Key investment points
The overall market fell, with the semiconductor index down 4.53%
This week (2022 / 04 / 112022 / 04 / 15), the market fell as a whole. The CSI 300 index fell 0.99% and the semiconductor index fell 4.53%. Among them: semiconductor design – 4.0%, semiconductor manufacturing – 4.0%, semiconductor packaging – 2.5%, semiconductor materials – 5.7%, semiconductor equipment – 4.9%, power semiconductor – 6.6%.
Industry news
1) TSMC held a 22q1 Law Conference, and the revenue in that quarter exceeded the market expectation.
The company held a 22q1 Law Conference. The quarterly revenue was US $17.5 billion, exceeding the upper limit of the guidance range by US $17.2 billion, yoy + 36%, QoQ + 11%, and the net profit attributable to the parent company was US $6.974 billion, yoy + 45%, QoQ + 22%. The gross profit margin was 55.6%, exceeding the upper limit of the guidance range by 55%, yoy + 3.2pcts, QoQ + 2.9pcts, net profit margin 41.3%, yoy + 2.7pcts, QoQ + 3.4pcts. At this meeting, Wei Zhejia, CEO of TSMC, reiterated his optimism about the downstream demand of semiconductors such as MCU and PMIC, talked about their 3nm process technology, and said that the plan of mass production in the second half of this year would remain unchanged. For the prospect of 3nm process, Wei Zhejia said that there will be strong demand in high-performance computing and smart phone applications. In addition, TSMC has made a prospect for the operation of Q2, with an estimated revenue of US $17.6-18.2 billion, a gross profit margin of 56% – 58% and an operating profit margin of 45% – 47%.
2) the white list of 666 key enterprises returning to work and production in Shanghai includes 62 IC enterprises such as SMIC Huahong.
The Shanghai front working group of the Ministry of industry and information technology has taken various measures to support the stable production of key enterprises in Shanghai, including studying and establishing an emergency coordination mechanism for the demands of the industrial chain supply chain, establishing a “white list” of key enterprises to ensure the operation and transfer, and concentrating resources to give priority to ensuring the resumption of work and production of 666 key enterprises in key industries such as integrated circuit, automobile manufacturing, equipment manufacturing and biomedicine. Among the first batch of key enterprises in Shanghai, there are 62 integrated circuit enterprises including Semiconductor Manufacturing International Corporation(688981) , Huahong and Huali, and 17 supporting integrated circuit enterprises.
3) global semiconductor revenue rose by 26% in 2021.
According to the latest research report of Gartner, Inc., the total global semiconductor revenue in 2021 was $595 billion, an increase of 26.3% over 2020. Samsung Electronics has won back the top position from Intel for the first time since 2018. Although the gap is less than one percentage point, its revenue increased by 28% in 2021. On the contrary, Intel’s revenue decreased by 0.3%, ranking second with 12.2% market share, slightly lower than Samsung’s 12.3%. Among the top 10, AMD and MediaTek increased by 68.6% and 60.2% respectively in 2021. The top ten in the semiconductor industry in 2021 are Samsung Electronics, Intel, SK Hynix, micron technology, Qualcomm, Broadcom, MediaTek, Texas Instruments, NVIDIA and AMD.
Plate tracking
1) MCU: the MCU sector generally fell this week, of which Sino Wealth Electronic Ltd(300327) , Espressif Systems (Shanghai) Co.Ltd(688018) , Nations Technologies Inc(300077) fell by 8% ~ 10%, and Gigadevice Semiconductor (Beijing) Inc(603986) rebounded by 6% / 1% on Thursday and Friday, mainly due to its release of 22q1 performance forecast, which realized a net profit attributable to the parent company of 681 million yuan, a year-on-year increase of 126% and a month on month increase of – 1%, higher than the previous market consensus expectation of 650 million yuan. We believe that the MCU sector has continued to fluctuate since February, mainly because the market is worried about the prosperity of MCU. The strong growth of Gigadevice Semiconductor (Beijing) Inc(603986) q1 performance once again highlights the strong competitiveness of the company’s business. We continue to be optimistic about the leader, and continue to achieve high performance growth through product structure adjustment + localization.
2) simulation: the simulation sector generally fell this week, Shenzhen Sunmoon Microelectronics Co.Ltd(688699) fell 22%, Fine Made Microelectronics Group Co.Ltd(300671) only fell 0.5%, and the decline of other targets ranged from – 2% to 15%. We believe that the recent decline in the simulation sector is mainly due to the market’s concern that the loosening of downstream prosperity and the release of production capacity of large overseas factories from 22h2 may squeeze the mainland manufacturers’ market. We continue to believe that in the cycle of structural boom decline, mainland leaders can still rely on the first mover advantage to continue to carry out domestic substitution, and have the opportunity to strive for more production capacity when the production capacity side is loose, with stronger ability to cross the cycle.
3) storage: the storage sector generally fell this week, of which Puya Semiconductor (Shanghai) Co.Ltd(688766) fell by 20%, mainly because the company released the annual report of 2021, realizing a net profit attributable to the parent company of 291 million yuan, an increase of 238% year-on-year. The decline of other targets ranged from 2% to 10%.
