Main points:
The semiconductor industry is in a business cycle, driving the equipment up the wind. 1) The semiconductor industry is booming. According to SIA data, the global semiconductor sales in 2021 was US $55.59 billion, with a year-on-year increase of 26%. Among them, China’s semiconductor sales were US $192.5 billion, a year-on-year increase of 27%. 2）
High growth in semiconductor devices. According to semi data, the global semiconductor equipment market in 2021 was US $102.6 billion, with a year-on-year increase of 44%. In the same period, the sales of semiconductor equipment in Chinese Mainland reached US $29.6 billion, a year-on-year increase of 56%, and the growth rate of the industry far exceeded the global average. 3) Ben
The share of local wafer factories in the Chinese Mainland market has steadily increased, resulting in corresponding equipment demand. In 2018, enterprises in Chinese Mainland accounted for 4.19% of China’s IC market share. According to the data of China Semiconductor Industry Association, the scale of China’s IC market in 2021 was about US $158 billion. According to our statistics, the revenue of the top four wafer factories in mainland China in 2021 was about US $9.5 billion, accounting for 6.03% of the scale of China’s IC market. Relying on China’s high chip demand, the market share of China’s local chip enterprises is expected to maintain a continuous upward trend, driving the steady growth of equipment end.
The terminal is seriously short of core, and the wafer factory actively expands production. 20212022 is the peak of equipment demand.
1) the wafer factory is in full production, close to zero inventory, and the order delivery cycle continues to lengthen. Since 2021, some wafer factories in China have reached full capacity, and the capacity utilization rate has reached more than 100%; From the perspective of the median inventory of semiconductor consumers, the median inventory of semiconductor products decreased from about 40 days in 2019 to less than 5 days in 2021; According to the data of sourcngine, an American electronic component distributor, the average delivery cycle of general semiconductor products is still lengthening, and some products have been extended by 9-15 weeks.
2) “core shortage” is mainly caused by the growth of terminal demand and limited production capacity. Sumco predicts that the global demand for 12 inch wafers from 2021 to 2025 will have a CAGR of 10.2%. From 2021 to 2025, the terminal applications that promote the growth of 12 inch wafers mainly come from smart phones, data centers, artificial intelligence, automobiles and wireless communications. With the technological upgrading and intelligent upgrading of terminal products, the core load will continue to grow. The demand for terminal applications increases, the capacity of wafer factories is limited, and the mismatch between supply and demand leads to “core shortage”.
3) the wafer factory actively expanded its production capacity and increased the demand for driving equipment. According to the current financing and production expansion plan of major wafer factories, Chinese Mainland pre expanded 12 inch 1.499 million chips / month, and expanded 8 inch 335000 chips / month. Among them, the 12 inch film to be put into operation in 2022 is about 780000 pieces / month, and the 8-inch film is about 305000 pieces / month; It is estimated that after 2022, a total of about 719000 pieces / month will be put into operation for 12 inches and about 30000 pieces / month for 8 inches. The release time of most wafer factories’ capacity is between 2022 and 2023. According to the fact that the expansion of wafer factories generally takes 1-2 years and the equipment procurement starts in the early stage of expansion, we expect the semiconductor equipment industry to benefit from the large-scale financing and expansion of downstream wafer factories, and the dividends are mainly concentrated in 20212022.
