Core view
The scale of China’s integrated circuit industry has grown steadily. From 2012 to 2021, the scale of China’s integrated circuit industry grew steadily. China’s imports of integrated circuits increased from 241.82 billion in 2012 to 635.48 billion in 2021, an increase of 162.79%; The number of exports increased from 118.21 billion in 2012 to 310.7 billion in 2021, an increase of 162.84%.
The trade deficit is large, and high-end chips are mainly imported. China’s integrated circuit industry has a large market space, and chips have long relied on imports. From 2012 to 2021, the import and export volume of China’s integrated circuit market increased steadily. Among them, in 2021, the import amount of China’s integrated circuits reached a new high, reaching 432.5 billion US dollars; An increase of 19.46% year-on-year, also the highest level in history.
The gap between import and export has narrowed, and medium and high-end chips have been made in China. China’s integrated circuit import ASP has remained at the level of US $0.64-0.75/piece since 2017. However, the export growth rate of ASP is relatively large, from US $0.33/piece in 2017 to US $0.49/piece in 2021. Among them, in 2018, China’s integrated circuit import ASP was US $0.75/piece, the highest value since 2015, which was caused by China’s accelerated hoarding of high-end chips in the Sino US trade war. At present, the chips independently manufactured in China are mainly low-end chips such as analog and discrete devices, while high-end chips such as logic and storage are mainly imported. The ASP price difference between China’s IC import and export decreased significantly, indicating that the domestic level of medium and high-end chips has improved.
There is a serious mismatch between supply and demand in the chip manufacturing industry, and Chinese manufacturers encounter a good opportunity for development. The 2022 capital expenditure of head manufacturers such as TSMC and Samsung is used to expand the production capacity of advanced processes. However, the top three chip types with capacity shortage are mature processes. The shortage of mature process chips and the serious mismatch between supply and demand provide opportunities for the development of Chinese chip manufacturers. According to Semiconductor Manufacturing International Corporation(688981) 2021q4 performance press conference, the company’s revenue in 2021 increased by 39% year-on-year. Thanks to the layout of mature processes, the revenue growth of Semiconductor Manufacturing International Corporation(688981) in 2021 exceeded that of TSMC.
The market of electronic sector is weaker than the market. From February 7 to February 11, the Shanghai stock index rose 3.02%, and CITIC electronics fell 3.20%, underperforming the market by 6.22 percentage points. Since the beginning of the year, the CITIC electronic index has lost 11.37%, with a big loss of 23.4% in the previous session.
The growth rate of various electronic sub sectors. From February 7 to February 11, only the panel industry in the electronic segment had positive earnings, up 3.07%. Year to date, the electronic industry segments are negative returns.
Individual stocks rose and fell: A shares. From February 7 to February 11, the top five companies in the electronics industry were Xiamen Xindeco Ltd(000701) , Hebei Sinopack Electronic Technology Co.Ltd(003031) , Szzt Electronics Co.Ltd(002197) , Hitevision Co.Ltd(002955) and Suzhou Ta&A Ultra Clean Technology Co.Ltd(300390) , up 37.70%, 30.86%, 30.27%, 12.40% and 10.49% respectively.
Investment advice
It is recommended to pay attention to Huahong semiconductor, Focus Lightings Tech Co.Ltd(300708) , Starpower Semiconductor Ltd(603290) , Hubei Dinglong Co.Ltd(300054) , Konfoong Materials International Co.Ltd(300666) .
Risk tips
The downstream demand is lower than expected, the industry competition is intensified, and the chip manufacturing capacity is overcapacity.
