Smartsens releases business data

Link: http://news.10jqka.com.cn/20230825/c650064231.shtml

Translated using Google translate:

The content of the business review of the board of directors of Smartway in the 2023 semi-annual period is as follows:

　　1. Description of the company's industry and main business during the reporting period

　　(1) The industry to which the company belongs

　　The company's main business is the R&D, design and sales of high-performance CMOS image sensors, and its products are widely used in emerging fields such as security monitoring, machine vision, and intelligent vehicle electronics. According to the China Securities Regulatory Commission's "Guidelines for the Industry Classification of Listed Companies" (revised in 2012), the company belongs to the "computer, communication and other electronic equipment manufacturing industry" in the "manufacturing industry", and the industry code is "C39". According to the national economic industry classification and code (GB/T4754-2017), the company's industry belongs to "integrated circuit design" in "software and information technology service industry". According to the "Strategic Emerging Industry Classification (2018)", the company's industry is "integrated circuit design". According to the "Shanghai Stock Exchange's Interim Regulations on Issuance and Listing Application and Recommendation of Enterprises on the Science and Technology Innovation Board", the company's industry belongs to the "semiconductor and integrated circuit" industry in the "new generation information technology field" stipulated in Article 4 (1).

　　(2) Industry development

　　(1) Global semiconductor and integrated circuit industry

　　The global semiconductor industry has a certain cycle, and the business cycle is closely related to factors such as the macro economy, downstream application demand, and its own production capacity and inventory. According to preliminary statistics from Gartner, a world-renowned market research institution, the total global semiconductor revenue in 2022 will be US$601.7 billion, an increase of 1.1% from US$595 billion in 2021. Some semiconductor end markets are starting to show weakness, especially those impacted by consumer spending. Rising inflation, taxes and interest rates, as well as higher energy and fuel costs, are putting pressure on consumers' disposable income. This is affecting spending on electronics such as PCs and smartphones. Semiconductor Intelligence also predicts that the continued strong automotive market and Internet of Things (IoT) growth will help the semiconductor market recover. The risk of a global recession in 2023 is decreasing. It is initially expected that the semiconductor market will continue to recover in 2024, the end market will grow moderately, and the growth rate of the semiconductor market will be 5% to 10%.

　　(2) my country's semiconductor and integrated circuit industry

　　In the past 20 years, information technology has been the main driving force for the rapid economic growth of China and the world. Since the beginning of the new century, China's GDP growth has shown a strong correlation with the integrated circuit industry, and this correlation has become more and more obvious after entering the second decade of the new century. In recent years, China's semiconductor and integrated circuit industry has experienced rapid development, industry demand has expanded rapidly, and policy support has continued to be favorable. According to the data from the China Semiconductor Industry Association, from 2017 to 2021, the sales of China's integrated circuit industry showed an upward trend year by year, and the growth rate remained at a relatively high level. 2021 is the first year of China's "14th Five-Year Plan". Driven by the good performance of the domestic macro economy, the domestic integrated circuit industry continues to maintain a rapid and steady growth trend. In 2021, the sales of China's integrated circuit industry will exceed one trillion yuan for the first time, reaching 1,045.83 billion yuan, a year-on-year increase of 18.2%. In the first half of 2022, the sales of China's integrated circuit industry reached 476.35 billion yuan, a year-on-year increase of 16.1%, and its market size is expected to reach 1,442.5 billion yuan in 2023.

　　According to the forecast of IC Insights, the compound annual growth rate of China's integrated circuit market from 2020 to 2025 will be 9.2%, and the proportion of domestic chips in China is expected to increase from 15.9% in 2020 to 19.4% in 2025.

　　(3) CMOS image sensor market pattern and development trend

　　Thanks to the widespread popularity of multi-camera mobile phones and the rapid development of security monitoring, smart car cameras and machine vision, the overall shipments and sales of CMOS image sensors have continued to expand. According to statistics from Frost & Sullivan, from 2016 to 2020, global CMOS image sensor shipments have grown rapidly from 4.14 billion to 7.72 billion, with a compound annual growth rate of 16.9%. In 2022, affected by the sluggish terminal demand, according to Omida's forecast analysis, the global CMOS image sensor market may decline to US$18.6 billion after maintaining double-digit growth for six consecutive years, a year-on-year decline of nearly 7% from US$20.1 billion in 2021 . But at the same time, the agency also predicts that the global CMOS image sensor market will resume growth in 2023, and the market size will increase to US$19.3 billion, a year-on-year increase of 4%, and the growth momentum is expected to continue until 2026, when the market size will increase to $26.9 billion. Currently, CMOS image sensors are mainly used in cameras of mobile phones. Demand has also increased in recent years for other applications such as machine vision, autonomous driving, and augmented reality.

