Matters: Interpretation of Zhejiang Grandwall Electric Science&Technology Co.Ltd(603897) point of view at the 2022 Q1 legal person explanation meeting of TSMC, the global foundry leader
1. TSMC’s performance in 22q1 exceeded the original guidelines. The revenue in 22q2 increased by 32% ~ 37% year-on-year, and the gross profit margin continued to increase month on month. 22q1 TSMC achieved a revenue of US $17.57 billion, a year-on-year increase of 36% and a month on month increase of 12%, mainly due to the strong demand for 7Nm advanced processes. The revenue range of 22q2 guidance is US $17.6 billion to US $18.2 billion, with a year-on-year increase of 32% ~ 37%; The gross profit margin ranges from 56% to 58%.
2. TSMC is optimistic about the prosperity of the global semiconductor industry in 2022. TSMC expects the global semiconductor market (excluding storage) to grow by about 9% and the wafer foundry market to grow by 20% in 2022. The demand for semiconductors shows structural growth, the silicon content of terminal equipment continues to increase, and the prosperity of the semiconductor industry will continue.
3. TSMC 22q1’s capital expenditure was USD 9.38 billion, which increased month on month, and pointed out that the annual production capacity remained tight. The company is optimistic about the continuation of the high outlook of the global semiconductor industry, which mainly benefits from the long-term structural growth of demand in the semiconductor industry, strong downstream demand in HPC and automobile fields, and the company’s production capacity remains tight in 2022.
4. The global semiconductor industry will change from capacity shortage to capacity release, and the prosperity of semiconductor materials is high. At present, the wafer foundry industry is still in a state of capacity shortage. However, with the acceleration of the expansion of global wafer factories, it is expected that the supply and demand of the industrial chain will gradually balance from the second half of 2022. It is judged that the global semiconductor industrial chain will change from capacity shortage to high input of semiconductor equipment to capacity release in 2022, promoting the high prosperity of semiconductor materials.
5. The performance of the semiconductor industry increased rapidly, and the valuation fell back to the low point in recent five years. As of April 15, 2022, the latest PE (TTM, overall method) of SW semiconductor sector was 46.78 times, which was at a historical low in recent five years, mainly due to the good overall performance of the semiconductor industry in 2021, but the industry sector continued to callback, so the valuation fell back to a historically low level.
6. Focus on semiconductor materials and leading companies with undervalued value, silicon wafer: National Silicon Industry Group Co.Ltd(688126) , Hangzhou Lion Electronics Co.Ltd(605358) , Zhejiang Mtcn Technology Co.Ltd(003026) ; Polishing materials: Anji Microelectronics Technology (Shanghai) Co.Ltd(688019) , Hubei Dinglong Co.Ltd(300054) etc. From the perspective of downstream segments, we are optimistic about the demand drivers such as new energy vehicles and photovoltaic, focusing on the leading enterprise of automotive CMOS chip Will Semiconductor Co.Ltd.Shanghai(603501) , the leader of power semiconductor Wingtech Technology Co.Ltd(600745) , automotive screen related business Wuhu Token Sciences Co.Ltd(300088) and so on. Underestimated value of Faucet: Maxscend Microelectronics Company Limited(300782) Gigadevice Semiconductor (Beijing) Inc(603986) .
Risk warning: insufficient downstream demand; Geopolitical uncertainty; Epidemic risk; Valuation risk
