Leading Chinese IC assembly and testing player Tonfgu Microelectronics has revealed its first-quarter 2023 results, seeing a revenue of CNY4.64 billion (US$670 million), up 3.11% YoY. Net profit was CNY4.55 million, down 97.24% YoY.
A crucial partner of AMD, which contributes to approximately 80% of Tonfgu's orders, Tongfu reported a revenue of CNY21.4 billion for full-year 2022, up 35.52% YoY. The company is aiming to bring 2023 revenue to CNY24.8 billion.
According to Tongfu, exchange rate fluctuations have resulted in exchange loss, and the industry downturn has weakened demand for some end products, leading to a decline in capacity utilization and gross profit margin. Nevertheless, the company has boosted investment into advanced packaging technologies, such as chiplet. In early April, the company indicated that it has successfully developed the relevant packaging capabilities for AMD's Zen 5 microarchitecture, with the production process undergoing validation.
Commenting on the trend of import substitution, Shih Ming-da, the chairman of Tongfu Microelectronics, indicated that domestically produced equipment still lag behind US and Japanese counterparts in terms of reliability and precision. However, domestic equipment can already substitute imported equipment in low-cost, traditional packaging applications. As reported by Chinese media Ijiwei, China can already produce 60% of the equipment needed for traditional packaging.
