and marked by the establishment of the national integrated circuit industry fund, some olfactory industrial capital began to focus on hard science and technology; With the Sino US scientific and technological war as the tipping point, more and more funds have found the historic opportunity of China's semiconductor industry and began to flock in. Today, no one in the capital circle has not invested in semiconductors.
For China's semiconductor industry, the influx of capital is not a bad thing. For such an industry with very high requirements for capital, talents and fixed investment (Manufacturing), a main factor limiting China's industrial development before 2014 is insufficient investment. But the bubble brought by the capital Carnival approach also has many negative effects.
So, what kind of industrial capital does China Semiconductor need? How should industrial capital play a positive role and avoid negative effects in the historical critical period of the development of China's semiconductor industry?
He Hui, chief analyst of omdia semiconductor, a market research institution, said that industrial capital should have the ability to build a platform and integrate resources. At present, there are more than thousands of integrated circuit enterprises in China. How to help semiconductor enterprises integrate and build large and strong leading enterprises is the number one task of current industrial capital.
In terms of integrating semiconductor industry resources, CCG assets and Zhilu capital under Rongxin industry alliance have very successful cases.
In 2017, CCG assets wholly acquired Nexperia, which was spun off from NXP, which became the semiconductor case with the largest amount of international mergers and acquisitions (US $2.75 billion) by China's industrial capital in recent years and the most successful case. Before the split, as the standard product department of NXP, the growth rate was only hovering in single digits due to mature products and low company investment. After the acquisition of Jianguang assets, the three-year revenue increased by 50% to US $1.6 billion. After that, CCG assets sold ANSYS semiconductor to Wentai technology, which has been transformed into China's largest IDM (vertically integrated device) semiconductor company with a market value of more than 100 billion.
In fact, as early as 2015, CCG assets spun off the power semiconductor department from NXP and established Ruineng semiconductor in a joint venture with NXP. Now its revenue has doubled compared with that when it established the joint venture, and will be ready to be listed in the domestic securities market in the near future, which not only greatly improved the business situation, brought success to employees and customers, but also gave very good returns to investors.
It is noteworthy that although the difficulty of international M & A of Chinese capital has increased significantly in the past two or three years, Zhilu capital has sprung up and created a number of successful acquisition cases. In July 2020, Zhilu capital wholly acquired UTAC, the world's third largest automotive electronic packaging and testing enterprise. After more than a year of transformation, UTAC has greatly improved its revenue and net profit. Zhilu capital hopes to build UTAC into a semiconductor packaging and testing enterprise with the top five global revenue and the first profit in China by loading high-quality assets and connecting domestic resources.
The investment philosophy of Rongxin industry alliance investment institutions in the semiconductor industry is to select mature enterprises (or departments) at the core of the industrial chain, judge that they have sufficient technical competitiveness and industry status, and have the ability to drive the coordinated development of upstream and downstream links. The reason why such enterprises (a part of enterprises) are willing to sell is that the business is in the non strategic direction of large companies, or the low growth for many years is caused by the market strategy mistakes of the original operators. After the acquisition, Rongxin industry alliance can effectively improve the operation of the bidding enterprises through a variety of effective post investment management measures, Let the old revolution radiate new strength.
The investment institutions of Rongxin industry alliance have rich post investment management experience, which can be summarized into 12 words, namely: stabilizing the team, managing the process, replenishing ammunition and releasing potential.
First of all, talents are the key factor to determine whether an investment is carried out. In the investment negotiation stage, Rongxin industry alliance will conduct a comprehensive investigation on the experience, ability and fighting spirit of the professional team of the invested company. After the acquisition, the original core team will usually be retained, but the management team will be re encouraged with an extremely ambitious equity incentive plan to deeply bind the interests of investors and the management team and encourage the senior management team to start a second business.
Secondly, the investment institution of Rongxin Industrial Alliance deeply combs the business processes of the acquired company. Taking manufacturing enterprises as an example, after the enterprise is acquired, the industry experts of Rongxin industry alliance and the management team will find out each factory in the company, investigate the production capacity, yield and management advantages and disadvantages, and first take the requirements of the internal model factory as the requirements of the whole enterprise. After improvement, the practice of the best companies in the industry will be compared. In this way, the production management level will be continuously improved with the cooperation of the management team and the industry experts of the investment company.
Third, as mentioned earlier, many assets acquired by investment institutions of financial and credit industry alliance have entered a mature development period abroad, and it is often difficult to obtain capital investment to support sound development. Without sufficient capital investment and insufficient "ammunition" in R & D and production, they can only maintain low growth and even decline. After the acquisition, one of the biggest turnaround for these enterprises is that they are not short of money. The investment institutions of Rongxin industrial alliance will do a good job in the post investment business planning and business expansion strategy according to the market position of the enterprises in the industry, give the invested enterprises sufficient financial support and resource matching, and sufficient ammunition to lay a good foundation for breaking through the low growth dilemma in the past.
Therefore, on the premise that talents and incentives are in place, business processes are straightened out, sufficient capital investment and upstream and downstream resources are matched, the growth potential of invested enterprises is completely released by making good use of the domestic market environment, and the figures of revenue growth and profit growth are amazing. In recent years, the M & A cases of investment institutions of Rongxin industrial alliance have a very high investment return ratio and post investment management success rate.
The investment philosophy and post investment management results of the investment institutions of Rongxin Industrial Alliance seem to perfectly fit the four requirements of good industrial capital put forward by Zhu Jing, Deputy Secretary General of Beijing Semiconductor Industry Association. Zhu Jing believes that if industrial capital wants to play an effective role in the critical period of China's semiconductor development, it needs to do the following four points: first, use capital to effectively organize domestic industrial resources and promote enterprises to become stronger and better in subdivided fields; Second, introduce and absorb global innovation resources and help these resources integrate effectively with the domestic market; Third, cultivate a group of investors who understand and can empower industries; Finally, by helping the development of key industrial nodes into capital appreciation, that is, making money.
Of course, industrial capital does not necessarily help industrial development. In recent years, the performance of some enterprises after being acquired is not as good as that of independent operation. There are many reasons, but one of the main reasons is that industrial capital does not play its due role in the post investment management of invested enterprises.
In the historical critical period of the development of China's hard science and technology industry, how to let enterprises give play to the multiplier effect of capital and resources, how to avoid the temptation of making fast money and taking shortcuts, and how to balance the responsibility of industrial development and the pressure of making money will always be issues that ambitious industrial capital needs to consider.
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