Galaxycore CEO on Growth of China Semiconductor Industry

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PerceptionCoreVision publishes a transcript of Galaxycore CEO Zhao Lixin (Stanly Zhao) talk at the 2nd Shanghai Free Trade Zone Lingang New Area Semiconductor Industry Development Forum held on September 15, 2021. Few quotes:

"China has a lot to do in the development of image sensors. From the perspective of sales volume, Galaxycore plus Omnivision's CIS shipments account for more than 50% of the world; from the perspective of value, Gekewei’s 1 billion plus Howe 2 billion, accounting for about 16% of the global 20 billion CIS market.

I often proudly say that our Galaxycore is good. Why is Galaxycore good? We, Galaxycore, were the largest domestic customer of SMIC, the largest foundry in China in 2007. During the financial crisis in 2008, we placed an order of 100,000 8-inch wafers for SMIC. Of course, we were surpassed by HiSilicon, because HiSilicon was too powerful.

Before that, Galxycore has been the top four customers of SMIC, and we are also the major customers of packaging factories such as Changjiang Electronics, Jingfang and Huatian. Therefore, only after you have a large scale can you promote the national economy and support the development of this industry. Therefore, I put a lot of emphasis on the shipment volume of a wafer, the Internet emphasizes traffic, and semiconductor companies must emphasize the use of silicon wafers. Galaxycore currently ranks among the top three in terms of silicon wafer usage in China.

The second is to focus on high-end, because only ICs on high-end brand mobile phones have sufficient scale and profits. Without profit, there is no way to do high-end R&D. Therefore, to drive the development of the entire industry chain in China, there must be sufficient profits. Just like a company like Huawei, its high-end mobile phone camera supports three world-renowned companies, Sony, Largan and Sunny. So it can feed so many people with a single chip. But if you can't do high-end, it is unlikely to be profitable.

The development of China's semiconductor industry still requires the use of mobile phones to drive our chip design companies. Design companies drive Foundry factories, packaging factories, and then equipment manufacturers and material manufacturers.

Why can Galaxycore do well? Because Galaxycore is unique in process research and development. Therefore, in order to speed up the research and development of high-end products, we must build our own factories to do the research and development of special processes. Now Lingang is a very good place, so we invested 2.2 billion US dollars in Lingang to build a world's most advanced characteristic process line.

Based on this sales data of Galaxycore, I will tell you about our development history. You can see that from 2006 to 2007, it was the research and development period. In 2008, a large number of shipments were made. In 2009, despite the financial crisis, our business doubled.

In 2014, we made about 340 million U.S. dollars. At this time, we were stuck overseas because we couldn't make BSI crafts. Because the neck of BSI was stuck, we couldn't make high-end products. Then we will cooperate with Samsung around 2016 and 2017 to make our BSI products. At this time, the company's performance is developing by leaps and bounds. Last year we approached 1 billion US dollars.

When there is a breakthrough in research and development, this performance is relatively easy to grow rapidly, and the shipment volume is also amazing. We have achieved shipments of nearly 2.4 billion units. With this scale, we will be able to do more high-end designs later."

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