Event: the electronic sector rose or fell by + 2.7% this week, up or down by + 4.4pct relative to the Shanghai and Shenzhen 300 index. Among them, the semiconductor sector rebounded in an all-round way (semiconductor equipment + 8.75%, discrete devices + 8.57%, semiconductor materials + 5.33%, integrated circuits + 4.40%), and the sub sectors of consumer electronic equipment, passive components and automotive electronics also showed strong performance (consumer electronic equipment + 3.66%, other electronic components III + 3.64%, passive elements + 3.34%).
Cause analysis: behind the sharp rise, we think the main reasons are:
1) the valuation has reached a reasonable range: we have counted the pullback range of the semiconductor index in the past five years. Specifically, the largest pullback in the history of the semiconductor sector occurred in the second half of 2018, with a maximum decline of 45%, while the other five large pullbacks were about 25% to 30%. As of the closing on February 22, the semiconductor index has fallen by 27.80% since its historical high, the valuation has been fully corrected, and the bottom feature is obvious. Taking Naura Technology Group Co.Ltd(002371) as an example, the market value of the company was 72.5 billion before the market started in 2021, corresponding to 8 times of PS in that year; At the bottom of the early stage, the market value was only 131.5 billion, corresponding to only 9 times of PS in 22 years. (using Minsheng electronic performance forecast).
2) the prosperity is still good: we released the report "Infineon price rise tips, seize the opportunity of power counterattack" in the early stage, suggesting that the prosperity of power semiconductors is still behind the price rise of Infineon. At the same time, through our high-frequency database, we can also see that the channel price of MCU has also rebounded recently. Among them, the agent quotation of stm8s003f3p6 MCU has rebounded from the low of $2.1 in November 21 to the current $6. The reason is that we have put forward in the early strategy report that the shipping has warmed up before and after Christmas, and many white label manufacturers and cross-border e-commerce began to prepare for the Christmas season, so the MCU price stabilized at the end of December 21. After the Spring Festival, demand is expected to recover again. On the whole, the current semiconductor boom is still good, and the Q1 performance of many companies in 22 years is also worth looking forward to. The sustainability of the rebound of the sector driven by the performance is guaranteed.
Outlook: we are optimistic about the sustainability of the sector rebound. In the short term, the performance of the first quarterly report is catalytic; In the medium and long term, the automotive electronics high-profile track has a huge space for domestic substitution of semiconductors, and continues to emphasize the three main investment lines of "electrification, intelligence and localization".
1) Electrification: Infineon's price rise prompt to seize the opportunity of counter attack. Infineon recently issued a notice to dealers that due to the short supply in the market and the increase of upstream costs, Infineon may be brewing a new round of price increase. We have repeatedly stressed that due to the continuous rising demand for new energy vehicles and photovoltaic wind power, the supply shortage trend of power semiconductor industry will continue, especially the 22-year tension trend of IGBT and medium and high voltage MOS is difficult to improve.
The wave of automobile electrification continues, the supply of distributed photovoltaic inverters is tight, and power semiconductor manufacturers usher in a dividend period. The delivery of new energy vehicles made a "good start" in January. Byd Company Limited(002594) , Xiaopeng, ideal, Nezha, etc. welcomed a year-on-year increase of 1-4 times. In addition, the target sales volume of new car manufacturers doubled in 22 years, and the wave of electrification continued. At the same time, taking advantage of the whole county to promote the east wind, distributed photovoltaic is ushering in a rapid expansion, with a new installed capacity of 40-45gw in 22 years. In addition to bringing IGBT demand, automobile electrification and photovoltaic inverter also promote the large-scale production of MOSFET and other devices, and domestic power manufacturers usher in a bonus period.
