Key investment points:
Event: on March 24, STMicroelectronics again sent a price increase letter to dealers, raising the price of all products from the second quarter, including backlog orders.
The price rise indicates that the products are still in short supply, and the prosperity of power and MCU track continues. As the world’s leading manufacturer of MCU and power semiconductors, ST’s main businesses are mainly divided into three categories: MCU and digital IC business, automobile and discrete device business, analog, MEMS and sensor business. Its revenue in 21 years accounted for 30%, 34% and 36% respectively. The company also said at the financial report telephone conference in January that the backlog of orders has reached 18 months, far higher than the planned production capacity of 22 years. At present, the demand for new energy vehicles and industrial control continues to grow, and most of the corresponding production capacity will not be available until the second half of 22 years or later, resulting in a continuous shortage of chips, especially in the fields of power chips and vehicle regulation MCU. According to the industry research, the prosperity is expected to extend to at least the end of 22 to the beginning of 23.
Fab factory actively expanded production, the cost of upstream silicon chips and other products rose, and semiconductor materials ushered in a high boom market. Another reason for ST’s current round of price rise is the rising cost of upstream raw materials and energy. FAB’s large-scale expansion and high capacity utilization have brought a large demand for semiconductor materials. Sumco said that by the end of 2026, the silicon wafer production capacity has been fully booked, and the price of silicon wafer will rise by about 10% in 21 years, which is expected to continue until at least 2024. We believe that semiconductor materials, as the post expansion cycle of Fab plant, are expected to usher in a sustained high boom in the next few years. Under the larger supply and demand gap, Chinese manufacturers are expected to usher in more opportunities for verification and introduction.
Investment suggestions: the power sector suggests paying attention to Zhuzhou Crrc Times Electric Co.Ltd(688187) , Starpower Semiconductor Ltd(603290) , Wuxi Nce Power Co.Ltd(605111) , and Yangzhou Yangjie Electronic Technology Co.Ltd(300373) , Hangzhou Silan Microelectronics Co.Ltd(600460) , Wingtech Technology Co.Ltd(600745) , etc; MCU designers suggest paying attention to Gigadevice Semiconductor (Beijing) Inc(603986) , Chipsea Technologies (Shenzhen) Corp.Ltd(688595) , Sino Wealth Electronic Ltd(300327) , Ninestar Corporation(002180) , etc; Analog IC is suggested to pay attention to Sg Micro Corp(300661) , Wuxi Chipown Micro-Electronics Limited(688508) , xidiwei, Shanghai Awinic Technology Co.Ltd(688798) , etc.
Risk warning: the R & D progress is less than expected, the risk of intensified market competition, and the downstream demand or production expansion progress is less than expected.
