What is the reason behind BYD’s splitting of semiconductors and listing?

Editor’s note: This article is from the micro-channel public number “into the passenger Tanker” (ID: SQinsight), Author: Xu Yun.

BYD, which has become China’s No. 1 auto company by market value in 2020, is using capital to seek expansion and actively promote the spin-off and listing of its semiconductor business.

The capital market has responded enthusiastically. On December 30, 2020, BYD announced that the board of directors has reviewed and approved the separation and listing of BYD Semiconductor, and authorized the company and BYD Semiconductor’s management to initiate the preliminary preparations for the separation and listing. On the second trading day (January 4) after the news was released, BYD’s A-share share price broke the 200 yuan mark.

On January 20, 2021, the official website of the Shenzhen Securities Regulatory Bureau indicated that BYD Semiconductor Co., Ltd. (hereinafter referred to as “BYD Semiconductor”) had conducted counseling and filing on January 8. CICC will conduct counseling and intend to IPO The stock is listed on the domestic stock exchange. On the same day, BYD’s A-share share price closed at 222 yuan, an increase of 2.68%, and Hong Kong stocks rose by 4.27%; the share price of BYD Electronics related to it also rose 10.73%.

“BYD Semiconductor has the full support of car manufacturers, demand and verification are much easier than design companies, so it is very good in the long run, especially for the long cycle of cars, because this chip is not available in China, and it is available for personal use and external use. “A partner of a semiconductor fund told “Tanker”.

Relying on the vehicle business, BYD’s semiconductor business has been able to develop, but there are also opinions that BYD’s identity as a car company also restricts the development of this business. After splitting and entering the market independently, how competitive is BYD Semiconductor? Can it be bigger and stronger as you wish? If it is successfully listed, can it achieve the 30 billion yuan valuation given by CICC?

BYD’s new story

In the semiconductor field, BYD tells new stories.

Semiconductors are widely used in consumer electronics, communication systems, photovoltaic power generation, lighting, and high-power power conversion. They are important materials for the production of integrated circuits. The packaged integrated circuits are called chips.

Like power batteries, BYD’s new semiconductor story revolves around the electric vehicle business.

IGBT (Insulated Gate Bipolar Transistor) is BYD Semiconductor’s leading product. IGBT is called the “CPU” of power electronic devices, and is the core power device of electric vehicles.