Domestic substitution is the hardest logic for the development of power semiconductor industry. Pay attention to the following major changes: 1) the product structure of power semiconductor manufacturers is rapidly upgraded, and the proportion of high-end power devices represented by IGBT and SiC in the revenue structure continues to increase; 2) More advanced production lines from 6 inches to 8 inches and then to 12 inches will boost the improvement of process level and product capacity; 3) With the outbreak of new energy vehicles and photovoltaic, the downstream structure of domestic manufacturers' terminals is continuously optimized, which not only helps to improve the level of profit margin, but also helps to make profits more stable.
The market of electrified IGBT is first, and the undervalued value of PCB is prominent. Under the wave of electric intelligence, the value of PCB for new energy vehicles has also increased significantly. The upgrading of electric drive, electronic control and intelligent cockpit promotes the demand for HDI. Millimeter wave radar drives the increase in the consumption of high-frequency PCB. The trend of using soft board to replace wire harness for CCS cover sector of automobile battery also deserves attention; Superimposed with the profit improvement expectation brought by the decline of upstream costs, the undervalued value of PCB in 2022 is highlighted.
It is suggested to pay attention to: Power Semiconductors - Hangzhou Silan Microelectronics Co.Ltd(600460) , Zhuzhou Crrc Times Electric Co.Ltd(688187) , Starpower Semiconductor Ltd(603290) , Wingtech Technology Co.Ltd(600745) , Wuxi Nce Power Co.Ltd(605111) , Dongwei semiconductors, Yangzhou Yangjie Electronic Technology Co.Ltd(300373) ; Silicon carbide track - Tianyue advanced, Phenix Optical Company Limited(600071) , Sanan Optoelectronics Co.Ltd(600703) ; PCB - Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Olympic Circuit Technology Co.Ltd(603920) , Shenzhen Kinwong Electronic Co.Ltd(603228) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) , Jinlu electronics, etc.
2) intellectualization: automotive electronics are fully reversed, and the attack horn is loud and clear. 22 is the year of intelligent landing. The hardware layer firmly grasps the two main tracks of on-board camera (strong certainty) and lidar (high explosive force). Automobile acoustics, on-board display and connectors also deserve attention. In terms of intelligent semiconductors, we focus on the opportunities of domestic manufacturers such as sensing layer CIS, intelligent cockpit SOC, storage, MCU and analog chips.
The quantity and price of vehicle optics rise together, the golden track, lidar, stars and the sea. The penetration rate of car cameras increased + the number of single cars increased + ASP improved three-dimensional resonance; The turning point of the lidar industry has come. In the first year of mass production in 2022, the star sea market has a long-term space of 100 billion, and is expected to grow a large number of domestic supply chain manufacturers.
It is suggested to pay attention to: manufacturers with competitive advantages of camera module / lens - Lianchuang Electronic Technology Co.Ltd(002036) , sunny optics, etc; Lidar - torch technology, Ningbo Yong Xin Optics Co.Ltd(603297) , Zhejiang Crystal-Optech Co.Ltd(002273) , Zhejiang Lante Optics Co.Ltd(688127) , etc.
Intelligence drives the increase of semiconductor demand, and domestic manufacturers such as CIS, storage, MCU and analog IC welcome the opportunity. In addition to the increasing demand for the main control chips such as automatic driving core AI chip and intelligent cockpit SOC, the wave of automotive intelligence has ushered in important opportunities for domestic manufacturers in the field of general chips such as automotive storage, MCU and analog IC.
It is suggested to pay attention to: cis - Will Semiconductor Co.Ltd.Shanghai(603501) , China Wafer Level Csp Co.Ltd(603005) , Shanghai Fullhan Microelectronics Co.Ltd(300613) , sitway (to be listed), etc; Intelligent cockpit SOC - Amlogic (Shanghai) Co.Ltd(688099) , Rockchip Electronics Co.Ltd(603893) etc; Automobile storage - Ingenic Semiconductor Co.Ltd(300223) , Gigadevice Semiconductor (Beijing) Inc(603986) , Giantec Semiconductor Corporation(688123) , etc; Automobile MCU - Gigadevice Semiconductor (Beijing) Inc(603986) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Will Semiconductor Co.Ltd.Shanghai(603501) , Sino Wealth Electronic Ltd(300327) , Ninestar Corporation(002180) (polar semiconductor), etc.