　　(3) Company business model

　　The company's business model belongs to the Fabless model. The company focuses on the research and development, design and sales of CMOS image sensors, and entrusts the main production links such as wafer production and packaging to external companies. However, considering the convenience of final product debugging and quality control , The company built its own test factory to complete most of the work of the final test (FT test), and the company does not have a huge investment in wafer production lines and packaging plants. The company has an independent and complete R&D, procurement, production and sales system, and independently conducts business activities according to its own situation, market rules and operating mechanism.

　　2. Core technology and R&D progress

　　1. Core technology and its advanced nature and changes during the reporting period

　　The company's main core technologies are all applied to the design and production of CMOS image sensors, and the source of technology is all independent research and development.

　　2. Research and development achievements obtained during the reporting period

　　During the reporting period, the company applied for 89 new intellectual property projects (including 49 invention patents), and a total of 53 intellectual property projects were authorized (including 5 invention patents). As of June 30, 2023, the company has accumulatively obtained 94 overseas patent authorizations and 1 utility model patent, and has obtained 89 domestic invention patent authorizations and 202 utility model patents.

　　3. R&D investment table

　　Reasons for major changes in total R&D investment compared with the previous year

　　From January to June 2023, the total investment in research and development was 140.8188 million yuan, a year-on-year increase of 12.42%, mainly because the company invested more manpower and material resources in order to consolidate the technological leadership of existing products and develop new technologies and products.

　　4. Current research projects

　　*The discrepancy between the total amount of accumulated investment and the sum of the sub-item values ​​is caused by rounding.

　　5. R&D personnel

　　6. Other instructions

2. Discussion and analysis of business conditions

　　In the first half of 2023, the company achieved a total operating income of 1,072,712,100 yuan, an increase of 6.25% over the same period of the previous year, of which the combined revenue of the smart security industry was 649,231,000 yuan, a decrease of 16.41% over the same period of the previous year, accounting for 60.52% of the main revenue ; Consumer electronics revenue was 315.8608 million yuan, an increase of 89.15% over the same period of the previous year, accounting for 29.45% of the main revenue; automotive electronics revenue was 107.6204 million yuan, an increase of 63.08% over the same period of the previous year, accounting for 10.03% of the main revenue .

　　During the reporting period, due to the impact of multiple factors such as the macro environment, the recovery of market demand was not as good as expected, resulting in pressure on the sales prices of some of the company's products, and the revenue scale of the smart security business declined compared with the same period last year. However, relying on efficient R&D efficiency and market acumen, the company's consumer electronics and automotive electronics business revenue has achieved substantial growth compared with the same period last year. The goal of the tripartite business pattern of "smart security + consumer electronics + automotive electronics" provides strong support.

　　1. In the field of smart security, the company continued to make efforts in the high-end field, creating a combination of cutting-edge security products such as the Pro Series full-performance upgrade series, the AI ​​Series high-end imaging series, and the SL Series super star-level series. In recent years, the growth rate of the intelligent security industry has been steady, the vertical application fields are flourishing, and the diversified demands are constantly being released. The company is committed to exploring more potential needs of security customers, using high-performance technical products to accurately reach customers' actual applications. In the first quarter of this year, the company launched SC880SL, a new 4K super star-level image sensor with a large target area. It is the company's first 1/1.2" 8MP image sensor product. Achieve excellent night vision imaging effects. In addition, the excellent high-temperature imaging quality brought about by process upgrading and optimization also provides SC880SL with stronger market core competitiveness, striving to empower the development of smart security applications with excellent high-performance imaging performance.

　　For a long time, machine vision, as an important image information capture window, has played an important role in the automation and intelligent upgrading of various industries. At present, machine vision has been widely used in various application fields, including industrial manufacturing and logistics represented by intelligent manufacturing, intelligent screening and intelligent logistics code reading, as well as drones, sweeping robots and AR/VR. represent emerging application areas. The company has released a total of 8 professional-grade machine vision application CIS products, which can be widely used in various industrial inspection scenarios and industrial machine vision applications such as industrial code readers, AGV navigation systems, and 3D scanners. In the future, the company will further deploy high-speed industrial chip products in an all-round way, empower customer applications with high-performance imaging quality, and provide support for industrial intelligent upgrades.

