Since its establishment in April last year, Hubble, a subsidiary of Huawei, has made frequent investments. It has increased capital and shares in about 20 domestic technology industry chain companies, most of which are semiconductor companies. Some of the invested companies have been deeply bound with Huawei, and Huawei has accelerated The strategic intention of localization substitution and restructuring the supply chain is obvious.
It is worth mentioning that on October 26 this year, Hubble Investments set its target overseas, and cooperated with JF Technology, which is engaged in semiconductor test probe and test socket business, to establish a joint venture company in China and conduct deep business binding. .
Favored by Huawei
According to JF Technology’s announcement, JF International, a wholly-owned subsidiary of the company, and Hubble Investment, a wholly-owned subsidiary of Huawei Investment Holding Co., Ltd., signed the Capital Increase Agreement and the Shareholders’ Agreement on October 26, and intends to apply to JFH Technology (Kunshan ) Co., Ltd. (Chinese name: Jiefeng Testing Technology (Kunshan) Co., Ltd.) increased its capital. JFH Technology is mainly engaged in the design, manufacturing, sales and technical support of integrated circuit test contact solutions.
JF International will subscribe JFH Technology’s capital of US$500,000 in cash, and Hubble will contribute US$1.5 million in cash to the company, of which US$410,000 will be recorded as the increased registered capital, and the remaining US$1.09 million will be accounted for. Recorded as capital reserve.
After the capital increase is completed, JFH Technology will have a registered capital of US$910,000, of which JF International owns 55% of the equity and Hubble owns the remaining 45%.
The announcement pointed out that the above-mentioned business cooperation is based on the voluntary cooperation of both parties, and for the following two considerations:
(1) Intellectual property rights owned by JF Technology and its subsidiaries ("JF Group") are licensed to JFH Technology;
(2) JFH Technology provides integrated circuit test contact solutions and related products to Huawei and its subsidiaries in China.
JF Technology stated that through this cooperation, JF Group can establish a long-term strategic partnership with Huawei and gain the opportunity to enter the Chinese market. It will produce and provide high-performance test contactors for Huawei and other Chinese customers.
In addition, because JFH technology has the opportunity to work closely with Huawei to develop new test contact technologies for 5G and 6G networks, and in the future, it will transfer technology and knowledge from JF Group to JFH technology, enabling JFH technology to develop locally in Malaysia Improve the value chain of the semiconductor industry as well as talents.
Sought after by the market
JF Technology was established in 2006 and was listed on the Malaysian MESDAQ market in 2008. It is currently a leading supplier of test probes and test socket design and manufacturing for the global semiconductor industry. It has a R&D center and manufacturing base in Malaysia.
J Foong Technologies was established in 1999 and is a wholly-owned subsidiary of JF Technology. It is mainly engaged in the production and trade of electronic products and components. Initially, it only provided test probe products. In 2005, the company established the original design manufacturing (ODM) department JF Microtechnology, successfully extended to complete high-performance test contact solutions.
According to an executive of a domestic test socket manufacturer, JF Technology is considered the “predecessor” in the industry. Its products have high service life and good endurance when testing QFN packaged chips. It is a benchmark for peer learning. It mainly deals in shrapnel test sockets. This field has built a very deep patent barrier, which is also the main reason that restricts domestic test socket manufacturers from entering large manufacturers of similar structure products.
JF Technology's test socket products are widely used in radio frequency/millimeter wave, automotive, precision simulation, high power, power module/IGBT and other fields, including Changjiang Electronics Technology, Huatian Technology and other major manufacturers are using them, and are involved in Sino-US trade Before the friction, Huawei was also using JF Technology products extensively, but for various reasons, Huawei currently uses more domestic test socket products.
The above-mentioned executives further stated that JF Technology's test socket products also have their own defects, that is, the delivery cycle is too long. Generally speaking, the delivery cycle of JF Technology's test socket products is about one month, while the delivery cycle of domestic test socket products with different structures is about 10 days. In urgent cases, it can be delivered ahead of time.
As we all know, domestic packaging and testing manufacturers are currently full of orders and very short of production capacity. Some domestic packaging and testing manufacturers have already placed orders in Q1 2021. Therefore, time is very important for test manufacturers.
In this case, even if the capacity of the machine is sacrificed, many domestic customers have to look for domestically available test socket products to replace JF Technology's products.
Overweight the Chinese market
The market demand for JF Technology's test socket products is very strong, but its R&D and manufacturing base in Malaysia, design, production, logistics and after-sales service cannot keep up with the needs of domestic customers, resulting in missed orders.
From the operating performance of JF Technology in recent years, it can be seen that its performance improvement has also encountered a bottleneck.
From FY2015 to FY2017, JF Technology`s operating performance has grown very significantly, but it has almost stagnated in FY2018, and even experienced a decline of 8% in FY2019. The reason is mainly due to the severe market situation and the impact on China and the United States. And Southeast Asia’s exports declined.
Obviously, JF Technology has the answer to how to break through the operating ceiling.
According to the fiscal year 2020 (as of June 30, 2020) report disclosed by JF Technology, its export sales to China were very strong, with a year-on-year increase of 47%. The sales revenue from exports to the Chinese market exceeded the Malaysian home market for the first time. Total revenue contributed 9.21 million ringgit (approximately 14.74 million yuan), accounting for 34%, and the 2019 fiscal year turnover was 6.25 million ringgit (approximately 10 million yuan), accounting for 27%.
In fact, JF Technology is well aware of its own shortcomings and the importance of the Chinese market.
According to industry insiders, JF Technology has been looking for mainland housing manufacturers that can cooperate in processing, but there has been no progress.
It is worth noting that on August 11, 2020, JFH Technology (Kunshan) Co., Ltd. was registered and established in China, and officially announced the JFH Test Technology R&D, Design and Sales Headquarters at the 2020 Kunshan Golden Autumn Economic and Trade Fair held on October 26 For the project, the company plans to set up a R&D, design, and sales headquarters in Huaqiao, Kunshan. The project integrates R&D, design, manufacturing and sales services. The total investment of the project is estimated to be US$30 million, and the output will be 500 million yuan after reaching production.
For JF Technology, to increase the Chinese market means to seize the future. Cooperating with Huawei can obtain a key customer and strategic partner, which is not only a guarantee of technological improvement and performance, but also a smoother entry into the Chinese market.
For Huawei, chips are still the focus of its development. At this stage, the most important thing is to unite all the forces that can be combined, invest in supply chain manufacturers, bind them deeply and help their development, so as to establish a stable and reliable supply chain at hard times and achieved considerable development.