3) localization: there is a great opportunity for domestic substitution of semiconductor equipment + materials, and the cost performance of IC design company is prominent. The capital expenditure of wafer factories and IDM continues to increase, and the acceleration of domestic substitution is superimposed. The equipment and materials usher in a great opportunity of domestic substitution.
At the same time, under the deep correction, the 22-year valuation center of some high-quality IC design companies returned to the 30x-40x range, and the investment cost performance was highlighted under the condition of high performance certainty.
Semiconductor equipment: the supply of overseas leading enterprises is limited, the localization is accelerated, and the high capital expenditure of wafer factories shows the scenery. The downstream demand outlook of overseas equipment leaders is optimistic. Factors such as the spread of the epidemic and the delay in the delivery of upstream parts restrict the performance release of Fanlin and other overseas equipment companies. Application materials are also optimistic about the prospects in 2022 and beyond. The company has a large backlog of orders of about $8 billion, and the production capacity in 2022 is nearly sold out. In addition, downstream Fabs have given high capital expenditure guidelines: TSMC expects capital expenditure to be US $40-44 billion in 2022, a year-on-year increase of 33-46%, and liandian expects capital expenditure to reach US $3 billion in 22 years, a year-on-year increase of 67% Semiconductor Manufacturing International Corporation(688981) it is estimated that the capital expenditure will be 5 billion yuan in 2022, and the projects in Beijing and Shenzhen will be put into operation in 2022. Under the environment of limited overseas leading supply and vigorous growth of downstream demand, domestic equipment companies can expect 22-year high growth.
It is suggested to pay attention to: Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , shengmei Shanghai, Kingsemi Co.Ltd(688037) , Shanghai Wanye Enterprises Co.Ltd(600641) , Pnc Process Systems Co.Ltd(603690) , Konfoong Materials International Co.Ltd(300666) , etc.
Semiconductor materials: the upstream cost has improved significantly, and the performance is expected to exceed expectations. In the early stage, due to the impact of power and production restriction, the price of upstream chemical raw materials in 21q2 / Q3 began to rise sharply, and some varieties even doubled or more. However, since October, with the promotion of policy regulation, the price of upstream raw materials has returned or is close to returning to the normal level. It is expected that the performance of 21q4 and 22q1 of semiconductor materials companies has improved significantly month on month and is expected to continue to exceed expectations. The accelerated expansion of overlay Fabs has greatly increased the demand for domestic semiconductor materials. We continue to be optimistic about the substitution opportunities of domestic semiconductor materials companies.
Suggestions: semiconductor silicon wafers - National Silicon Industry Group Co.Ltd(688126) , Hangzhou Lion Electronics Co.Ltd(605358) , Tianjin Zhonghuan Semiconductor Co.Ltd(002129) , Thinkon Semiconductor Jinzhou Corp(688233) , etc; Special gas, photoresist, CMP, etc. - Jiangsu Yoke Technology Co.Ltd(002409) , Guangdong Huate Gas Co.Ltd(688268) , Suzhou Jinhong Gas Co.Ltd(688106) , Red Avenue New Materials Group Co.Ltd(603650) , Hubei Dinglong Co.Ltd(300054) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) etc.
