On April 28th, TWSC released its 2022 annual report and the first quarter report for 2023, which was the first annual report disclosed after the company went public. In 2022, the company delved into the mobile storage market and began to expand its embedded storage business, achieving a counter trend growth in operating revenue. According to the annual report, the company achieved a revenue of 1.191 billion yuan in 2022, a year-on-year increase of 10.27%; Realized a net profit attributable to the parent company of 67.1916 million yuan. The company also disclosed its first quarter report for 2023, which showed a revenue of 302 million yuan, a year-on-year increase of 21.76%.
High resilience assists in traversing cycles
The storage chip industry has strong cyclical characteristics. In 2022, it is facing complex and ever-changing external environmental pressures, as well as addressing the industry's predicament of high upstream original factory inventory and weak downstream demand. In 2022, TWSC's mobile storage business achieved a revenue of 588 million yuan, a year-on-year increase of 40.04%. The company smoothed out the performance fluctuations of the industry's downturn cycle through a differentiated business model, stabilized the gross profit margin level of the mobile storage business, and maintained a relatively stable profit security cushion and risk resistance ability.
TWSC's mobile storage business is centered around self-developed main control chips, continuously strengthening the competitiveness of the company's module products. In January 2022, the company successfully taped and produced TW8581 (USB3.2 ultra high speed 5GHZ storage control chip) in Taiwan United Power, and achieved mass production in the first half of last year, successfully introducing the company's mobile storage module product. With the gradual increase in the self-sufficiency rate of the main control chip in the company's mobile storage module products and the introduction of self-developed main control chips in mass production, the stability and cost advantage of the company's module products continue to improve, and the market competitiveness further strengthens.
Diversified layout of product lines to achieve high growth
While delving deeply into the mobile storage market, TWSC has begun to vigorously expand its embedded storage business. The company acquired the UDStore brand at the end of 2022 to further enter the embedded market. At present, the company has formed three complete product lines: mobile storage, solid-state drives, embedded and industry storage, covering all types of NAND flash application products. The company will maintain its resource and technological advantages in the original mobile storage market while rapidly developing towards the broader market space of solid-state hard drives, embedded systems, and industry application storage.
In terms of sales and product applications, the company has established a sales team for high-end solid-state drives and embedded storage new product lines, focusing on application fields such as consumer electronics, automotive electronics, servers, and data centers, and vigorously expanding industry customers. In addition, the company actively seeks business opportunities in overseas markets, further expanding the market coverage of its products.
Building a comprehensive product matrix enriches the application scenarios of the company's products, helps the company respond to the diverse product needs of some existing customers, or expands new customers in various downstream application fields to meet the diverse needs of various customers.
Increase R&D investment to consolidate technological advantages
TWSC was listed on the main board of the Shenzhen Stock Exchange in July 2022, and the raised funds will mainly be invested in the 3D NAND flash memory control chip and mobile storage module solution technology transformation and upgrading project, SSD control chip technology development, application and industrialization project, and R&D center construction project.
At present, the fundraising project is progressing smoothly and is continuously promoting the research and development of the main control chip and the construction of the research and development center. During the reporting period, the company established a new Chengdu R&D center, mainly used for the research and development of the company's main control chips. While enriching the company's technical reserves, it provides a technical foundation for the mass production and introduction of the main control chips in the company's products.
In 2022, TWSC continued to increase research and development investment, actively introduced high-end R&D technical talents, accelerated the transformation of technological achievements, ensured the company's continuous R&D innovation ability, and consolidated the company's technological leading advantage in product development.
In 2022, the company's research and development expenses were 66.9282 million yuan, an increase of 21.148 million yuan year-on-year, with a year-on-year increase of 46.19%. The company has also vigorously expanded its recruitment of research and technical personnel in the field of chip design. As of the end of the reporting period, the number of research and development personnel in the company was 140, an increase of 35.92% year-on-year.
It is reported that among the main research and development projects, USB2.0 storage disk control chips, USB3.0 storage disk control chips, and SD storage card control chips have been shipped in large quantities. These research and development projects are expected to optimize the comprehensive competitiveness of the company's flash drive products, maintain the company's basic competitiveness in the flash drive field, and contribute to the steady growth of the company's share in the mobile storage field.
In 2023, the company plans to invest in three main control chips, namely the memory card main control chip TW2985, the solid-state drive main control chip TW6501, and the embedded storage main control chip TW1801. The company continues to carry out synchronous research and development layout in accordance with the medium to long term iterative evolution plan of the original NAND Flash technology, and imports products after mass production of the main control chip to improve the core advantages of the product.