\u3000\u3 Guocheng Mining Co.Ltd(000688) 126 National Silicon Industry Group Co.Ltd(688126) )
As a leading enterprise of semiconductor silicon wafers, under the high boom of the industry and the wave of domestic substitution, the company’s silicon wafers have core competitive advantages such as large-scale first mover advantage + production capacity led by China & rapid start-up + leading level of technological innovation National Silicon Industry Group Co.Ltd(688126) since its establishment, adhering to the major strategic needs of the national semiconductor industry, adhering to the global layout, closely following the international cutting-edge technology, the company has broken through a number of key core technologies in the field of semiconductor wafer manufacturing, breaking the situation that the localization rate of 300mm semiconductor wafer in China is almost 0%. The company’s 300mm production capacity is the first to achieve large-scale mass production in China, and the goal of 300000 pieces / month installed capacity by the end of 2021, At the same time, raised investment projects will help the rapid expansion of production capacity.
The silicon wafer industry has entered a long business cycle in which supply exceeds demand, National Silicon Industry Group Co.Ltd(688126) with the advantage of large-scale first mover & rapid capacity start-up. As of 2020q3, the total investment of the 300mm wafer plant under construction and planned by guanxuan is nearly 751 billion yuan. Taking into account the projects put into operation, the total investment of China’s 300mm production line will be as high as 150 billion yuan, driving the continuous rise of silicon wafer demand. In the case of limited supply in the silicon wafer Market and no new production capacity, the expansion of wafer foundry has led to a sharp rise in the consumption of semiconductor silicon wafers, which has contributed to the rise in the price of silicon wafers and realized the simultaneous rise of volume and price. The semiconductor material industry belongs to the post manufacturing cycle. Silicon wafer enterprises will greatly benefit from the dividends brought by the production capacity of wafer factories. Considering that the expansion cycle of wafer OEM production capacity is more than 6 months, the silicon wafer industry will continue to boom.
On the supply side, according to icmtia data and our calculation, the supply capacity of 300mm semiconductor silicon wafer in China is about 950000 pieces / month by the end of 2021 (including positive and test pieces), National Silicon Industry Group Co.Ltd(688126) accounting for about 32%. Demand side, Chinese mainland 300mm silicon wafer demand in the end of 2021 to 1 million 310 thousand pieces per month, far exceeding the supply capacity of 950 thousand pieces / month. In terms of the company’s production capacity, Shanghai Xinsheng 300mm silicon wafer will achieve the target of 300000 pieces / month installed capacity by the end of 2021, and the fixed increase project will be increased. After being put into operation, the 300mm production capacity is expected to double. In the future, the company plans to achieve the production capacity target of 1 million pieces per month. New energy vehicles set sail, and 200mm silicon wafer ushered in a golden opportunity again. The subsidiaries Xinao technology and okmetic continue to layout, with the production capacity of polished epitaxial wafers of 200mm and below exceeding 400000 Wafers / month, and the production capacity of SOI silicon wafers of 200mm and below exceeding 50000 Wafers / month. Technology & products are comparable to the international advanced level, realizing the full coverage of process nodes + application fields + mainstream customers + product types, and helping to obtain a stable source of customers National Silicon Industry Group Co.Ltd(688126) has become one of the few semiconductor wafer enterprises with international competitiveness in China, and its products have been recognized by many customers at home and abroad The company’s new silicon wafer and polishing technology covers more than 26 types of silicon wafers and silicon wafers in Shanghai, covering the whole range of silicon wafer and polishing technology in Shanghai. In terms of technology, the company continues to make deep breakthroughs, such as optimizing epitaxial products, eliminating edge MCLT rings, improving the device utilization of the whole wafer, and rapidly improving the effective length of near perfect single crystal.
The global silicon wafer market presents an oligopoly pattern, National Silicon Industry Group Co.Ltd(688126) gradually break the monopoly and build an aircraft carrier for the domestic semiconductor silicon wafer industry. According to semi data, in 2020, the global semiconductor silicon wafer market was mainly occupied by five major players: Japan shinyue (28.0%), Japan Shenggao (21.9%), Taiwan universal wafer (15.1%), South Korea sksilon (11.6%) and Germany silonic (11.3%), National Silicon Industry Group Co.Ltd(688126) accounting for 2.2%, gradually breaking the monopoly. We are optimistic that National Silicon Industry Group Co.Ltd(688126) will achieve rapid development and become the aircraft carrier of semiconductor silicon wafer industry under the tide of geopolitics + policy support + capital boost + downstream development + continuous construction of Chinese wafer factories.
Investment suggestion: the semiconductor silicon wafer industry has a typical cyclical attribute. It fluctuates with the downstream semiconductor cycle. In the business cycle, the enterprise has the characteristics of tight production capacity and rising gross profit margin driven by price rise, which is suitable for Pb valuation. We select Hangzhou Lion Electronics Co.Ltd(605358) , Zhejiang Mtcn Technology Co.Ltd(003026) , universal wafer and sumco as comparable companies in the same industry. As of March 21, 2022, excluding universal wafer cash and cash equivalents, the average Pb is 6.34, corresponding to National Silicon Industry Group Co.Ltd(688126) 2022 net assets of 4.95 yuan per share, the target price is 31.38 yuan per share, and the “buy” rating is maintained.
Risk tip: the risk of decline in industry prosperity and business performance, technology R & D risk, increased market competition risk, 300mm silicon wafer R & D and advanced manufacturing project capacity climbing progress and production time less than expected
