As the semiconductor business cycle continues, the industry will achieve the third consecutive year of growth in 2022. Driven by digital economy intelligent applications such as automobile, server, Internet of things and 5g, the super boom cycle of semiconductor market since 2019 is expected to last for three years. In terms of downstream applications, the edge side calculation is a rising star, and the data center and automobile will lead the industry growth with a high growth rate.
Platform expansion is king. By combing the growth paths of NVIDIA, Ti and Broadcom, the three major U.S. stock companies, we explore the way for A-share semiconductor companies to become bigger and stronger. Previously, we continued to emphasize that the essence of science and technology enterprises lies in innovation. Over the past five years, we have focused on the expansion and growth of science and technology enterprises relying on science and technology dividends. The research on effective R & D investment and effective R & D output value can effectively and prospectively judge the growth direction, speed and space of enterprises.
Up to now, Chinese mainland has already had a group of companies represented by Will Semiconductor Co.Ltd.Shanghai(603501) , Gigadevice Semiconductor (Beijing) Inc(603986) , Maxscend Microelectronics Company Limited(300782) , Unigroup Guoxin Microelectronics Co.Ltd(002049) and so on, with a market value exceeding 100 billion, and a group of companies represented by Montage Technology Co.Ltd(688008) , Sg Micro Corp(300661) and 3Peak Incorporated(688536) has a market value exceeding 50 billion, and a considerable number of companies have a market capitalization of 300-500 billion. In 2021, benefiting from the industry boom cycle, companies with “shortage and price increase” will increase relatively higher. In the next stage, we believe that the investment focus of semiconductor design will shift from price factors to the platform expansion of the enterprise itself, and we are optimistic about the rise of platform leaders!
With the continuous expansion of mature processes and the continuous improvement of autonomy, equipment and materials will still be the strong main line in 2022. In 2020, Chinese mainland became the largest semiconductor equipment market in the world. According to semi, the mainland equipment market accounted for less than 10% of the global market before 2013, increased to 10 ~ 20% from 2014 to 2017, and remained above 20% after 2018, with an upward trend year by year. In 2020, China invested in the construction of wafer factories and increased investment in the semiconductor industry. The scale of the mainland semiconductor equipment market ranked first in the world for the first time, reaching US $18.1 billion, a year-on-year increase of 35.1%, accounting for 26.2%. The mainland equipment market is still expected to grow further. The localization rate of mainland manufacturers is currently low, and the share is expected to increase rapidly.
The progress of domestic materials is rapid and the growth rate is huge. The progress of localization remains to be seen. Below we excerpt the electronic material revenue of some electronic semiconductor material manufacturers. In a comprehensive view, the revenue of the following semiconductor material manufacturers showed explosive growth by the first half of 2021 (or 21q3). We believe that this is the result of the accumulation of technologies and processes in China’s semiconductor material industry, the promotion of downstream production expansion and the acceleration of localization, which helps the vigorous development of various manufacturers in China’s semiconductor material industry.
We judge that vehicle specification level breakthrough is the most important direction of A-share semiconductor competition in the future. In 2021, more and more semiconductor companies launched vehicle specification level new products or achieved large-scale volume and share improvement in the downstream. The “vehicle content” of Chinese semiconductor companies is expected to be further improved in 2022. Among them, the three categories of sensory storage + power semiconductors are the main battlefield for domestic companies to break through.
Risk tips: the R & D of new products is less than expected, the downstream demand is less than expected, the progress of domestic substitution of semiconductor equipment and materials is less than expected, and China US science and technology friction.
