Recently, China announced an anti-dumping investigation against American analog chips, which is not surprising. In April 2024, the China Semiconductor Industry Association released clear “rules for determining the country of origin,” stating that the origin of integrated circuits is determined by the “tape-out location” rather than the “packaging location.” This means that Shanghai Belling, which relies on major products from mainland foundries like SMIC, can perfectly avoid the high tariffs of 125% imposed on American chips. This move poses a “dimensionality reduction attack” on American giants like Texas Instruments (TI) and Analog Devices (ADI), allowing them to relinquish a significant market share. The localization rate of China’s analog chip market is only 16% (even lower in the automotive sector), indicating a vast replacement space. As a member of the “national team” with state-owned background, Shanghai Belling has entered my field of vision.
First, let’s look at the evolution.
Birth and Foundation: The Pioneer of China’s Integrated Circuits (1988-2000)
Shanghai Belling’s story began in1988, a time when China’s semiconductor industry was just beginning to sprout. Shanghai Belling Microelectronics Manufacturing Co., Ltd. was established with the support of Shanghai Yidian Holdings (Group) Co., Ltd. Its establishment marked the birth of the first Sino-foreign joint venture in integrated circuits on the Chinese mainland.
Milestone in 1988: Shanghai Belling collaborated with the Belgian Interuniversity Microelectronics Centre (IMEC) to introduce advancedCMOS integrated circuit production lines. This was not only a technology introduction but also a talent cultivation and experience accumulation, laying a solid foundation for China’s integrated circuit industry.
Milestone in 1998: Shanghai Bellingwas listed on the Shanghai Stock Exchange, becoming the first listed company in China’s integrated circuit industry. This not only brought valuable funding to the company but also proved the potential of China’s semiconductor industry in the capital market, providing valuable experience for future financing.
Transformation and Growth: From Manufacturing to Design (2000-2010)
Entering the21st century, the global semiconductor industry entered a“light asset” model, focusing on chip design while outsourcing manufacturing to specialized foundries. Shanghai Belling also followed this trend and began an important strategic transformation.
Milestone in 2003: Shanghai Belling established close cooperation with leading foundries (such as SMIC), gradually divesting its production lines and shifting its core business to integrated circuit design. This transformation allowed Shanghai Belling to successfully transition from a“heavy asset” manufacturing enterprise to a“light asset” chip design company, enabling it to focus more on R&D and innovation.
Milestone in 2008: During this period, Shanghai Belling successfully developed and launched multiple power management, smart meter, and communication chips, filling gaps in the domestic market and beginning to establish a foothold in their respective fields.
Diving Deep and Breaking Through: Focusing on Niche Markets and Product Diversification (2010-Present)
Entering a new stage of development, Shanghai Belling’s strategy became clearer; it no longer pursued being large and comprehensive but focused on specific niche markets while continuously making technological and product breakthroughs.
Milestone in 2014: The company successfully launched high-performance analog chips with independent intellectual property rights, which are widely used in consumer electronics, industrial control, and automotive electronics, breaking the monopoly of foreign manufacturers.
Milestone in 2019: With the rise of emerging industries such as5G, the Internet of Things, and new energy vehicles, Shanghai Belling actively laid out and launched corresponding high-performance power management chips, analog-to-digital converters (ADC), and various sensors. The success of these new products brought new growth points to the company.
Milestone in 2021: Shanghai Belling was acquired by Huada Semiconductor, a subsidiary of China Electronics Corporation (CEC), becoming a core member enterprise. This reorganization provided Shanghai Belling with strong resource and financial support, allowing it to play a more important role in the national semiconductor industry strategy.
From a Sino-foreign joint venture manufacturing enterprise to the first listed chip company in China’s A-shares, and then to an industry leader focused on chip design, Shanghai Belling’s development journey is not only a story of continuous transformation and breakthroughs but also a vivid portrayal of China’s integrated circuit industry moving from catching up to independence and then to the international stage.
The company’s product line is as follows
Shanghai Belling holds a significant market position in the domestic semiconductor industry, especially in specific niche areas:
Leading in Niche Areas: The company performs outstandingly in the smart metering chip sector, with a domestic market share exceeding20%, ranking among the top three in the industry alongside Weisheng Information and Neusoft Zhaibo, deeply binding with the State Grid and Southern Grid. Its products consistently hold the top share in the State Grid’s IoT meter and single-phase meter tenders.
Pioneer in Domestic Substitution: In several niche tracks of analog chips, such as data converters (ADC/DAC), high-precision metering, and power devices (IGBT), the company is committed to breaking foreign monopolies, with some products already achieving domestic substitution and entering mainstream supply chains.
State-Owned Resources and Collaborative Advantages: Backed by the CEC Group, the company has advantages in obtaining policy support, national-level orders (such as smart grid construction), industry chain collaboration (cooperating with foundries like SMIC and Huahong Semiconductor), and financing costs.
