Spending 160 million, why did SMIC choose this "potential stock" in particular?

Produced by | Zhongfang Network

Reviewed by | Li Xiaoyan

On the evening of March 22, Zhongwei Semiconductor announced its intention to increase its capital in Zhuhai Boya Technology Co., Ltd. by 160 million yuan using its own funds, subscribing to an additional registered capital of 12.5 million yuan. Upon completion of the transaction, it will hold 20% of Zhuhai Boya’s shares and become an equity shareholder. Against the backdrop of a recovering global semiconductor market and the accelerated promotion of domestic substitution, this capital increase is not only a key step for Zhongwei Semiconductor to refine its “MCU+ strategy,” but also reflects the strategic logic of domestic chip companies achieving high-quality development through industry chain collaboration.

Looking back at this investment, Zhongwei Semiconductor’s layout is backed by clear strategic considerations and business collaboration needs. As a chip design company focused on MCUs (Microcontroller Units), memory chips have become the core layout area of the company’s “MCU+ strategy.” Earlier this year, Zhongwei Semiconductor launched its first SPI NOR Flash, officially entering the memory product market. This capital increase in Zhuhai Boya is a further refinement of this layout, leveraging the target company’s technology and product accumulation to quickly fill the gaps in R&D and mass production in the memory chip field, forming a collaborative effect of “MCU+ memory,” and enhancing the competitiveness of one-stop intelligent control solutions.

From the expectations, this investment is likely to achieve a win-win situation for both parties. Zhongwei Semiconductor stated that the memory chip market is expected to continue recovering by 2026. Currently, Zhuhai Boya has shown a significant increase in revenue and a rapid rise in gross profit margin. The working capital provided by this capital increase will help Zhuhai Boya enter a rapid growth phase, likely turning losses into profits. For Zhongwei Semiconductor, leveraging Zhuhai Boya’s technological accumulation in the NOR Flash field can further enrich its own memory product matrix and expand downstream application scenarios in consumer electronics, industrial control, and automotive electronics. At the same time, the collaborative effect can reduce R&D and market expansion costs, injecting new momentum into revenue growth. Additionally, this investment uses its own funds and will not have a significant impact on Zhongwei Semiconductor’s financial status and operating results, reflecting the company’s prudent investment strategy.

Supporting Zhongwei Semiconductor’s bold layout is its impressive operating performance. According to the 2025 annual report, the company achieved annual revenue of 1.122 billion yuan, a year-on-year increase of 23.09%; net profit attributable to the parent company was 284 million yuan, a year-on-year surge of 107.68%, achieving rapid growth in both revenue and profit. The performance growth is mainly attributed to two factors: first, the rapid growth in shipments of automotive-grade chips and industrial control chips, with automotive-grade chip shipments increasing by approximately 100% year-on-year; second, continuous optimization of product structure, with the sales revenue proportion of 32-bit MCUs rising from about 32% to 36%, and the overall gross profit margin increasing from approximately 30% last year to 34%. By the end of 2025, Zhongwei Semiconductor’s total assets were 3.68 billion yuan, with equity attributable to shareholders of 3.178 billion yuan, and ample cash reserves, providing financial strength for external investment.

In terms of production capacity, Zhongwei Semiconductor issued a price increase notice for MCU and NOR Flash products in January this year, with increases ranging from 15% to 50%, mainly due to tight capacity at upstream wafer factories and extended delivery times for foundry services. The company indicated that some component numbers are in short supply, and there are instances of customers waiting for products, with overall downstream demand on the rise.

From the perspective of market competition, the NOR Flash industry exhibits a highly concentrated characteristic. In the automotive NOR Flash sector, the top five global manufacturers—Infineon, Winbond Electronics, Micron Technology, Nanya Technology, and GigaDevice—collectively hold about 84% of the market share. Taking industry leader GigaDevice as an example, the company has been deeply involved in the NOR Flash field for many years, and in 2025, its share in the global NOR Flash market ranks among the top. In contrast, although Zhuhai Boya, which is receiving the capital increase, is currently under performance pressure, it has distinct technological and product advantages, making it an important support for Zhongwei Semiconductor’s layout in the memory sector.

Founded in 2014, Zhuhai Boya was created by returnee doctors and focuses on the R&D design of memory chips such as NOR Flash. Its founder and actual controller, DI LI, is a senior expert in flash memory technology who has worked for international giants such as Micron and Fisoh Semiconductor, possessing rich industry experience. The core technology team also has over 10 years of experience in flash memory chip design, mass production, and promotion, with a strong technical foundation.

From an industry perspective, the collaboration between Zhongwei Semiconductor and Zhuhai Boya aligns with the development trends and paths of the semiconductor industry. The semiconductor industry is currently entering a new development cycle. On one hand, the explosion of AI computing power demand, the recovery of the memory chip market, and the continuous advancement of automotive electrification are bringing strong growth momentum to the industry. The World Semiconductor Trade Statistics Organization predicts that by 2026, the global semiconductor market size will grow by 26.3% to reach 975 billion USD, with memory chips as a core growth driver, and the tight capacity situation will continue, bringing development opportunities to related companies. On the other hand, driven by dual factors of geopolitical and domestic substitution, industry mergers and acquisitions are accelerating.

Currently, China’s semiconductor industry is shifting from “point breakthroughs” to a new stage of “ecosystem integration.” For Zhongwei Semiconductor, this investment is not only an extension of its industrial layout but also a key move in its transformation from an MCU manufacturer to a provider of comprehensive intelligent control solutions. As Zhongwei Semiconductor’s vice president Yu Feng stated: “In the semiconductor industry, besides AI, the next major development cycle is in memory.” With Zhuhai Boya’s continuous advancement in product high-endization and the cyclical recovery of the memory chip market, the synergistic effects of this investment are expected to gradually emerge in the future.