[key investment points]
Semiconductor supply and demand may be in a tight balance, and domestic substitution is at the right time. In 2021, the epidemic situation, natural disasters and other factors affected the supply chain of the global semiconductor industry, resulting in a situation of short supply, and the year-on-year growth rate in a single month showed an inverted U-shape. We believe that as the emergency situation is alleviated, the newly expanded production capacity is gradually climbing, and the tight supply situation may be gradually alleviated. In 2020, the scale of China’s chip market will be US $131 billion, which is expected to increase to US $223 billion by 2025, and the CAGR will be 9.2% from 2020 to 2025. The proportion of Chinese made chips is expected to increase from 15.9% in 2020 to 19.4% in 2025. With China’s increasing attention to the semiconductor industry, the company will continue to develop iterative products or seize the opportunity of domestic substitution.
Materials and equipment: semiconductor manufacturers have increased capital expenditure and full orders. The Chinese mainland chip manufacturers spent $12 billion 240 million on equipment in 2019, and are expected to be reduced to $9 billion 630 million in 2020 by the global semiconductor industry. In 2021, with the gradual recovery of the semiconductor industry, the industry market size in 2024 is expected to increase to 12 billion 840 million US dollars, and 2020-2024 CAGR is expected to be 7.5%. China’s semiconductor materials market is showing a trend of fluctuating growth. The continuous waves in Sino US trade relations have affected some Chinese companies to import American semiconductor equipment. We believe that with the technological breakthrough of domestic semiconductor equipment enterprises, the domestic special equipment industry may flourish, and there may be a breakthrough in domestic semiconductor materials.
Power semiconductor industry: steady market growth, focusing on high-profile segments. From 2018 to 2021, the global and Chinese power semiconductor market scale CAGR is expected to be 4.1% and 4.8%. The top three products in China’s power semiconductor market are power management IC, MOSFET and IGBT. We expect China’s power management IC to maintain low-speed growth. From 2019 to 2022, the IGBT market scale CAGR is 23.8%, with a bright growth performance. In addition, SiC, as an emerging market, with the gradual introduction of new energy vehicle high-voltage platform, or enters the period of accelerated development of the industry.
CIS: it may recover in 2022, and the automobile CIS will continue its high boom. In 2020, the global CIS market scale was US $20.7 billion, with a year-on-year increase of 7.3%. It is expected that the market scale will increase to US $31.5 billion by 2026 and the CAGR will be 7.3% from 2020 to 2026. Yole expects that the market scale will maintain a low growth rate in 2021, mainly due to Huawei’s large procurement of CIS from 2019 to 2020. It is expected that the growth rate of CIS market scale will increase after 2022. The trend of automobile intellectualization is unstoppable. With the increase of automatic driving penetration, there is room for growth of single vehicle equipped with cameras, and the automobile CIS market is waiting for flowers to bloom.
Manufacturing capacity is in short supply, and the prosperity of advanced packaging is improving. In 2021q3, the world’s major wafer foundry continues to be fully loaded, the operating revenue is at a record high, and the gross profit margin remains at a high level. Looking forward to 2022, due to the emerging chip market demand driven by the Internet of things and new energy vehicles, it is expected that the demand side will remain strong, the imbalance between industry supply and demand may continue until the middle and late 2022, and the expansion and landing of wafer manufacturers at home and abroad, According to icinsights, the CAGR of the global wafer manufacturing market from 2020 to 2025 is 11.6%. There is still a large alternative space for localization in the global semiconductor packaging and testing market share. With the development of Moore’s law slowing down, advanced packaging technology is expected to become the key development direction of semiconductor industry in the next stage.
[configuration recommendations]
Investment advice In the direction of automobile electrification and intellectualization, the impact of Sino US trade relations is superimposed, and the demand of semiconductor market is increasing. Domestic semiconductor manufacturers may grasp the good opportunity of domestic substitution and expand their business, including 1) semiconductor manufacturers and packaging and testing manufacturers in the boom cycle of industry expansion, as well as semiconductor material and equipment manufacturers with full orders, are cautiously optimistic about Huahong semiconductor (01347. HK), It is recommended to pay attention to Semiconductor Manufacturing International Corporation(688981) (688981. SH), Jcet Group Co.Ltd(600584) (600584. SH), Naura Technology Group Co.Ltd(002371) (002371. SZ), shengmei Shanghai (688082. SH); 2) The silicon content in the vehicle continues to increase. It is recommended to pay attention to the power semiconductor and CIS sub circuit, be optimistic about Zhuzhou Crrc Times Electric Co.Ltd(688187) (688187. SH), be cautious about Starpower Semiconductor Ltd(603290) (603290. SH), China Resources Microelectronics Limited(688396) (688396. SH), Wuxi Nce Power Co.Ltd(605111) (605111. SH), and pay attention to Hangzhou Silan Microelectronics Co.Ltd(600460) (600460. SH), Tianyue advanced (to be listed, 688234. SH), Will Semiconductor Co.Ltd.Shanghai(603501) (603501. SH), etc.
[risk tips]
The capacity expansion of the wafer factory is less than expected, the penetration rate of new energy vehicles is less than expected, the penetration rate of auxiliary driving is less than expected, the Sino US trade relations have changed, and the valuation of the semiconductor industry is too high.