Semiconductor design: grasp the incremental demand market and transfer from business cycle to growth cycle. We have repeatedly stressed in the early stage that we should pay more attention to the incremental demand for new energy vehicles and IOT than the traditional demand for mobile phones and PCs. although the cliff like shortage in the early stage has been alleviated, the structural shortage in the incremental track still exists. We have long been optimistic about IC design companies with endogenous growth ability, which can complete the transfer from business cycle to growth cycle through product iterative upgrading. Among them, the investment opportunity of Analog IC is particularly emphasized. We believe that the subdivision track has long-term and steady growth and shares 8-inch capacity with power, so the prosperity is highly sustainable. In the early stage, the market was worried about ti's expansion of production, but we believe that it will take time for TI's production capacity to open, and the willingness of Chinese manufacturers to switch back to Ti after completing domestic substitution is very low. Therefore, the short, medium and long-term performance is guaranteed.
Suggestions: analog chips - Sg Micro Corp(300661) , 3Peak Incorporated(688536) , Shanghai Awinic Technology Co.Ltd(688798) , Wuxi Chipown Micro-Electronics Limited(688508) , Shanghai Bright Power Semiconductor Co.Ltd(688368) , xidiwei, etc.
Investment suggestions: continue to emphasize the three main investment lines of "electrification, intelligence and localization". It is suggested to pay attention to: Electrification: power semiconductor - Hangzhou Silan Microelectronics Co.Ltd(600460) , Zhuzhou Crrc Times Electric Co.Ltd(688187) , Starpower Semiconductor Ltd(603290) , Wingtech Technology Co.Ltd(600745) , Wuxi Nce Power Co.Ltd(605111) , Dongwei semiconductor, Yangzhou Yangjie Electronic Technology Co.Ltd(300373) ; Silicon carbide track - Tianyue advanced, Phenix Optical Company Limited(600071) , Sanan Optoelectronics Co.Ltd(600703) ; PCB - Wus Printed Circuit (Kunshan) Co.Ltd(002463) , Olympic Circuit Technology Co.Ltd(603920) , Shenzhen Kinwong Electronic Co.Ltd(603228) , Suzhou Dongshan Precision Manufacturing Co.Ltd(002384) , Jinlu electronics, etc.
Intellectualization: manufacturers with competitive advantages of camera module / lens - Lianchuang Electronic Technology Co.Ltd(002036) , sunny optics, etc; Lidar - torch technology, Ningbo Yong Xin Optics Co.Ltd(603297) , Zhejiang Crystal-Optech Co.Ltd(002273) , Zhejiang Lante Optics Co.Ltd(688127) , etc; Cis - Will Semiconductor Co.Ltd.Shanghai(603501) , China Wafer Level Csp Co.Ltd(603005) , Shanghai Fullhan Microelectronics Co.Ltd(300613) , sitway, etc; Intelligent cockpit SOC - Amlogic (Shanghai) Co.Ltd(688099) , Rockchip Electronics Co.Ltd(603893) etc; Automobile storage - Ingenic Semiconductor Co.Ltd(300223) , Gigadevice Semiconductor (Beijing) Inc(603986) , Giantec Semiconductor Corporation(688123) , etc; Automobile MCU - Gigadevice Semiconductor (Beijing) Inc(603986) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Will Semiconductor Co.Ltd.Shanghai(603501) , Sino Wealth Electronic Ltd(300327) , Ninestar Corporation(002180) (polar semiconductor), etc.
Localization: semiconductor equipment - Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , shengmei Shanghai, Kingsemi Co.Ltd(688037) , Shanghai Wanye Enterprises Co.Ltd(600641) , Pnc Process Systems Co.Ltd(603690) , Konfoong Materials International Co.Ltd(300666) , etc; The material of semiconductor materials of National Silicon Industry Group Co.Ltd(688126) \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\ Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) etc; Analog chip - Sg Micro Corp(300661) , 3Peak Incorporated(688536) , Shanghai Awinic Technology Co.Ltd(688798) , Wuxi Chipown Micro-Electronics Limited(688508) , Shanghai Bright Power Semiconductor Co.Ltd(688368) , xidiwei, etc.
Risk warning: the downstream demand of the electronic industry is less than expected; The expansion progress of the wafer factory is less than expected; The R & D Progress of listed companies is less than expected.
