Industry perspective
The prosperity of the semiconductor industry continues, and the capital expenditure of the wafer factory enters the peak period: the semiconductor industry has started the upward cycle of prosperity since the second half of 2019. In the second half of 2020, the production capacity is in short supply, superimposed with the strong demand for medium and long-term automatic driving, AI and HPC, and the production capacity of the wafer factory has expanded significantly. According to semi, it is estimated that the global sales of equipment will reach US $103 billion in 2021, with a year-on-year increase of 45% and a year-on-year increase of 11% in 2022. At present, the world’s major semiconductor enterprises have raised capital expenditure to stimulate the demand for semiconductor equipment. According to Gartner, the capital expenditure of global chip manufacturing industry will reach US $146 billion in 2021, with a year-on-year increase of 30%. TSMC guided us $100 billion in high-intensity capital expenditure in the next three years in early 2021. We think there is even a chance to increase it, and the semiconductor equipment sector will benefit first.
We estimate that the 12 / 8-inch potential expansion capacity of domestic wafer factories in mainland China is 1.2 million / 420000 pieces / month. It is expected that the corresponding equipment demand will increase by 61% / 25% / 6% in 2021-23. According to the public information of company announcement and official website, the Chinese mainland 12 inch wafer fab has 1 million 900 thousand target / month production capacity, and the potential capacity expansion is 1 million 200 thousand units / month. It is expected that the new capacity in the 2022-23 year will reach 34.5/37.5 million per month, up by 29%/9% over the same period last year. The 8-inch planning target is 1.37 million pieces / month, and the potential production capacity is 420000 pieces / month. It is expected to add 215.5/11000 pieces / month respectively in 2022-23. According to the different capital expenditure corresponding to different processes of each production line, we estimate that the capital expenditure of 12 inch mainland funded wafer factories in 2021-23 is 110.3/139.2/157.2 billion yuan and 8 inch 150 / 172 / 88 billion yuan. 80% of the general capital expenditure is used for equipment purchase. We estimate that the equipment scale required by domestic wafer factories in mainland China will be 100.2/125.1/132.8 billion yuan in 2021-23, with a year-on-year increase of 61% / 25% / 6%.
Domestic semiconductor front channel equipment accounted for only 7% in China in 2020, and the domestic penetration rate continued to increase. According to xinmou research, in 2020, the equipment purchased by Chinese wafer factories from the United States accounted for more than 50%, Japan 17%, the Netherlands 16% and China 7%. From the international bidding network, we counted the relevant bidding and winning announcements publicly issued by the three wafer factories of Changjiang storage, Huali micro and Huahong Wuxi from 2016 to the end of November 2021, Equipment localization rate 16% / 15% / 13% respectively (according to the proportion of quantity). The penetration rate of bidding quantity of domestic manufacturers is increasing year by year, and Changjiang storage is increasing from 5% in 2017 to nearly 20% in 2021. According to the type of equipment, the localization rate in the fields of degumming, cleaning, heat treatment, etching and chemical mechanical polishing can reach more than 20%, while that in the fields of film deposition, process control, ion implantation and lithography can reach more than 20% The conversion rate is low.
The equipment industry continues to develop horizontally and vertically, and the localization rate of semiconductor equipment parts is expected to increase. On the one hand, the localization of equipment has changed from the original single replacement and long verification cycle to the whole link cooperation in manufacturing, design and equipment; On the other hand, equipment manufacturers are actively managing the supply chain and promoting the localization of parts and components, which gives domestic parts and components the opportunity to grow rapidly. It is recommended to pay attention to Shanghai Wanye Enterprises Co.Ltd(600641) , Kunshan Kinglai Hygienic Materials Co.Ltd(300260) , Konfoong Materials International Co.Ltd(300666) and other parts related manufacturers.
Investment advice
Recommended targets: Naura Technology Group Co.Ltd(002371) – China’s semiconductor equipment platform leader, ICP etching / PVD / heat treatment / cleaning equipment, Advanced Micro-Fabrication Equipment Inc.China(688012) – CCP etching and MOCVD leader, expand CVD / measurement equipment, shengmei Shanghai – cleaning equipment leader, expand electroplating / wet packaging and furnace tube equipment, Pnc Process Systems Co.Ltd(603690) – high purity process system & cleaning equipment, Beijing Huafeng Test & Control Technology Co.Ltd(688200) – post test machine.
Risk statement
The downstream prosperity of semiconductor is less persistent than expected; The import of parts and components is affected by trade friction; Under the influence of Sino US relations, the United States further strengthened the sanctions on Chinese wafer factories; The technological breakthrough of local equipment manufacturers was less than expected.
