The boom in the electronics industry continued. In the first half of 2021, the electronics industry index was sharply corrected due to the impact of the macro environment. In the second half of the year, the epidemic deepened the contradiction between supply and demand, led to the strengthening of the prosperity of upstream chips, equipment, materials, some components and other links, greatly improved the performance, and the industry index significantly outperformed the market. The demand increment brought by the technology upgrading in the Internet of things era and the localization substitution under the opportunity of reshaping the global industrial pattern are the long-term constant logic of the electronic industry. In 2022, the emerging demand driving effect will gradually replace the epidemic catalytic effect, and the unexpected demand of downstream emerging applications will become the focus of the electronic industry.
Semiconductor: cycle and growth resonate, and high prosperity continues. Chip demand is still strong, and it is difficult to release new capacity in the short term. It is expected that the semiconductor industry as a whole is expected to maintain a moderate growth trend in 2022. Domestic semiconductor equipment basically meets the mature process nodes, and the localization rate has increased rapidly, benefiting from the increased capital expenditure of the wafer factory, ushering in a good opportunity for development. Most applications of power and analog semiconductors are mature processes, and the expansion of downstream new energy, smart grid and rail transit applications will directly drive the rapid opening of their market space.
Mini led: getting better in 2021 and breaking out in 2022. Mini LED has become a new display track, and the backlight and direct display market space are turned on in both directions. Apple’s iPad Pro equipped with mini LED backlight technology leads the new climate of mini led, and upstream and midstream manufacturers have increased their layout. With the technology gradually sinking into the medium and high-end market, the mini led outbreak is imminent in 2022. China’s leading led enterprises are expected to take over from Taiwan manufacturers to share the bonus of mini led capacity demand.
Automotive electronics: the upgrading and transformation of the automotive industry has accelerated the penetration of electronic products. Electrification, intelligence and networking will accelerate the penetration of various electronic products such as power, computing, storage, sensing and display in automobiles, and create a broad domestic alternative space for Chinese enterprises. With the strengthening of automobile electronization, profound changes have taken place in the industrial pattern, and the settlement of consumer electronics and semiconductor manufacturers compete with traditional automobile enterprises, China’s industrial status has also improved.
Maintain the rating of “stronger than the market”. Guided by the long-term logic of technological innovation and localization substitution, and considering the reality of the intersection, resonance and succession of the two phased effects of epidemic catalysis and emerging demand, we grasp the investment logic of the electronics industry in 2022 from the top-down and bottom-up dimensions of the industrial chain: 1) grasp the upstream high-quality track from the perspective of tight production capacity and localization substitution, Focus on high-quality tracks such as power, simulation and equipment in the semiconductor field, and relevant stocks include Wuxi Nce Power Co.Ltd(605111) , Hangzhou Silan Microelectronics Co.Ltd(600460) , 3Peak Incorporated(688536) , Sg Micro Corp(300661) ; 2) Grasp the new market demand from the perspective of downstream innovation drive, and focus on the highly deterministic Mini led field. Relevant stocks include Sanan Optoelectronics Co.Ltd(600703) and the field of automotive electronics that has changed to consumer electronics and developed beyond market expectations. Relevant stocks include Lens Technology Co.Ltd(300433) .
Risk tips: macroeconomic fluctuations, lower downstream demand than expected, localization substitution less than expected, etc.
