Core Viewpoint - The company, Saiwei Electronics, is a leading player in the MEMS foundry sector, poised to benefit from the growing demand for MEMS sensors in various industries, including IoT, automotive, and healthcare [1][2]. Group 1: Company Overview - Saiwei Electronics was established in May 2008 and went public on the Shenzhen Stock Exchange in May 2015, specializing in high-end integrated circuit wafer manufacturing [1]. - The company acquired Swedish MEMS manufacturer Silex in 2016, which has applications in communication, computing, biomedical, industrial automotive, and consumer electronics [1]. - In June 2025, the company announced the transfer of control of Silex while retaining a 45.24% stake, making Silex an important associate company [1]. Group 2: Market Opportunity - The MEMS sensor market is projected to grow from $14.6 billion in 2023 to $20 billion by 2029, with a CAGR of 5% [1]. - China is identified as the largest MEMS market globally, with significant growth opportunities driven by advancements in mixed reality, smart connected vehicles, industrial internet, and AIoT [1]. - Despite many domestic players in the MEMS sector, there is a scarcity of independent third-party manufacturers with mass production capabilities and multi-platform processes [1]. Group 3: Product Development - The company has developed key manufacturing technologies for laser radar mirrors using MEMS technology, enabling the integration of laser reflectors and electromagnetic two-dimensional actuators [2]. - The MEMS micro-mirror is a core component of MEMS laser radar, characterized by high manufacturing barriers and high value, presenting opportunities for domestic MEMS device companies to achieve local replacements [2]. Group 4: Financial Forecast and Investment Recommendation - Revenue projections for the company are $896 million, $580 million, and $766 million for 2025, 2026, and 2027, respectively, with year-on-year growth rates of -25.63%, -35.23%, and 31.97% [3]. - The net profit attributable to the parent company is forecasted to be $1.132 billion (including gains from the transfer of Silex shares), -$48 million, and $47 million for the same years, with corresponding EPS of 1.55, -0.07, and 0.06 [3]. - The company has a relatively low PB compared to the average of comparable companies, and due to its focus on MEMS foundry as a domestic leader, it is rated as a "buy" [3].

Core Insights - Company reported a revenue of 570 million yuan for the first half of 2025, representing a year-on-year growth of 3.4% [2] - The net profit attributable to shareholders was a loss of 650,000 yuan, significantly narrowing from the previous year's loss [2] - The MEMS business achieved a revenue of 533 million yuan, a year-on-year increase of 14.09% [2] Revenue Breakdown - MEMS wafer manufacturing generated 310 million yuan, remaining stable compared to the same period last year [2] - MEMS process development revenue reached 223 million yuan, showing a growth of 39.01% year-on-year [2] - The overall gross margin for MEMS business was 39.47%, consistent with the previous year [2] Production and Operations - The Beijing FAB3 production line is in a ramp-up phase, transitioning from process development to risk trial production and mass production, but continues to incur losses due to high depreciation and R&D costs [2] - The Swedish production line reported good order, production, and sales conditions, particularly for MEMS-OCS wafers, maintaining strong profitability [2] Strategic Decisions - Company completed the sale of control over Swedish Silex in July 2025, transitioning it from a wholly-owned subsidiary to an important equity investee, aimed at mitigating systemic risks from geopolitical changes [3] - R&D expenses for the first half of 2025 reached 199 million yuan, increasing by 9.85% year-on-year, accounting for 34.97% of total revenue [3] Market Opportunities - Company is actively targeting market opportunities in downstream sectors such as communication computing, biomedical, industrial automotive, and consumer electronics [3] - The company is focusing on producing various MEMS devices for leading enterprises in sectors like silicon photonics, lidar, motion capture, photolithography, DNA/RNA sequencing, high-frequency communication, and AI computing [3] Future Outlook - Despite the sale of Swedish Silex, the company maintains qualified production capacity across different production lines, which can achieve synergy and complementarity in capacity and market [4] - The company is expected to maintain a significant position in the pure MEMS foundry sector [4]