1. MEMS sensors are gradually replacing traditional mechanical sensors.
2. Benefiting from the accelerated rise of 5g, Internet of things, new energy vehicles and other industries, the MEMS market space continues to grow: in 2019, the Chinese market still maintained growth under the influence of the epidemic. According to the data of the 2020 China MEMS manufacturing white paper, the overall MEMS market scale in China reached 59.78 billion yuan in 2019, a year-on-year increase of 18.3%.
3. The industrial chain presents a smile curve, and the manufacturing industry is expected to take the lead in realizing country transfer. The customization characteristics promote China’s subdivided fields to accelerate domestic substitution: China’s overall industrial chain is scattered. With the gradual upgrading of China’s semiconductor manufacturing process, coupled with localization services and cost advantages, and the small volume of MEMS, it is more suitable for OEM mode. Therefore, the trend of MEMS manufacturing to China is obvious. On this basis, considering the customization characteristics of MEMS, we believe that in the future, it is expected to go out of mature enterprises in subdivided application fields, including MEMS + AI, RF MEMS, photoelectric MEMS and biological MEMS. In addition, at the level of advanced packaging, the breakthrough of 3D wafer level packaging technology will also bring new industry opportunities.
4. Investment opportunity logic
1) driven by 5g, Internet of things, smart car and other technology markets, China’s MEMS industry market is expected to usher in a new round of rapid development;
2) at present, the driving conditions for China’s industrial development are good, including policy, demand, industrial support and technological iteration. However, China’s competition is still concentrated in the field of medium and low-end products, and high-end products are still monopolized by large overseas manufacturers. However, considering the customization characteristics of MEMS, Chinese enterprises are expected to make use of the existing industrial advantages and rely on the characteristics of OEM to rapidly grow a number of enterprises in deep-rooted segments with localization and cost advantages. Based on the breakthrough of 3D wafer level packaging technology, MEMS and ASIC are integrated to open up complete sensing end applications, so as to realize vertical extension in subdivided fields including MEMS + AI, RF MEMS, photoelectric MEMS and biological MEMS;
3) the breakthrough of MEMS devices based on new materials, such as PZT, zirconia, alumina, vanadium oxide and other new materials, is expected to quickly replace some traditional silicon-based products, greatly improve their product performance and reduce costs;
4) the first mock exam of the integration of sensors and integration of microcontrollers and microprocessors. Relevant listed companies include China MEMS OEM Saiwei electronics and Naiwei technology; Seal test manufacturer Jcet Group Co.Ltd(600584) ; IDM manufacturer Hangzhou Silan Microelectronics Co.Ltd(600460) , Western Horse; Application fields include Goertek Inc(002241) (acoustics), Jiangsu Olive Sensors High-Tech Co.Ltd(300507) (Automotive Electronics), Hanwei Electronics (Internet of things), Zhonghang Electronic Measuring Instruments Co.Ltd(300114) (special), etc.
5. Viewpoint of communication sector
1) continue to focus on recommending high growth sectors such as it main equipment, communication + new energy, network security, Internet of vehicles application and military communication.
2) recommend undervalued stocks this week: Unisplendour Corporation Limited(000938) , Jiangsu Zhongtian Technology Co.Ltd(600522) , Willfar Information Technology Co.Ltd(688100) , Black Peony (Group) Co.Ltd(600510) (acquisition of Aite energy layout thermal energy management business), Tcl Technology Group Corporation(000100) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) , Beijing Sinnet Technology Co.Ltd(300383) , Goldcard Smart Group Co.Ltd(300349) , Aisino Corporation(600271) , Hangzhou Anysoft Information Technology Co.Ltd(300571) , Zte Corporation(000063) , Guangzhou Haige Communications Group Incorporated Company(002465) and other companies.
6. Risk warning
The development of MEMS technology is less than expected, the application promotion is less than expected, and there are systemic risks.
