Since the end of 2021, the A-share market has generally fallen by 20-30%. After the semiconductor industry has fallen sharply with the market, its value has become prominent. We held a teleconference “sorting out investment opportunities in the semiconductor industry” on February 23, 2022
Fully optimistic about the semiconductor sector. The market rebounded sharply on March 9, 2022. We continue to emphasize the investment opportunities of the semiconductor industry and select the targets with high growth in the medium and short term, huge long-term space and determined pattern. The main views are as follows:
The semiconductor industry is the main investment axis of the future science and technology industry. Under the big country game between China and the United States G2, looking forward to the future, we believe that the wave of domestic substitution and innovation will be an important driving force for China’s semiconductor industry in the future. (1) Domestic substitution:
As the United States continues to suppress Chinese enterprises such as Huawei, ZTE and Semiconductor Manufacturing International Corporation(688981) etc., Chinese technology enterprises led by Huawei are gradually promoting domestic substitution in the semiconductor supply chain. (2) Intelligent Innovation: the next 5g era will be the era of intelligence of all things. 5g + aicde will stimulate a large amount of application space of industrial Internet. New energy such as smart cars, wind and solar power storage, Internet of things and VraR have a huge demand for semiconductors.
1. Power semiconductor: we believe that the prosperity of power semiconductor sector will continue in 2022. Although the shortage of consumer MOSFET has eased, the demand for high-end power devices such as high-voltage MOSFET and IGBT in the fields of industrial control, new energy vehicles and photovoltaic inverter is still strong, and the supply of related products is in short supply. China Shanxi Guoxin Energy Corporation Limited(600617) vehicle IGBT market and global photovoltaic IGBT market have huge growth space. It is recommended to pay attention to power failure:
Starpower Semiconductor Ltd(603290) , Wuxi Nce Power Co.Ltd(605111) etc; And power IDM: Yangzhou Yangjie Electronic Technology Co.Ltd(300373) , Hangzhou Silan Microelectronics Co.Ltd(600460) , Wingtech Technology Co.Ltd(600745) , Zhuzhou Crrc Times Electric Co.Ltd(688187) , etc.
2. Semiconductor design: (1) ddr5 industrial chain: ddr5 penetration rate continues, industrial chain companies grow year-on-year and month on month. It is recommended to pay attention to Montage Technology Co.Ltd(688008) , Giantec Semiconductor Corporation(688123) ; (2) Simulation: there is a huge space for domestic substitution, and some enterprises have strong access to global major customers. It is recommended to pay attention to Sg Micro Corp(300661) , Wuxi Etek Microelectronics Co.Ltd(688601) ; (3) Special IC: the industry continues to be booming, so it is recommended to pay attention to Unigroup Guoxin Microelectronics Co.Ltd(002049) ; (4) CIS: the mobile phone business has been improved. There is a huge space for automotive CIS. Tddi and DDIC can expect high growth in 2022. At present, the market value is underestimated. It is recommended to pay attention to Will Semiconductor Co.Ltd.Shanghai(603501) . (5) Logic: it is suggested to focus on Amlogic (Shanghai) Co.Ltd(688099) , Gigadevice Semiconductor (Beijing) Inc(603986) , Sino Wealth Electronic Ltd(300327) , etc.
3. Semiconductor equipment: in 2022, the capital development support of China’s wafer factories continued to rise, and the production capacity expanded steadily. It is still in the business cycle. It is optimistic about the domestic replacement logic of semiconductor equipment and long-term high-quality track in the medium and long term. At present, the semiconductor equipment and materials sector is in the lower quartile of valuation. It is suggested to pay attention to: Naura Technology Group Co.Ltd(002371) , Kingsemi Co.Ltd(688037) , Pnc Process Systems Co.Ltd(603690) , Advanced Micro-Fabrication Equipment Inc.China(688012) , shengmei Shanghai, Beijing Huafeng Test & Control Technology Co.Ltd(688200) , Hangzhou Chang Chuan Technology Co.Ltd(300604) , etc.
4. Semiconductor materials: some domestic semiconductor materials companies have completed the leap of 0-1, and will gradually enter the large-scale stage of 1-N in 2022. We expect that the speed of domestic substitution will continue to accelerate. The supply of silicon wafers in China has gradually increased from 8 inches of prosperity to 8 inches of poor demand; The core suppliers of CMP polishing pads are all American enterprises. There is a strong demand for domestic substitution, and advanced technology will drive the rapid growth of the industry. With the improvement of Chinese wafer factories and IDM process, the market demand for domestic CMP polishing pads is broad; China’s leading precursor has fully entered the world’s top ten semiconductor enterprises. It is suggested to pay attention to Thinkon Semiconductor Jinzhou Corp(688233) , Anji Microelectronics Technology (Shanghai) Co.Ltd(688019) , Jiangyin Jianghua Microelectronics Materials Co.Ltd(603078) , Jiangsu Yoke Technology Co.Ltd(002409) , Hubei Dinglong Co.Ltd(300054) , etc.
5. Wafer Foundry: Semiconductor Manufacturing International Corporation(688981) announced the operating data from January to February 2022 on March 8. The group’s revenue was US $1223 million, a year-on-year increase of 59%; The net profit attributable to the parent company was US $309 million, a year-on-year increase of 95%; Exceeding market expectations.
In the early stage, the company predicted that the revenue of 22q1 increased by 15% – 17% month on month, corresponding to US $1.82-2.12 billion, and the gross profit margin was 36% – 38%. We take a positive view of the growth trend of wafer foundry 22q1 and 2022. The global foundry capacity continues to be tight, and there is still room for price increase in 2022. Under the background of self-control, China’s wafer foundry industry has entered a continuous production expansion cycle. Suggested attention: Semiconductor Manufacturing International Corporation(688981) (H), Huahong semiconductor (H).
Risk analysis: the progress of localization is less than expected, the expansion of Wafer Factory is less than expected, and the technology research and development is less than expected.
