\u3000\u3 Guocheng Mining Co.Ltd(000688) 012 Advanced Micro-Fabrication Equipment Inc.China(688012) )
Demand drives capital expenditure, and equipment localization is imperative
The global semiconductor market has a strong growth momentum in 2021 and is expected to continue in 2022. At present, the prosperity of the semiconductor industry continues to rise, and the chip supply shortage continues to drive the chip manufacturers to repair the capital expenditure plan, promote the expansion of production and enhance production capacity. Icinsight predicts that the capital expenditure of the semiconductor industry will continue to grow by 24% in 2022, further boosting the demand for equipment. Semi predicts that the total global semiconductor manufacturing equipment market will expand to US $107 billion in 2022, with a year-on-year increase of 18%. According to Frost & Sullivan, the CAGR of China’s integrated circuit market from 2015 to 2019 is 20%, and it is expected that the market will break trillion in 2022. However, China’s IC self-sufficiency rate is only 15.9% in 2020, which not only affects the development of China’s semiconductor industry, but also poses major hidden dangers to the security of China’s information industry. The US sanctions and squeeze events further stimulate the crisis awareness of Chinese manufacturers, highlighting the importance of self-control, The verification of new domestic machines is expected to be actively promoted, and the localization of equipment is imperative.
The value proportion of advanced process etching links is increased, opening up long-term space
With the development of advanced manufacturing process, the key dimensions of linewidth are continuously reduced. The micromachining structure of logic devices below 14nm is mostly realized through multiple temsector process, which improves the number of etching processes. The etching steps in 28nm logic devices are about 40, and the etching steps in 5nm are more than 160; With the development of 3D chip structure, the stacking structure increases the etching difficulty and brings about an increase in the value of etching links. The value of etching links in 3D structure accounts for 50%, which is much higher than that in planar structure; With the development of advanced process technology, the increase in the volume and price of etching equipment is expected to open up long-term growth space.
CCP technology is leading, ICP has broad prospects, and the superposition of advantages promotes the process of import substitution
In the field of CCP etching equipment, the company’s technology is at the international leading level in China. It has obtained repeated orders in the production line of logic circuit 5nm and below, and has entered the top three or even the top two in the market share of some key customers; Repeated orders in the 64 layer and 128 layer production lines of 3dnand chips increased steadily. The research and development of Damascus process is expected to further deepen the moat of the company’s CCP etching equipment technology and improve the permeability of the production line.
In the field of ICP etching equipment, by the end of 2021, primonanova had successfully delivered more than 180 reaction chambers, and the number of applications verified at the client was also increasing. Primotwin star (released in the first half of 2021) has completed certification on the client and received orders from leading customers in China.
In 2021, the company produced and delivered 134 chambers of ICP etching equipment, with a year-on-year increase of 235% and strong development momentum. In the future, ICP equipment is expected to continue to promote production line verification. With the promotion of the company’s R & D, the coverage of ICP etching process will increase, and the market share of ICP etching equipment will increase due to the difficulty of FEOL link in the superimposed advanced process. In the future, ICP etching equipment may become the main growth point of performance. The company has strong service advantages and high cost performance advantages. The double reaction table saves floor space and has cost advantages. Benefiting from the expansion of production by downstream Chinese enterprises, it is expected to accelerate the import substitution.
The accelerated industrialization of miniled is expected to significantly increase the demand for MOCVD, and the newly signed orders increase significantly
Since 2020, miniled applications have started to increase slightly. In 2021, with the cost reduction caused by the scale effect and yield improvement, the upstream and downstream continue to promote the industrial application of miniled, and miniled has entered the fast lane of commercial development. By seizing the opportunity of miniled market, through efficiency and technical advantages, the gross profit margin of MOCVD equipment will rise sharply to 33.8% in 2021. In the future, with the rapid development of miniled market and the improvement of yield rate of MOCVD equipment, the number of equipment orders is expected to increase continuously. By the end of 2021, the company’s prismonimax orders had exceeded 100 cavities. In March 2022, the company received Shenzhen Mtc Co.Ltd(002429) 52 cavity purchase orders, and the cumulative orders exceeded 180 cavities.
Platform layout to build a comprehensive semiconductor equipment leader
While consolidating the development of its main business, China micro continues to carry out platform layout and promote epitaxial development. On the one hand, based on its own technical connectivity, China micro has entered the field of chemical deposition film equipment and epitaxial production equipment. At present, it has begun to independently develop EPI epitaxial equipment and LPCVD equipment, participate in the ideal wanlihui in the field of PECVD equipment, tuojing technology, PECVD for photovoltaic cells and flat panel displays, and solayer in the field of coating and film modification equipment, forming business collaboration; On the other hand, through epitaxial development, China micro has participated in Shanghai Ruili, accelerated the layout of semiconductor testing equipment, and continued to build a comprehensive semiconductor equipment leader.
Profit forecast
It is estimated that the company’s revenue from 2022 to 2024 will be RMB 4.52/61.2/8.07 billion respectively, and the net profit attributable to the parent company will be RMB 1.23/16.0/1.93 billion respectively, corresponding to the current share price and PE will be 55, 43 and 35 times respectively. Considering the leading position of the company in the etching field of semiconductor equipment and the gradual volume of the company’s MOCVD equipment in the miniled field, the company is committed to building a platform company and will gradually grow into an influential semiconductor equipment company in the world, maintaining the “recommended” rating.
Risk tips
The R & D investment of semiconductor equipment industry is huge, and there is a risk that it can not meet the needs of customers after R & D failure or products are put into the market; The global semiconductor industry is transferring to Chinese mainland to mitigate risks. The progress of the raised investment project does not meet the expectations; Sino US trade friction intensifies; Risk of shortage of parts supply, etc.
