Industry core view:
Last week, the electronic index (Shenwan level) fell by 1.33%, 0.39 percentage points lower than the Shanghai and Shenzhen 300 index. From the perspective of sub industries, among the secondary sub industries, electronic chemicals II increased the most, with an increase of 1.06%. Among the tertiary industries, the largest increase was semiconductor equipment, with an increase of 3.30%. Last week’s industry dynamics, in the automotive chips and semiconductor materials sector, the Fukushima earthquake in Japan has affected the production of vehicle chips and silicon wafers. The Japanese semiconductor materials have been given the warning of Chinese mainland manufacturers’ limited supply, or the process of making domestic automotive chips and semiconductor materials domestically. In the memory interface chip and semiconductor equipment sector, cloud computing has spawned the demand for memory interface chips, and the development of photovoltaic industry and new display further opens the downstream market of semiconductor equipment. Investors are advised to pay attention to the important boom tracks of the electronic industry and recommend landscape segmentation fields such as chips, semiconductor materials and equipment.
Key investment points:
The Japanese earthquake affected many upstream manufacturers of the semiconductor industry chain, and the localization process needs to be accelerated: on March 16 local time, two earthquakes occurred in the sea area near Fukushima Prefecture, Japan. The earthquakes mainly radiated northeast, Kanto and central Japan, affecting the factories of Renesas, Xinyue and Shenggao. The more important suppliers of silicon chip and MCU in Japan, the higher the global market share of Sinochem and SINOCHEM. Semiconductor manufacturing is extremely sensitive to vibration. Even with the help of vibration isolation platform, high-frequency earthquakes will still damage silicon wafers and chips. We believe that the Japanese earthquake may exacerbate the supply shortage of the semiconductor industry in the short term, especially in the field of automotive electronics. Japan has limited the supply of photoresist to the wafer fabs in Chinese mainland due to the earthquake. With the shortage of vehicle chips and the demand for materials for wafer fabrication, the demand for localization of semiconductor materials and automotive chips is growing.
The fundamentals of China’s semiconductor industry have performed well and benefited from the high demand of the lower reaches: Recently, Semiconductor Manufacturing International Corporation(688981) , China Resources Microelectronics Limited(688396) , Naura Technology Group Co.Ltd(002371) , Montage Technology Co.Ltd(688008) and other important Chinese semiconductor companies announced their main business data from January to February 2022 Semiconductor Manufacturing International Corporation(688981) , China Resources Microelectronics Limited(688396) and other companies performed well from January to February, highlighting the good fundamentals of China’s semiconductor industry. We believe that this mainly benefited from the high prospect of downstream demand. Among them, memory interface chips are mainly used to improve the speed and stability of server memory data access. The demand for high-performance and high-capacity servers in the cloud computing era will drive the growth of the demand for memory interface chips; The growth of investment in photovoltaic industry, new display, automotive electronics and other fields has brought huge growth space to semiconductor equipment.
The industry valuation level gradually entered a lower range: the PE (TTM) of SW electronics sector was 26.84 times, significantly lower than the peak level of 88.11 times in the 4G construction cycle.
The performance of the electronics sector rebounded last week: among the 367 stocks in Shenwan electronics industry last week, 83 rose, 282 fell and 2 remained flat, with an increase ratio of 22.62%.
Risk factors: the risk of continued conflict between Russia and Ukraine; Trade friction risk; The risk of technology R & D not keeping up with expectations; Risks of intensified competition in the same industry