　　In the future, with the continuous release of national economic policies, the gradual recovery of customer demand, the continuous reduction of downstream inventory levels and the continuous increase in the process of import substitution of high-end products, the prosperity of the smart security industry is expected to continue to pick up. The market size of the company in the smart security industry is expected to improve further.

　　2. In the field of automotive electronics, the company always adheres to safety as the cornerstone, establishes a high-quality R&D control system at the beginning of product design, and aligns with international standards, and regards vehicle safety as a key factor in the field of production and R&D. The company has passed the three major industry standard system certifications of IATF16949, AEC-Q100 and IS26262:2018 automotive functional safety process ASIL D, and has established a complete car-level chip R&D and quality management system to ensure the reliability of the entire life cycle of automotive CIS products. Escort." The company's vehicle-mounted CIS products have been mass-produced by customers such as BYD ( 002594 ) , FAW, SAIC, Dongfeng Nissan, Great Wall, Ssangyong, Kaiwo, Leapao, and Lantu.

　　According to the monitoring data of Gaogong Intelligent Vehicle Research Institute, a third-party research institution, the domestic automotive surround view market has huge development potential. In 2022, the adoption rate of front-mounted panoramic view of passenger cars in the Chinese market (excluding imports and exports) has reached 30.87%, and in 2021 it will be 22.5%. . It can be seen from this that the front-loading rate of panoramic surround view has been rapidly increasing in recent years, which will also bring more demand for image sensors, which will undoubtedly bring huge business opportunities to the company.

　　Facing the field of autonomous driving, the company released the SC850AT, a new 8-megapixel car-grade image sensor by the end of 2022. This product is developed based on the ASIL D functional safety process and complies with AEC-Q100Grade2 and functional safety ISO26262ASIL B level requirements. It fully meets the high safety and high reliability requirements of the smart car industry and helps high-end ADAS/AD systems move towards a higher level. This product is currently in the sample testing phase.

　　In the future, the company will continue to focus on the three major application scenarios of in-vehicle imaging, perception and in-cabin, continuously launch and further enrich the product matrix of ATSeries series, optimize and improve product performance and user experience, and promote the development of intelligent vehicles and the penetration of intelligent driving technology and popularity to increase market share and brand influence.

　　3. In the field of consumer electronics, through the company's continuous research and development and innovation, the company's smart phone CIS products cover the mainstream needs of the current mobile phone market, and the product resolutions range from 800,000 pixels to 50 million pixels. According to Counterpoint data, smartphones are the largest downstream application field of CIS (accounting for more than 70%). Throughout the market, consumers of high-end smartphones have higher and higher requirements for camera shooting performance. Under this trend, CIS, as the core imaging device, has become an important field for breaking the performance of mobile phone cameras. At present, 50 million pixels is the mainstream configuration of the main camera of flagship mobile phones, and it is expected to have a stable life cycle for a long time in the future, which also reflects the market's pursuit and demand for high-pixel smartphones to take pictures.

　　For the 50-megapixel product track, the company has launched two high-end CIS products, SC550XS and SC520XS, which can meet the needs of flagship smartphone main and front cameras, ultra-wide-angle and telephoto cameras in terms of performance. The SC550XS, which focuses on the high-end flagship main camera market, has been mass-produced and shipped during the reporting period, and another high-end product, the SC520XS, has also entered the stage of small-scale mass production. In the future, the company will launch more new smartphone application products to empower smartphone imaging systems with excellent imaging quality.

　　During the reporting period, the company won many awards covering IC design, image sensors, electronic components, Internet of Things companies and other fields, fully demonstrating the company's leading edge in technology and R&D strength, and representing all sectors of society's support for the company's R&D High recognition of strength. During the reporting period, the company won the following awards: "2023 China IC Design Achievement Award - Top Ten Chinese IC Design Companies" selected by the world's leading media organization ASPENCORE, and won the "2023 China IC Design Achievement Award - Best Image Sensor of the Year" ; "2022 Excellent Domestic Brand Enterprise in Electronic Components Industry" and "2022 Top 100 Chinese Internet of Things Enterprises" selected by Huaqiang Electronics Network; "2023 China International Social Public Security Products Expo-Innovative Product Excellence Award" issued by China Security Association wait.

