Key investment points:
Market review: from January 1, 2022 to February 14, 2022, Shenwan Semiconductor Index rose or fell by - 18.11%, significantly weaker than the major indexes. Among the fine molecular sectors, the decline of integrated circuit manufacturing was small, which was - 4.86%. From the perspective of overall valuation level, the overall valuation PE of Shenwan semiconductor sector is 55.77 times, and the valuation is in the last 23.80% of the history; The PE estimated by median method is 67.24 times, which is 36.40% after the history.
Demand side: the shortage of supply chain is alleviated, and PC / mobile terminals will move towards the stock market in 2022. From the monthly revenue of IC design company and the tracking of third-party data, the demand pull of the epidemic on consumer electronics / PC gradually weakened, and entered the stock market stage in 2022. Server shipments have maintained a high growth rate month on month, and major overseas cloud computing manufacturers are taking practical actions for metauniverse. BMC service provider Xinhua's revenue in January increased by 3.74% month on month regardless of seasonal factors, and the demand for cloud computing is still strong. Looking forward to next year, overseas cloud manufacturers have a positive outlook on capital investment. Meta (Facebook) expects the growth rate of capital expenditure to exceed 50% in 2022, and Dell'Oro expects the global data center capital expenditure to increase by 17%. The new generation servers sapphirerapids and amdepyc milan-x launched by Intel and AMD, the server CPU suppliers, have been greatly improved compared with the previous generation products. AI, unmanned applications, metauniverse and cloud excellence will drive the growth of underlying hardware devices.
Wafer foundry and semiconductor equipment: in the first half of the year, the production capacity was limited, the capital expenditure was not greatly affected by regulation, and the industry turned to structural shortage. The capacity of the wafer foundry side maintained a high level of operation. The capacity utilization rate of the main foundry was close to or more than 100%, and the discounts were successively cancelled and the wafer quotation was increased. Looking forward to the capacity release of major wafer foundries in 2022, the capacity expansion rate of overseas liandian, lijidian and world advanced 2022h1 is about 10000 pieces, ranging from 7% to 10%. It is expected that semiconductors will be in short supply at least before the first half of next year, and large-scale capacity release will have to wait until 2023. The Semiconductor Manufacturing International Corporation(688981) capital expenditure in 2021 is about US $4.5 billion, including US $2.13 billion in 2021q4, which is close to 50% of the whole year. It is estimated that the capital expenditure in 2022 will be about US $5 billion (the delivery date of equipment has been considered), and the capacity increment is higher than that of last year. Huahong semiconductor is expected to complete the capacity expansion of about 30000 pieces by the end of 2022. It shows that in the field of mature process, China's main wafer foundry is not affected by regulation, and its production expansion plan is still advancing steadily. Corresponding to the revenue recognition policy of semiconductor equipment, the revenue from winning the bid of some semiconductor enterprises is expected to be deferred to the first half of 2022.
Investment suggestion: worry about the persistence of performance and the spread of external friction, and focus on the targets that have benefited from the improvement of domestic penetration for a long time and the prosperity of subdivided fields in the future. With the gradual improvement of capacity mismatch, the demand for downstream products is differentiated, and the market is worried about the persistence of overvalued value and performance after expansion. The capital expenditure planning and bidding of Semiconductor Manufacturing International Corporation(688981) and Huahong semiconductor partially alleviated market doubts. We maintain the rating of "leading market" in the industry. Looking ahead, we expect: 1 Semiconductor equipment manufacturers under the superposition of "domestic substitution" and "capital expenditure super cycle" still deserve special attention; 2. The demand for servers driven by traffic will continue to grow in 2022. At the same time, server updates at the hardware level and windows11 launched six years later will also bring innovation opportunities. It is suggested to pay attention to Montage Technology Co.Ltd(688008) and Giantec Semiconductor Corporation(688123) benefiting from the switching from DDR4 to ddr5; 3. It is suggested to focus on Will Semiconductor Co.Ltd.Shanghai(603501) , Amlogic (Shanghai) Co.Ltd(688099) and Yangzhou Yangjie Electronic Technology Co.Ltd(300373) to benefit from the target of increasing the penetration rate of downstream industries.
Risk tip: trade friction intensifies, demand is lower than expected, and domestic substitution slows down.
