Event: TSMC issued 2022q1 performance announcement.
TSMC’s Q1 performance exceeded expectations, which verified the high prospect of the global semiconductor industry. In 2022q1, TSMC achieved a revenue of US $17.57 billion (the original forecast value was US $16.6-17.2 billion), a year-on-year increase of + 36.0% and a month on month increase of + 11.6%; The net profit was US $7.25 billion, with a year-on-year increase of + 45.1% and a month on month increase of + 22.0%, exceeding market expectations. By industry, in 2022q1, TSMC achieved revenues of US $7.0 billion, US $7.2 billion, US $1.4 billion, US $0.9 billion and US $0.5 billion in mobile phones, HPC (High Performance Computing), IOT (Internet of things), automobiles and DCE (data communication equipment), with year-on-year growth of 21%, 59%, 21%, 70% and 2% respectively, and month on month growth of 1%, 26%, 5%, 26% and 8% respectively. It can be seen that in the market segment, the demand for new energy vehicles & HPC has increased rapidly and maintained a high outlook.
The demand for new energy is strong & the impact of the epidemic is controllable. There is no need to be pessimistic about the prosperity of the semiconductor industry in 2022. There was a sharp correction in the semiconductor equipment sector in 2022. The core lies in the market’s concern about the downstream prosperity. We believe that driven by high boom tracks such as new energy vehicles, there is no need to be pessimistic about the industry boom in 2022. The specific analysis is as follows: 1) globally, according to IC insights, driven by Automotive Electronics & consumer electronics, the global semiconductor sales are expected to reach US $680.6 billion in 2022, with a year-on-year increase of + 11%, which will reach a record high. In addition, TSMC’s 2022q2 revenue target is $17.6-18.2 billion, a single quarter high, which is also enough to verify the strong global market demand. 2) For the Chinese market: ① on the demand side: taking new energy vehicles as an example, China sold 1.25 million vehicles in 2022q1, a year-on-year increase of + 143%. The demand continued to be strong, and the demand for semiconductors continued to grow. ② On the supply side: the operating rate of wafer factories is still high, the production rate of packaging and testing factories has a differentiation trend, the supply of advanced packaging, automotive electronics & Consumer Electronics and other fields is still in short supply, and the capital expenditure of downstream customers is still guaranteed in 2022.
In addition, the current market is also generally worried about the impact of the Shanghai epidemic on downstream construction (in 2020, the income scale of Shanghai’s integrated circuit industry accounted for about 1 / 4 of the country). However, as far as we know, relevant enterprises in Shanghai mainly take closed-loop management and production measures, the overall impact is controllable, and the follow-up needs to focus on logistics and other uncertain factors.
Local semiconductor equipment enterprises have entered the performance cashing period. Domestic substitution exists for a long time and has broad space. In the short term, driven by domestic substitution logic, we judge that the performance of local semiconductor equipment enterprises in 2022 is expected to show higher growth elasticity than that of the industry. In terms of Q1, 1) Naura Technology Group Co.Ltd(002371) : it is estimated that the revenue in 2022q1 will be 1.99-2.28 billion yuan, a year-on-year increase of + 40% – + 60%; It is estimated that the net profit attributable to the shareholders of the listed company will be 197219 million yuan, a year-on-year increase of + 170% – + 200%; 2) Beijing Huafeng Test & Control Technology Co.Ltd(688200) : from January to February 2022, it is expected to achieve a revenue of 199 million yuan, a year-on-year increase of + 172%; The net profit attributable to the shareholders of the listed company is expected to be 105 million yuan, a year-on-year increase of + 241%. Looking forward to the whole year of 2022, the total inventory and contract liabilities of Advanced Micro-Fabrication Equipment Inc.China(688012) , shengmei Shanghai, Beijing Huafeng Test & Control Technology Co.Ltd(688200) and Kingsemi Co.Ltd(688037) will reach 4.3 billion and 2.2 billion yuan by the end of 2021, with a year-on-year increase of + 101% and + 161% respectively. The high growth of annual performance in 2022 is also strongly supported.
In the medium and long term, the domestic substitution logic will continue. With the continuous breakthrough of leaders in various links, it will continue to open the growth space of the industry. 1) On the whole, domestic semiconductor equipment is still in its infancy. According to MIR data, the localization rate of wafer equipment in Chinese mainland in 2020 was only 7.4%, and most of the links were less than 10%, and the domestic substitution space was larger. 2) After years of technology accumulation, the leaders in all links are making continuous breakthroughs and opening up growth space. ① In the field of gelatinization and development, Kingsemi Co.Ltd(688037) expands to KrF, ARF and submerged inline machines, opening up greater market space; ② In the field of testing, Hangzhou Chang Chuan Technology Co.Ltd(300604) the technical reserve of digital testing machine probe platform is mature, which will completely open the growth space in the field of testing. ③ In the field of etching, Advanced Micro-Fabrication Equipment Inc.China(688012) CCP has perfect technology and its market share is expected to continue to increase. In addition, Naura Technology Group Co.Ltd(002371) & shengmei Shanghai platform development appears, and the large volume of new products will drive the rapid growth of the company.
Investment suggestion: with strong downstream demand and domestic substitution drive, the leading performance of the local semiconductor equipment industry is expected to continue to grow at a high speed in 2022. Highlight [ Kingsemi Co.Ltd(688037) ], [ Hangzhou Chang Chuan Technology Co.Ltd(300604) ], [ Beijing Huafeng Test & Control Technology Co.Ltd(688200) ], [ Naura Technology Group Co.Ltd(002371) ], [ Advanced Micro-Fabrication Equipment Inc.China(688012) ], [ shengmei Shanghai], [ Pnc Process Systems Co.Ltd(603690) ]. It is recommended to pay attention to [ Wuhan Jingce Electronic Group Co.Ltd(300567) ], and the upcoming [tuojing technology].
Risk tip: the investment in semiconductor industry is less than expected, and the localization process of equipment is less than expected.