　　Looking forward to the future, the company will adhere to the innovation-driven development concept, continue to improve the company's research and development capabilities, and optimize products and services. We will be customer-oriented, meet customer needs with better products and services, and promote the company's continuous development in various business fields.

3. Risk factors

　　(1) Core Competitiveness Risk

　　1. Risk of technology iteration

　　The product technology iteration speed of the integrated circuit design industry is fast, and the replacement of CMOS image sensors and new application scenarios emerge in endlessly. Falling interest rates and poorer customer experience. On the other hand, there are certain uncertainties in the development direction of integrated circuit products. Design companies must maintain a high sensitivity to the iterative trend of mainstream technologies and the market space of scenario applications in order to grasp the general direction of technological development in a timely manner. If the company cannot adapt to the latest trend of technological development and adjust its strategy in a timely manner, it will cause a huge waste of labor costs, capital costs and time costs, and at the same time cause the company to lose key opportunities for development.

　　2. Risk of R&D failure

　　The company's main business is the research and development, design and sales of high-performance CMOS image sensor chips. The development of its products is characterized by high technical content, long research and development cycle, and large initial investment. At present, in order to adapt to the development of the industry and keep up with the development trend of the industry's mainstream technology, the company continues to invest a lot of funds and personnel in the research and development of new technologies and new products. However, if the company fails to make correct judgments on the direction of R&D, fails to make breakthroughs in key technologies during the R&D process, fails to meet expectations in product performance indicators, or develops products that cannot meet market demand, the company will face the risk of R&D failure, resulting in the failure of early R&D. It is difficult to recover the investment, which will adversely affect the company's subsequent development and market competitiveness.

　　3. Risk of core technology leakage

　　The integrated circuit design industry is characterized by high technology intensity. The company has accumulated a large number of core technologies through long-term development, forming the company's own core competitiveness. The company has formed a series of unique core technologies in the fields of pixel design and circuit design, and continues to develop new technologies and apply for intellectual property rights. In the future, if the company's core technology is leaked due to reasons such as poor storage of core technology information or the loss of core technology talents, and the core technology is copied and utilized by competitors, it will have an adverse impact on the company's core competitiveness.

　　4. The risk of core technology talent loss

　　The integrated circuit design industry is a typical technology-intensive industry, and its reliance on R&D personnel, especially core technical personnel, is much higher than other industries. The company has formed a mature and innovative core R&D team in the process of development. However, with the intensification of industry competition, the competition for outstanding talents has become more intense. At the same time, the company must continue to introduce new talents to adapt to the ever-changing environment. Industry technology development trend. If the company fails to strengthen the incentives for existing core technical talents and attract new talents, it will directly affect the company's technological innovation capabilities and product research and development capabilities.

　　(2) Operation risk

　　1. Business model risk

　　As an integrated circuit design company, the company adopts the Fabless business model and focuses on chip R&D, design, and sales. The production process is completed in foundries such as wafer factories and packaging factories. The degree of coordination is high. The company has established long-term good cooperative relations with major suppliers such as TSMC, Samsung Electronics, Hefei Jinghe, Jingfang Technology ( 603005 ), Huatian Technology ( 002185 ), and Keyyang Semiconductor. However, due to the fact that the company cannot independently complete wafer production And packaging process, if the price of wafer and packaging purchases rises sharply, or cannot form sufficient production capacity guarantee for the company, it will directly affect the company's profitability, sales scale, shipment progress and supply guarantee to customers.

　　2. The high degree of supplier concentration and the risk of periodic fluctuations in capacity utilization

　　As an integrated circuit design company, the company's main production processes such as wafer manufacturing and packaging need to be completed in foundries. At the same time, due to the high threshold for wafer manufacturing and packaging in the integrated circuit industry, wafers that meet the company's technology and production requirements worldwide Manufacturing and packaging suppliers are limited. During the reporting period, global wafer and packaging and testing production capacity generally entered a relatively tight cycle. If the price of wafers and packaging rises sharply, or the company’s product production is affected due to shortage of wafer supply and insufficient packaging production capacity, it will have a negative impact on the company. The profitability of the company and the stability of product supply are adversely affected.

