Event: Texas Instruments released the financial report of Q4 in 2021 on January 26. Q4 achieved a revenue of US $4.832 billion, a year-on-year increase of 19% and a month on month increase of 4.07%, exceeding the market expectation of US $4.425 billion; The net profit reached US $2.506 billion, a year-on-year increase of 38.34% and a month on month increase of 6.72%.
The performance guidelines exceeded expectations and the high outlook of the simulation industry continued: as a global leader in analog chips, TI’s performance is a barometer to judge the prosperity of the simulation industry. Q4’s revenue reached US $4.832 billion, with a year-on-year increase of 19% and a month on month increase of 4.07%, exceeding market expectations, and the company’s revenue has achieved positive month on month growth for six consecutive quarters. Among them, the company’s revenue from simulation business was US $3.758 billion, a year-on-year increase of 20.18% and a month on month increase of 5.92%. The company expects the revenue of Q1 in 22 years to be US $4.5 billion to US $4.9 billion, with a median year-on-year increase of 9.58% and a slight decrease of 2.73% month on month, which also exceeds the market expectation of US $4.37 billion in the early stage, highlighting the continuous high outlook of the simulation industry.
Ti gives priority to ensuring the supply of industrial and automobile customers, and domestic manufacturers welcome alternative opportunities: in recent years, Ti has continued to increase investment in industrial and automobile markets with higher gross profit margin, while the proportion of consumer markets has continued to decline. In terms of the company’s downstream market revenue in 21 years, industry accounted for 41%, automobile 21%, consumer electronics 24%, communication 6% and enterprise 6%. Industry + automobile accounted for 62% of the company’s revenue, an increase of 5 percentage points over 20 years. Under the production capacity shortage, Ti gives priority to ensuring the supply of overseas industrial and automotive major customers, and analog IC for consumer electronics continues to be in short supply. Hmov and other mobile phone brand manufacturers have strengthened the introduction of domestic products, bringing accelerated substitution opportunities to domestic analog manufacturers.
The production capacity will be released to alleviate the short-term mismatch between supply and demand, but will not change the long-term domestic substitution trend: Ti said at the performance meeting that the 12 inch wafer plant rfab2 will be put into operation in Q3 of 2022, and the LFAB Lehi wafer plant will supply output value in Q1 of 2023, and the company will continue to promote the construction of Sherman wafer plant to support the production capacity demand of the company in the next 10-15 years, However, the company did not disclose capacity growth. Previously, the market was worried that the opening of the company’s production capacity will greatly alleviate the shortage of production capacity and increase the competitive pressure in the consumer market. However, we believe that, on the one hand, the ramp up of overseas leading capacity such as Texas Instruments is generally mild, which will not cause significant fluctuations in supply and demand, and from the financial performance over the years, the company’s revenue has maintained a small growth, and pays more attention to the structural optimization of high gross profit markets such as industry and automobile; On the other hand, according to the Q1 market report of Fuchang electronics, the delivery date and price trend of analog chips are still upward, indicating that the prosperity of the industry is still the same, and the Growth Logic of Chinese manufacturers benefiting from domestic substitution is more important than the short-term business cycle. We are optimistic about the long-term rise trend of domestic analog chip manufacturers.
Investment suggestion: the performance guidance of Texas Instruments 2022q1 exceeded expectations, highlighting the continuous high outlook of the simulation industry. In order to pursue high profit margin performance, the company’s R & D and production capacity resources are more inclined to the industrial and automobile markets, which brings a good opportunity for domestic analog chip manufacturers to catch up and replace. It is recommended to pay attention to Sg Micro Corp(300661) , 3Peak Incorporated(688536) , Shanghai Awinic Technology Co.Ltd(688798) , Shanghai Bright Power Semiconductor Co.Ltd(688368) , Wuxi Chipown Micro-Electronics Limited(688508) .
Risk tip: industry boom fluctuation; Risk that R & D and product progress are less than expected
