Commentary
Event: On August 27, Fudan Microelectronics released its semi-annual report for 2025. The company achieved revenue of 1.839 billion yuan in H1 2025, a year-on-year increase of 2.49%; net profit attributable to shareholders was 194 million yuan, a year-on-year decrease of 44.38%; and net profit excluding non-recurring items was 182 million yuan, a year-on-year decrease of 40.96%.
In Q2 2025, the company achieved revenue of 951 million yuan (YoY +5.50%, QoQ +7.09%); net profit attributable to shareholders was 57 million yuan (YoY -69.26%, QoQ -57.82%), and net profit excluding non-recurring items was 49 million yuan (YoY -67.92%, QoQ -62.89%).
Revenue growth in H1 2025, but performance declined due to increased inventory impairment provisions. In the first half of 2025, the company’s revenue increased by 2.49% year-on-year, with a comprehensive gross margin of 56.80%, an increase of 0.31 percentage points year-on-year. However, net profit attributable to shareholders decreased by 44.38% year-on-year, mainly due to the reduction in the value-added tax deduction for integrated circuit design companies and a decrease in government subsidies, as well as a decline in demand for some products in inventory and an increase in inventory aging, leading to increased inventory impairment provisions. In the first half of 2025, the company recognized various impairment losses of approximately 172 million yuan, including inventory impairment losses of 143 million yuan. Currently, the company is actively adjusting its inventory structure to reduce the inventory levels of certain products, and improvements are expected in the second half of the year.
High-reliability industry demand is improving, and FPGA product line revenue is growing significantly. In the first half of 2025, the revenue from various product lines was as follows: security and identification chips approximately 393 million yuan, non-volatile memory approximately 440 million yuan, smart meter chips approximately 248 million yuan, FPGA and other products approximately 681 million yuan, and testing service revenue (after consolidation) approximately 77 million yuan. Except for the non-volatile memory business, which saw a year-on-year decline, all other product lines experienced varying degrees of year-on-year growth, with the FPGA and other product lines seeing a year-on-year increase of 23.15%, providing significant support for the company’s operations.
FPGA maintains domestic leadership, and new product developments are promising. The company is a leading domestic supplier of FPGA products, currently offering three sub-series of chips: FPGA, PSoC, and FPAI (programmable artificial intelligence chips), along with EDA development tools. Currently, the company’s product line is primarily represented by billion-gate FPGAs and PSoC chips based on 28nm process technology, while actively promoting the customer introduction and mass production of ultra-large-scale FPGAs, RF-FPGAs, and RFSoC products based on advanced 1xnm FinFET processes and 2.5D advanced packaging. The company’s FPAI heterogeneous fusion architecture chip integrates CPU, FPGA, and NPU, aimed at customizable edge and fusion inference applications with reconfigurable intelligent chips. The company has established a chip design platform and application development software platform for this heterogeneous fusion intelligent chip and is developing a series of products with computing power ranging from 4TOPS to 128TOPS, with the first 32TOPS computing power chip progressing well in promotion.
Investment Recommendations: It is expected that the company’s net profit attributable to shareholders will reach 641 million, 1.077 billion, and 1.505 billion yuan in 2025, 2026, and 2027, respectively, corresponding to current price PE ratios of 83, 50, and 36 times. The company is a leading IC design company in China, with domestic technology leadership in high-reliability businesses such as FPGA, maintaining a “recommended” rating.
Risk Warning: Risks of downstream market fluctuations; risks of intensified market competition; risks of research and development progress not meeting expectations; risks of asset impairment.
This article is sourced from the report: “Fudan Microelectronics (688385.SH) 2025 Semi-Annual Report Commentary: Leading Domestic FPGA Manufacturer, New Products like FPAI Worth Looking Forward To” | Published on August 29, 2025 | Report Agency: Minsheng Securities Research Institute | Report Authors: Fang Jing S0100521120004, Li Shaoqing S0100522010001
Research Team Introduction
Fang Jing, Chief Analyst at Minsheng Electronics, has a master’s degree from Xi’an University of Technology and over 5 years of experience in the semiconductor industry, having worked at global leaders such as Texas Instruments. He is also the founder of the semiconductor startup incubation platform IC Coffee.
As a core team member, he ranked 3rd in the New Fortune Electronics Industry in 2019; 2nd/3rd in the Crystal Ball Electronics Industry in 2018/2019; and 3rd/2nd in the Golden Bull Award Electronics Industry in 2018/2019. As the chief analyst, he ranked 4th in the Wind Gold Medal Analyst in 2021. License number: S0100521120004
Li Shaoqing, Senior Analyst in the Electronics Industry, holds a master’s degree from Wuhan University and has previously worked at Southwest Securities and Cinda Securities. He joined Minsheng Securities in 2022. License number: S0100522010001
Li Meng, Analyst in the Electronics Industry, holds a master’s degree in finance from East China Normal University and has previously worked at Founder Securities Research Institute. He joined Minsheng Securities in 2022. License number: S0100522080001
Song Xiaodong, Analyst in the Electronics Industry, holds a master’s degree from Hong Kong University of Science and Technology and has previously worked at Dongwu Securities Research Institute. He joined Minsheng Securities in 2022. License number: S0100523110001
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