　　3. The risk of high customer concentration

　　The company adopts a sales model combining direct sales and distribution. Due to the large market demand for the company's products, the company's management of customers is relatively strict. Direct sales customers generally choose well-known terminal brand customers in the industry, while other terminal customers supply and service through well-known dealers in the industry. This strategy will make the company's customer concentration ratio relatively high.

　　Due to the high concentration of customers, if a customer with a high proportion of sales has fluctuations in cooperation with the company due to risks such as geopolitics, self-management, cooperation disputes, and tight production capacity, and the company needs a certain period of time to expand new customers, it may As a result, the company's sales scale has passively declined, and the sales payment cannot be guaranteed, which will have an adverse impact on the company's performance in the short term.

　　4. The risk that the speed of product application expansion is not as fast as expected

　　The company continues to expand product application areas according to market demand and its own technical characteristics, helping the company's continued growth in performance. During the reporting period, the company has gradually expanded from smart security to automotive electronics, consumer electronics and other fields. However, if the company's business expansion in new application areas is slower than expected, or the progress of related technology research and development is slower than expected, it may have an adverse impact on the company's operating performance growth.

　　5. The risk of not being able to maintain high-speed growth in the future

　　Affected by the rapid development of downstream industries such as 5G, smart cities, artificial intelligence, and automobiles in recent years, the demand for CMOS image sensor chips in various fields is very strong. The operating performance shows a high growth rate: However, the company's operating performance is greatly affected by the fluctuations of the upstream production capacity supply side and the downstream terminal demand side. Certainty, thereby bringing fluctuations to its income and profitability, and there may be a risk that it will not be able to maintain high-speed growth in the future.

　　(3) Financial risk

　　1. Inventory price decline risk

　　The scale of inventory increases year by year with the expansion of business scale. If the market demand environment changes, market competition intensifies or the company fails to effectively expand sales channels, optimize inventory management, and reasonably control inventory scale, it may lead to unsalable products and inventory backlog, thereby increasing the risk of inventory price decline, which will have an adverse impact on the company's operating performance.

　　2. Accounts receivable recovery risk

　　Although the company's accounts receivable are all aged within 12 months at this stage, the risk of bad debt losses is relatively small, but as the company's business scale continues to expand, or due to factors such as changes in the market environment and customer business conditions, the credit policy will be relaxed. , the company's accounts receivable balance may gradually increase. If the company's accounts receivable cannot be recovered in a timely manner in the future, it will have an adverse impact on the company's capital utilization efficiency and operating performance.

　　3. The risk of exchange rate fluctuations

　　During the reporting period, the company had overseas sales and purchases, quotations and settlements in US dollars. With the expansion of the company's overall business scale, the amount of overseas sales and purchases is expected to further increase. Although the company has considered the possible fluctuations in the exchange rate between the conclusion of contracts or orders and payment receipts and payments when conducting business, with domestic and foreign politics, Due to changes in the economic environment, there are still great uncertainties in exchange rate changes. In the future, if the exchange rate between RMB and US dollar fluctuates sharply, it will have a certain impact on the company's performance.

　　4. Gross profit margin fluctuation risk

　　The company's main product is a high-performance CMOS image sensor. The gross profit margin of the main product is mainly affected by various factors such as downstream demand, product selling price, product structure, raw material and packaging and testing costs, and the company's technical level. If the above factors change, it may cause the company Gross profit margin fluctuates, thereby affecting the company's profitability and performance.

　　5. Risk of changes in preferential tax policies

　　On December 14, 2022, the company obtained the "High-tech Enterprise Certificate" (Certificate No.: GR202231004395) jointly issued by the Shanghai Science and Technology Commission, the Shanghai Municipal Bureau of Finance, and the Shanghai Municipal Taxation Bureau of the State Administration of Taxation, and the company was identified as a high-tech enterprise. The certification is valid for three years, and the company can enjoy a preferential corporate income tax rate of 15%. If the above-mentioned preferential tax policies of the state change in the future, or the company no longer has the qualifications to enjoy the corresponding tax incentives, the company may face the risk of reducing future profits due to changes or reductions in tax incentives.

　　(4) Industry Risks

　　1. Industry cycle risk

　　The company's industry is integrated circuit design, and its main products are high-performance CMOS image sensors, which are used in smart security, automotive electronics, consumer electronics and other fields, so they are inevitably affected by macroeconomic fluctuations. If the development of the downstream application field itself is impacted by industry cyclical factors, it will not be able to effectively support the company's product demand, which in turn will affect the company's performance.