Technical Accumulation and Certification: The company has nearly40 years of technical accumulation, with over1000 patents filed. Many of its products have passed automotive-grade certification (AEC-Q100), successfully entering the automotive electronics front-end market, becoming an important engine for future growth.
Financially, the revenue proportions of various businesses in 2024 are as follows.
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Signal Chain Analog Chips: Account for27.53% of main revenue.
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Power Management Chips: Account for26.71% of main revenue.
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Power Devices: Account for12.32% of main revenue.
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Semiconductor Material Trade (classified here or as “others”): Account for32.05% of main revenue.
The profit contributions of various businesses in 2024 are as follows
It can be seen that signal chain analog chips and power management chips are the main contributors.
Let’s popularize what signal chain analog chips are.Signal chain analog chips are the bridge connecting the “real world” and the “digital world.” Although they do not handle computation and storage, they are crucial for ensuring that all electronic devices can accurately perceive, understand, and respond to the external world. Without them, our phones, cars, computers, and other devices would not function properly.Signal chain analog chips are like the various sensory organs and nervous system in your body.
Their workflow
Perceiving the Real World (Input):
Your eyes can see light, your ears can hear sound, and your skin can feel temperature and pressure. These are all analog signals, which are continuously changing and cannot be directly understood by the brain’s digital processor.
Conversion and Processing (Signal Chain):
Once these sensory organs receive analog signals, they convert them into electrical pulses (digital signals) that can be recognized and processed by the brain through a series of neural processing. This process is called the“signal chain.”
Final Processing and Decision Making (Output):
Once the brain receives these digitized electrical pulses, it can analyze, store, and make decisions. For example, when you see a red light, the brain processes it and commands your foot to press the brake.
Next, let’s look at the competitors. In the analog chip field, internationally, giants like Texas Instruments (TI) and Analog Devices dominate the vast majority of the market share, especially in high-performance and high-end application areas.
Compared to international giants
Looking at stock prices, the company’s stock price surged significantly in 2024, achieving an increase of 183%, mainly due to the following three reasons.
1. High Growth in Automotive Electronics: In 2024, the company’s automotive electronics business revenue surged by 113% year-on-year, with over 80 products entering mainstream automakers and Tier 1 supply chains, applied in core areas such as battery management systems (BMS). This not only brought revenue but also opened up future growth space. Meanwhile, the industrial control and energy storage business also performed well, with a revenue growth of45%.
2. Significant Improvement in Financial Data: Shanghai Belling achieved an operating revenue of 2.819 billion yuan in 2024, a year-on-year increase of 31.89%; it achieved a net profit attributable to the parent company of 396 million yuan, a significant turnaround from a loss of 60.22 million yuan in 2023. The non-recurring net profit, which better reflects the profitability of the main business, also reached 283 million yuan, a year-on-year increase of 66.27%. This V-shaped reversal demonstrates to the market that its operating conditions have substantially improved.
3. Product Innovation and R&D Investment: The company’s performance growth is attributed to continuous high-intensity R&D investment, with R&D expenses reaching 430 million yuan in 2024, a year-on-year increase of 19.69%. Throughout the year, 937 new products were launched, forming a strong product matrix (with a total of 4793 products on sale), covering power management, signal chain, and power devices, supporting its expansion into multiple markets.
Future Growth Points: Three Areas
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Automotive Electronics Business: This is Shanghai Belling’s fastest-growing and most promising business. The company is not only providing simple single-device components but is also starting to offer module solutions (such as the 800V platform module developed in collaboration with Huawei), which means higher value and profit per product. As more products pass automotive-grade certification and enter more vehicle models, this business is expected to transition from current “high growth” to “scale expansion,” becoming the most important new growth pole.
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Industrial Control and Energy Storage Business: This area is key for the company to build its second growth curve. Industrial control and energy storage have high requirements for chip reliability, lifespan, and performance; once entering the supply chain, the cooperation relationship is usually very stable. The company’s layout of third-generation semiconductor technologies such as silicon carbide (SiC) aligns with the industry’s trend towards efficiency and energy conservation. The production of the Thailand base provides an important springboard for the company to avoid trade barriers and expand into global markets.
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Smart Meter Chip Upgrades: This is the basic plate and cash flow source of the company’s traditional advantageous business. Although the growth rate may not be as rapid as the previous two, its advantage lies in its extremely high market share and stable demand. The new round of technological upgrades (from HPLC to “dual-mode” upgrades) has brought significant increases in product unit price and profit margins, ensuring the stability and growth of the basic plate. Strong customer relationships and a deep understanding of domestic standards form a strong moat..
Next, let’s look at the company’s financial forecast.
At the time of writing this article, the company’s market value was27.6 billion yuan, with a reasonable valuation between17.7-25 billion yuan. InA-shares, good stocks are never cheap (End of article).