The dark war around the semiconductor industry has continued since this year. Just at the end of November, EU countries agreed to allocate more than 40 billion euros to enhance the EU's semiconductor production capacity. The EU's plan is to increase the chip production share of the world from the current 10% to 20% by 2030.
No coincidence, once reigning in the field of integrated circuit semiconductor Japan also dare not be lonely, a few days ago, Toyota, Denso, Sony, Nippon Telegraph and Telephone Corporation (NTT), Japan Electric (NEC), Softbank, Armor Man, Mitsubishi UFJ Bank jointly set up a chip process company Rapidus, plans to achieve mass production of chips below 2 nanometers in 2027. As the first major integrated circuit semiconductor chip, the United States in the chip technology high point control is more relentless, signed in August this year to implement the "Chip and Science Act", will be a huge subsidy in the global formation of high-end integrated circuit semiconductor chip industry chain siphon effect, at present, Samsung, TSMC has chosen to build factories in the United States, mainly targeting chip technology below 5 nanometers.
Chip globalization competition again set off the tide, China can not just be a spectator. The reality is that, on the one hand, China's semiconductor industry is being significantly suppressed by competitors, but also further highlights the importance of independent control of the semiconductor supply chain. A number of strength brokerage firms said that they are firmly optimistic about the development prospects of semiconductor local substitution in the next few years, suggesting that investors focus on key areas such as equipment, materials and packaging and testing in the localization track.
Upstream equipment: localization process accelerates
In the rapid development of the domestic semiconductor industry and the dual drive of national policies, domestic semiconductor equipment manufacturers on the one hand, continue to expand product categories, and gradually break the monopoly of foreign manufacturers; on the other hand, steadily improve product performance, and gradually penetrate into the high-end market. Although the semiconductor equipment to accelerate the localization process, but the domestic replacement is still in the early stage, is expected to cross the industry cycle.
Pacific Securities analyst Liu Guoqing pointed out that, according to the type of equipment, although debinding equipment has basically achieved localization, but in the CMP, PVD, etching, heat treatment and other aspects of the localization rate is still low, while in the photolithography, coating development equipment at this stage only to achieve a breakthrough from 0 to 1. Therefore, on the whole, the localization rate still has more room for improvement, especially in the United States through the "Chip and Science Act" and the domestic policy level to increase investment in the semiconductor field, we believe that in the "downstream expansion + domestic replacement" theme, domestic equipment manufacturers are expected to accelerate upward.
From the perspective of the fundamentals of domestic semiconductor equipment listed companies, the performance of the first three quarters of 2022 semiconductor equipment industry began to accelerate growth, the industry's total revenue growth of 65% year-on-year; in addition, industry profitability is also continuing to improve. The first three quarters of the semiconductor equipment industry's deductible net profit margin average of 19.0%, 2017 so far year-on-year upward trend is significant; at the same time, the domestic semiconductor equipment listed companies orders generally high growth.
Import substitution of semiconductor equipment is the main theme. Yang Shaohui, an analyst at Everbright Securities, recommends investors to pay attention to semiconductor equipment manufacturers SMIC, Shengmei Shanghai, North Huachuang, Core Source Micro, Tuojing Technology, Huahai Qingke, Wanye Enterprise, Precision Measurement Electronics, Tianjun Technology, Huaxing Yuanchuang, Crydom, Delonghi Laser, and Lightforce Technology.
Midstream materials: entering the golden development period
For semiconductor materials, although the U.S. chip bill has intensified the restrictions on China's advanced process areas, but China has made more significant progress in the mature process-related semiconductor materials sector, semiconductor materials companies are expected to form a positive feedback loop after obtaining continuous orders, relying on sustainable capital inflows to promote the expansion of existing semiconductor materials product capacity and a new generation of semiconductor materials Product development.
Guangda Securities analyst Zhao Naidi pointed out that in the trend of globalization, the introduction of such bills or policies in the United States does not contribute to the advancement of globalization, but rather accelerates the development of fragmentation of related industries. We also need to accelerate to fill the gap between China in some key areas and the global advanced level.
At present, the domestic semiconductor manufacturing materials localization rate of about 10%, mainly dependent on imports. At present, China is also making great efforts to support the localization of the card neck industry, and our semiconductor material manufacturers have accelerated the progress of localization substitution. In the field of integrated circuits, the acceleration of local substitution, industry technology upgrading and national industrial policy support and other multiple good support, domestic semiconductor materials companies are expected to usher in a golden development period, the industry chain of high-quality enterprises are expected to take the lead in benefiting.
Newly built wafer fabs will be the main battlefield for local semiconductor materials to increase their share. Hu An securities analyst Hu Yang pointed out that the current new major fab production time began in 2022-2024, judging that the golden window period will continue for 2-3 years, during which is the best time for enterprises to replace the semiconductor materials domestically. It is recommended that investors focus on Jingrui Electric Material, Powerful New Material, Nanda Optoelectronics, Jacques Technology, Jianghua Micro, Juhua, Haohua Technology, Huatech Gas, Shanghai Xinyang, etc.
Downstream packaging and testing: market share continues to increase
IC packaging and testing is located in the downstream of the industry chain, which can be divided into two segments: packaging and testing. Under the development trend of specialization and division of labor in IC industry, more IC packaging and testing orders will flow out from traditional IDM manufacturers, which is favorable to downstream packaging and testing enterprises.
Some industry sources point out that in recent years, domestic manufacturers have been rapidly accumulating advanced packaging technologies through mergers and acquisitions, and the technology platform has been basically synchronized with overseas manufacturers, and the proportion of Chinese advanced packaging in the world is gradually increasing. Against the background of domestic policies actively supporting advanced packaging, the pace of development of domestic advanced packaging is expected to accelerate in the future. At the same time, under the background of trade friction between China and the U.S., the demand for domestic substitution is strong, the share of domestic packaging leaders will increase, and domestic packaging manufacturers still have a large profit margin.
With the promotion of semiconductor industry transfer, human resource cost advantage and tax preference, global IC packaging capacity is gradually shifting to Asia Pacific region and the industry maintains steady growth. According to the data of related institutions, the compound growth rate of China's IC packaging market has been significantly higher than the global one for more than 10 years; affected by the epidemic, many supply chains of global semiconductors continue to be tight or interrupted during the epidemic, and the supply continues to be tight or interrupted during the epidemic, overlapping with the strong demand of downstream new energy vehicles, AioT and AR/VR, etc., many semiconductor foundries have high capacity utilization. Based on the strong capacity utilization and continuous high demand expectations in the context of the epidemic, global semiconductor makers' capital expenditures are expected to remain strong and downstream packaging manufacturers are expected to benefit fully.
Dongguan Securities analyst Liu Menglin pointed out that China has strong domestic competitiveness in packaging and testing, and is optimistic about the profitability improvement brought by the continuous development of advanced packaging to the industry under the background of high boom in the long term. It is recommended to pay attention to Changdian Technology, Huatian Technology, Tongfu Microelectronics, Jingfang Technology and other related enterprises.
Translated with www.DeepL.com/Translator (free version)
Post time: Dec-17-2022