4) silicon wafer: the semiconductor silicon material sector continued to decline this week, of which National Silicon Industry Group Co.Ltd(688126) -u fell by 0.44%, Tianjin Zhonghuan Semiconductor Co.Ltd(002129) fell by 3.58%, Hangzhou Lion Electronics Co.Ltd(605358) fell by 9.15%, Phenix Optical Company Limited(600071) fell by 6.53%, Thinkon Semiconductor Jinzhou Corp(688233) fell by 6.50%, Zhejiang Mtcn Technology Co.Ltd(003026) fell by 4.38%. The silicon wafer sector fell for several consecutive weeks, mainly affected by the overall market environment. The decline does not change the high outlook of the silicon wafer sector. Semiconductor materials have post cyclical properties. We continue to be optimistic about silicon wafer as the largest segment of semiconductor manufacturing materials. At present, the boom is strong, and domestic manufacturers will usher in rapid performance development.
5) photoresist: the photoresist sector fell as a whole this week, of which Red Avenue New Materials Group Co.Ltd(603650) fell by 10.62%, Crystal Clear Electronic Material Co.Ltd(300655) fell by 8.63%, Hmt(Xiamen)New Technical Materials Co.Ltd(603306) fell by 6.27%, Shanghai Sinyang Semiconductor Materials Co.Ltd(300236) fell by 4.68%, Jiangsu Nata Opto-Electronic Material Co.Ltd(300346) fell by 1.82%, and Jiangsu Yoke Technology Co.Ltd(002409) rose by 1.47%. We believe that the recent continuous decline of photoresist sector is mainly affected by the disturbance of the epidemic. Most of China’s major photoresist enterprises are located in Shanghai and Jiangsu and Zhejiang. The logistics control caused by the epidemic may have a negative impact on the transportation of raw materials. We believe that the domestic substitution trend of photoresist remains unchanged, and we are still firmly optimistic about the high prospect of photoresist sector this year.
6) equipment: in addition to shengmei Shanghai, the equipment sector also closed down this week, with the overall decline of 5.6% Naura Technology Group Co.Ltd(002371) released Q1 performance forecast, and the revenue and profit increased year-on-year, which supported the stock price. Other major equipment companies fell by more than 5% in the week. When TSMC said at the meeting that it would maintain the forecast of capital expenditure of US $40-44 billion in 2022, the procurement of upstream equipment sector remained strong. We are optimistic about the equipment sector under the resonance between the expansion cycle of wafer factories and domestic alternatives. Those domestic leaders who have made breakthroughs in product power deserve special attention.
7) power: the power sector continued to fall this week, and the windigbt index fell 4.6%. The new energy sector continued to callback, dragging down the power sector: the wind photovoltaic index fell 7.9% and the new energy index fell 7.0% in that week, with an increase over last week. At the level of individual stocks, major companies fell across the board, Yangzhou Yangjie Electronic Technology Co.Ltd(300373) (- 1.8%), Huawei Company (- 0.6%), and other major companies fell by more than 3%.
We believe that on the premise of no fundamental change in the prosperity of the sector, with the arrival of resumption of work and production in some areas, the market sentiment towards the semiconductor sector, including power, will gradually turn to optimism. We are optimistic about the growth of power leading companies under the background of domestic substitution.
Important announcement
1) Gigadevice Semiconductor (Beijing) Inc(603986) : Q1 increased by 126% year-on-year. There is no need for the market to worry. The company released the performance forecast for 2022q1, realizing a net profit attributable to the parent company of 681 million yuan, a year-on-year increase of 126% and a month on month decrease of – 1%. Q1 is the off-season of the whole year, and the performance decreased by only 1% month on month, reflecting the strong demand for the company’s products. Deduction of non RMB 650 million, a significant increase of 135% year-on-year and – 1% month on month.
2) Hangzhou Silan Microelectronics Co.Ltd(600460) : the company released the Q1 performance forecast in 2022. It is estimated that the net profit attributable to the shareholders of the listed company will reach 261 million yuan to 295 million yuan, an increase of 50% to 70% year-on-year. It is estimated that the deducted non net profit attributable to the shareholders of the listed company will reach 245 million yuan to 277 million yuan, an increase of 50% to 70% year-on-year.
3) Maxscend Microelectronics Company Limited(300782) : 22q1 achieved a revenue of 1.33 billion, a year-on-year increase of + 12%; The net profit attributable to the parent company was 440470 million, a year-on-year decrease of 5% ~ 10%; The net profit attributable to the parent company was 440 ~ 470 million yuan, a year-on-year decrease of 8% ~ 13%. The year-on-year increase in revenue was mainly due to the mass production of l-pamif and the gradual expansion of ldifem. The decrease in net profit was mainly due to the increase in operating expenses caused by the investment in R & D and talent reserve of Xinzhuo project.
Investment suggestions: continuing to recommend a series of recommendations for the investment recommendations: the continued recommendation of the ‘ Will Semiconductor Co.Ltd.Shanghai(603501) 35.
Risk tips: the demand is less than expected, the constraints of capacity bottlenecks, the technological progress of mainland manufacturers is less than expected, and the Sino US trade friction