　　Wafer production, packaging and other industries are prone to wandering between insufficient capacity and excess capacity due to the long production capacity construction cycle, which in turn affects the development of integrated circuit design companies. When there is a periodic shortage of production capacity in the supply chain, if the company cannot achieve priority supply of production capacity through in-depth cooperation with suppliers, it may face problems such as unstable product delivery and reduced product gross profit, which will affect the company's performance and market recognition. make an impact.

　　2. Market competition risk

　　Although the company maintains a high market share in smart security and other fields through its unique technologies and products, there are still a large number of companies with technological competitiveness in the CMOS image sensor market. In the context of my country's strong support and development of the integrated circuit industry and the continued rapid development of the market in the future, there may be more CMOS image sensor design companies to increase resource investment in this field and form direct competition with the company's products. If the company cannot continue to improve its technology and product research and development capabilities, and cannot continue to update and iterate in response to downstream demand, the company's current market share may be squeezed out by other competitors, which will adversely affect the company's performance.

　　(5) Macro-environmental risk

　　The company's overseas sales account for a relatively high proportion. At the same time, some products of the company's main terminal brand manufacturers are also sold to countries and regions other than mainland China. If in the future, due to trade protection or other reasons, or because of geopolitical risks, relevant countries or regions build trade barriers through trade policies, tariffs, import and export restrictions, etc., restricting the business development of corporate customers and terminal brand manufacturers in the local market, it may It will lead to a decrease in the demand for the company's chips from the company's customers and related terminal brand manufacturers, which will have an adverse impact on the company's operating performance.

　　(6) Risks of special corporate governance structure with special voting rights

　　On July 3, 2020, all shareholders of Smartway Co., Ltd. signed the Articles of Association of Smartway (Shanghai) Electronic Technology Co., Ltd., setting up excess voting rights, and agreeing that Xu Chen and his wholly-owned or controlled shareholders will exercise their subscribed capital contribution ratio of 5 double the voting rights.

　　On December 15, 2020, the company held the inaugural meeting and the first general meeting of shareholders. All shareholders attended the meeting. The meeting unanimously reviewed and approved the "Proposal on the Establishment of Special Voting Shares in Smartway (Shanghai) Electronic Technology Co., Ltd.", and Formulate the company's articles of association and set up special voting rights share arrangements. Unless the special voting rights arrangement is terminated by the resolution of the company's general meeting of shareholders, the company's special voting rights will continue to operate for a long time. According to the special voting rights setting arrangement, the company's share capital is composed of Class A shares with special voting rights and Class B shares of ordinary shares. Except for deliberating specific matters, Class A shares and Class B shares have the same voting rights, the controlling shareholder and actual controller Xu Chen holds the Class A shares with the same number of voting rights per share as other shareholders (including the target of this public offering) 5 times the voting rights held by each Class B share.

　　Under the mechanism of special voting rights, Xu Chen, the controlling shareholder and actual controller of the company, can decide the ordinary resolutions of the company’s general meeting of shareholders, and can also play a similar decisive role in the special resolutions of the general meeting of shareholders, which will restrict other shareholders of the company except Xu Chen to a certain extent. Influence on the company's major decisions through the general meeting of shareholders.

　　If small and medium shareholders, including public investors, raise objections when voting at the general meeting of shareholders because they have different opinions on the company’s major decisions and controlling shareholders and actual controllers, it is more likely to be due to the relative number of voting rights per share. Significant differences without sufficient ability to have a substantial impact on the voting results of the general meeting of shareholders.

　　Under special circumstances, the interests of Xu Chen may be inconsistent with the interests of other shareholders of the company, especially the interests of small and medium shareholders, so there is a possibility of harming the interests of other shareholders, especially small and medium shareholders.

4. Analysis of core competitiveness during the reporting period

　　(1) Analysis of core competitiveness

　　1. Technological innovation capabilities that closely meet customer needs

　　The company adheres to the vision of "let people see and understand the world better", adheres to the concept of "customer-centric, committed to providing high-quality, intelligent video solutions", and develops a series of distinctive core technology. During the reporting period, the company deeply explored the needs of customers in emerging image sensor application fields such as smart security, automotive electronics, and consumer electronics, and developed a diversified and differentiated product series, covering a full range of high, medium and low-end products to meet customers with different positioning need.