Domestic semiconductor equipment has stepped into the industrialization substitution stage in many links. The income and sales volume of key companies have been scaled up, and the development is driven by high-intensity investment in R & D. 1) The industry concentration is increasing. The semiconductor equipment market is highly concentrated, overseas leaders are in a monopoly position, and the market share shows a continuous growth trend. According to the statistics of VLSI research, the industry Cr5 in 2021 was about 84%, significantly higher than 65% in 2019. 2) Chinese equipment enterprises have made continuous breakthroughs and entered the stage of localization and substitution. In terms of subdivision sectors, the degree of autonomy of lithography sector is low; Degumming equipment has been basically replaced by localization, and Yitang Co., Ltd., a representative enterprise in China, has been established; The localization rate of cleaning equipment is about 20%. The main enterprises in China include Naura Technology Group Co.Ltd(002371) , shengmei Shanghai, Kingsemi Co.Ltd(688037) and Pnc Process Systems Co.Ltd(603690) ; The localization rate of etching equipment is about 20%, and the main enterprises are Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) ; Thin film deposition equipment Naura Technology Group Co.Ltd(002371) has achieved breakthroughs in PVD, CVD and ALD equipment in the field of 28nm / 14nm technology. Tuojing technology mainly involves CVD and ALD equipment in the field of 28nm / 14nm technology; The production line of domestic ion implanter has been verified successfully. The main enterprises include kaishitong, a Shanghai Wanye Enterprises Co.Ltd(600641) subsidiary; CMP equipment Huahai Qingke realizes mass production of 12 inch equipment. 3) The revenue and sales volume of key companies have been scaled up. In terms of sales volume, the sales volume of Chinese semiconductor equipment enterprises has taken shape in 2021, with a significant increase over the previous year. The sales volume of most equipment increased by more than 100% year-on-year. Among them, the shipment volume of Kingsemi Co.Ltd(688037) single-chip wet equipment and Pnc Process Systems Co.Ltd(603690) semiconductor equipment increased by more than 200%. In terms of revenue scale, the revenue of semiconductor equipment sector of several manufacturers has exceeded one billion yuan, entering the stage of large-scale revenue generation. 4) R & D expenditure is at a record high, and high-intensity R & D investment drives long-term development. According to the R & D expenditure of the seven semiconductor equipment companies, the total R & D expenditure of the seven companies in 2021 was 4.456 billion yuan, with a year-on-year increase of 65.28%. Among them, the higher R & D expenditure was Naura Technology Group Co.Ltd(002371) , Advanced Micro-Fabrication Equipment Inc.China(688012) , Pnc Process Systems Co.Ltd(603690) and shengmei Shanghai, which were 28.92/7.28/3.02/278 million yuan respectively. At the same time, the R & D intensity of each company remained at a high level, among which, Naura Technology Group Co.Ltd(002371) and Advanced Micro-Fabrication Equipment Inc.China(688012) were the highest, 29.87% and 23.42% respectively, Shanghai Wanye Enterprises Co.Ltd(600641) was 7.99%, and the rest remained above 10%. Relying on high R & D investment, build core competitiveness and drive long-term development.
Investment suggestions:
The short-term logic of China’s semiconductor equipment industry looks at the fluctuation of supply and demand, and the long-term logic is localization substitution, so as to realize the independent control of the industry. From the perspective of cycle, 20212022 is the peak period of equipment demand, and the orders of key companies increase rapidly, which confirms that the equipment demand remains strong in 2022. From a long-term logical point of view, in recent years, through the continuous efforts of China’s local equipment enterprises, the products have been continuously verified by the production line, the localization substitution process has been accelerated, the mature process in many fields has broken the monopoly and entered the stage of commercial supply, the sales volume and income have begun to take shape, and the industry is in the early stage of growth. We suggest to pay attention to the key companies that have achieved technological breakthroughs in all links and enter the commercial supply, and recommend Naura Technology Group Co.Ltd(002371) , tuojing technology, shengmei Shanghai, Pnc Process Systems Co.Ltd(603690) , Kingsemi Co.Ltd(688037) , Shanghai Wanye Enterprises Co.Ltd(600641) , Beijing Huafeng Test & Control Technology Co.Ltd(688200) .
Risk tips:
Risk of dependence on some key parts suppliers; Covid-19 epidemic causes the risk of prolonging the delivery time of equipment parts; Market competition risk; Risks of technology upgrading iteration and R & D falling short of expectations; Macroeconomic and industry fluctuation risks.
