Financial Performance - In 2022, Hua Hong Semiconductor achieved a record revenue of US$2,475.5 million, representing a 51.8% increase compared to the previous year[31]. - Profit for the year was US$406.6 million, reflecting a 76.0% increase year-on-year[32]. - The overall gross profit margin reached 34.1%, an increase of 6.4 percentage points from the previous year[32]. - Revenue reached an all-time high of US$2,475.5 million, representing a 51.8% increase from the previous year, driven by increased wafer shipments and improved average selling prices[141]. - Gross profit increased by 86.8% to US$843.7 million, primarily due to improved average selling prices and product mix, despite increased depreciation costs[143]. - Profit for the year rose to US$406.6 million, up from US$231.0 million in 2021, with a net profit margin of 16.4% compared to 14.2% in 2021[150]. - The company has maintained profitability for 48 consecutive quarters, driven by product mix optimization and capacity expansion[124]. Market Growth and Expansion - The company experienced over 100% year-on-year revenue growth in automotive electronics[32]. - Significant revenue growth was noted from regional markets including the United States, Europe, Japan, and China[32]. - North America was the fastest-growing market, with a revenue increase of 86.9% year-on-year, reaching US$297.7 million[127]. - The Industrial & Automotive Electronics market saw a revenue growth of 74.1%, reaching US$550.3 million[131]. - Revenue from semiconductor wafers accounted for 96.0% of total revenue, amounting to US$2,376.7 million, which is a 52.2% increase year-on-year[125]. Production Capacity and Technology - As of the end of 2022, Hua Hong Semiconductor's annual production capacity increased from 2.4852 million to 3.8627 million (CAGR of 24.67%) over the last three years[33]. - The existing 12-inch fab operated at a monthly production capacity of 65,000 wafers in 2022, with plans to increase this to 95,000 wafers in 2023[33]. - The company is focused on expanding its 12-inch production platform and enhancing its "8-inch + 12-inch" strategy to meet market demands[124]. - The company plans to expand its production capacity in Wuxi, with phase-I and phase-II construction to meet long-term semiconductor market demand[139]. - Hua Hong Semiconductor applied for 654 patents in 2022, with over 4,100 authorized invention patents granted[137]. Corporate Governance - The company has implemented corporate governance procedures that comply with the principles in the Corporate Governance Code[59]. - The Board of Directors consists of eight members, including two Executive Directors and three Independent Non-Executive Directors, ensuring a diverse governance structure[64]. - The company has established mechanisms to ensure independent views and input are available to the Board, including annual independence assessments for Independent Non-Executive Directors[68]. - The company recognizes the importance of sound corporate governance practices and continually updates its governance practices in response to regulatory changes[60]. - The company has a clear separation of roles between the Chairman and the President, enhancing the effectiveness of its governance structure[75]. Innovation and Strategy - The company continued to innovate in specialized process technologies, enhancing its core competitiveness[31]. - Hua Hong Semiconductor's dual-pronged strategy of "Specialty IC + Power Discrete" facilitated rapid penetration into emerging markets[31]. - Hua Hong Semiconductor aims to continuously innovate and optimize product structure in alignment with market trends for high-quality development[35]. - The management team is focused on identifying new opportunities and prospects in a changing environment[35]. - The company is committed to creating new products for customers worldwide through continuous innovation[35]. Financial Management - Administrative expenses increased by 34.1% to US$266.7 million due to decreased government grants and increased labor expenses[146]. - Finance costs surged by 204.9% to US$40.3 million, primarily due to increased bank borrowings[148]. - Total non-current assets increased by 4.4% to US$3,979.7 million, driven by an 8.1% rise in property, plant, and equipment[151]. - Cash and cash equivalents increased by 24.8% to US$2,008.8 million, attributed to improved operating cash flows[162]. - The company does not recommend payment of a dividend for the year ended December 31, 2022, to retain sufficient cash for investment activities[175]. Workforce and Diversity - The gender ratio of the Group's workforce as of December 31, 2022, was approximately 73% male to 27% female[97]. - The Company has one female Director, achieving compliance with gender diversity requirements[95]. - The Nomination Committee discussed measurable objectives for achieving diversity on the Board and recommended them for adoption[94]. Connected Transactions - The company reported semiconductor product sales to Huahong Group amounting to US$17,447,000 in 2022, with an annual cap of US$30,036,000[196]. - The company's purchases of wafers and chemicals from Huahong Group totaled US$19,247,000 in 2022, against an annual cap of US$25,920,000[196]. - The provision of foundry services and general supporting services by Huahong Group amounted to US$89,000 in 2022, with an annual cap of US$5,179,000[196].
华虹半导体(01347) - 2022 - 年度财报