　　2. Efficient chip research and development capabilities

　　The company has always adhered to the product development concept of "R&D generation, mass production generation, and pre-research generation". The number of mass-produced chips has increased significantly every year. Efficient research and development capabilities enable the company to quickly respond to changes in customer needs, so that its end products can better adapt to the complex and changing market environment, and achieve a win-win situation with customers.

　　3. Solid intellectual property system barriers

　　The company’s R&D investment is high. As of June 30, 2023, the total R&D investment is 140.8188 million yuan, a year-on-year increase of 12.42%. In order to consolidate the technological leadership of existing products, the company also develops new technologies and new products. The ratio of the number of people is 50.45%.

　　As of June 30, 2023, the company has obtained a total of 386 authorized patents, including 183 invention patents and 203 utility model patents. In addition, the company has obtained 21 software copyright registrations.

　　4. Outstanding R&D team

　　Under the leadership of core technicians Dr. Xu Chen, Dr. Mo Yaowu and Ma Weijian, the company has built an outstanding R&D team through long-term technical cultivation and personnel training. The founder, Dr. Xu Chen, has more than 20 years of research and work experience in the field of CMOS image sensors. He has solved noise problems in the design of high-quality CMOS imaging systems, improved light sensitivity and night vision effects, and developed stacked global shutter image sensors. and other aspects to play a leading role in technology. Dr. Mo Yaowu has worked in semiconductor related fields for nearly 30 years, promoting the introduction of high-performance, low-power, and low-noise column-parallel readout architectures in the industry, and presided over the design of many mainstream CMOS image sensors. Ma Weijian has nearly 20 years of experience in chip research and development and industrialization, and has played an important role in promoting the company's various image sensor products with high sensitivity, high signal-to-noise ratio, and near-infrared sensitivity enhancement performance and industrialization.

　　The company attaches great importance to the introduction and training of talents, regards the ability of the company's R&D and technological innovation team as the company's core resources, recruits technical talents from home and abroad, and has established an excellent R&D team. As of June 30, 2023, the company has a total of 333 R&D personnel, 194 of whom have a master's degree or above.

　　5. Strong customer resource system

　　With long-term industry accumulation and outstanding product quality, the company has accumulated rich customer resources. The products are not only used in Dahua ( 002236 ), Hikvision ( 002415 ), DJI, Uniview Technology, Xiaomi Technology, Samsung In the terminal products of electronics and other brands, it has also accumulated a large number of small and medium-sized customer groups as a basis, forming a strong customer resource system.

　　The company has established a close cooperative relationship with end customers, deeply participates in the product design of customers, can collect customer product demand information in a timely manner, and always keeps pace with or even ahead of the increasing needs of customers in product design, and quickly implement products. In customization and development, according to the continuous update needs of customers, through the rapid iteration method of "small steps and fast running" and convenient product upgrade channels, new products with better performance and better meeting customer needs are launched in a short period of time to serve customers. In the production process, the company independently completes the final product test, which can not only control the terminal export of product quality, but also make fine adjustments according to the characteristics of the company's products, so as to achieve the best customer experience. The company's professional ability, fast response technical support and after-sales service team can quickly solve the problems encountered by customers before and after sales, assist customers to quickly complete mass production of products and solve problems in customers' use of products in a timely manner, creating a good customer experience.

　　Through long-term stable and efficient cooperation, the company has formed a good reputation among the terminal brand customer groups, cultivated strong customer stickiness, and guaranteed the stability of the company's performance.

　　6. Stable supply chain partnership

　　Under the current industrial structure, the supply chain is an important link to ensure the stable development of semiconductor and integrated circuit design companies. The company's product design is deeply integrated and optimized with the production process of the fab to meet the scene adaptability needs of multiple application fields. The company has established a close strategy with fabs such as TSMC, Samsung Electronics, and Hefei Jinghe through technical cooperation. partnership. In addition, it has also maintained good cooperative relations with packaging and testing factories such as Jingfang Technology, Huatian Technology, and Keyyang Semiconductor.

　　The company effectively integrates its own technical advantages with suppliers' production capacity and strategic needs, and through technical cooperation, it not only achieves product and process breakthroughs, but also enhances supplier stickiness. The company has adopted a multi-regional supply chain layout strategy, and has established strategic cooperation-level wafer foundry and packaging and testing cooperation platforms in mainland China, Taiwan, South Korea and other countries and regions. And efficiently integrate supply chain resources to provide a strong guarantee for production capacity.