HC SEMITEK(300323)2022-12-07 08:34Group 1: Acquisition and Market Strategy - The acquisition of BluCrystal is based on its high performance commitments and its role as a major supplier of sapphire substrates for LED epitaxial chips, which is crucial for production [2] - BluCrystal's production capacity is currently underutilized due to its conservative business model, but post-acquisition, it is expected to gain stable sales channels, significantly increasing its capacity utilization [2][3] - The demand for sapphire window pieces is rising, especially with the increasing market share of domestic smartphones, which will lead to a substantial increase in procurement [3] Group 2: Financial Aspects and Investment - A total of 324 million RMB has been allocated for the funding of the acquisition and subsequent capacity expansion of BluCrystal [3] - The price of sapphire substrates has fluctuated significantly, peaking at 30 USD per piece before dropping to 5-6 USD per piece, influenced by market dynamics and government support for the LED industry [4] Group 3: Production and Cost Efficiency - The complementary demand for sapphire substrates and window pieces allows for seasonal adjustments in production, enhancing overall profitability and capacity utilization [3] - The company plans to use a significant portion of the funds raised from the share issuance to invest in BluCrystal's project development and capacity expansion post-acquisition [3][5] - Various raw material prices are declining, and operational costs are expected to decrease as the scale of production increases, leading to lower unit costs [4] Group 4: Technological Advancements - There is still considerable room for improvement in chip performance, with ongoing advancements expected to narrow the technology gap between domestic companies and global leaders [5] - The company has already entered the small-pitch screen market, which is anticipated to contribute significantly to future revenues despite its current small market share [5]