Demand boosts the prosperity of the chip sector
Our reporter Liang Rui
Since 2020, the semiconductor industry has entered a new economic cycle.
Judging from the recent performance of 2020 and the first quarter released by various listed semiconductor companies, the vast majority of companies achieved profits last year, and more than 80% of the companies’ net profits increased year-on-year.
In early April, Weir shares released a performance forecast for the first quarter of this year, showing that the net profit in the first quarter is expected to increase by about 455 million yuan to about 635 million yuan compared with the same period last year, a year-on-year increase of more than 100%.
Previously, on March 31, SMIC released its 2020 annual report showing that last year’s operating income totaled 27.47 billion yuan, a year-on-year increase of 24.8%, gross profit was 6.53 billion yuan, a year-on-year increase of 42.4%, and net profit was 4.33 billion yuan, a year-on-year increase of 141.5%. Successfully turned a loss into a win.
The substantial increase in the performance of listed companies in the semiconductor industry stems from the current strong market demand.
In its annual report analysis, SMIC stated that related products such as the Internet of Things, cloud computing, and big data have gradually entered a mature stage from a ramp-up period, and demand has entered a stage of steady growth.
The fields of artificial intelligence, driving assistance, robots and drones are also in a period of active iterative development, gestating new opportunities for the global integrated circuit industry.
Consumer groups' acceptance of various types of remote office, teaching and data centers has increased.
The demand for related terminal smart devices, wireless wearable devices and data center equipment is improving.
Yang Haiyan, an analyst in the electronics industry of Shenwan Hongyuan Securities, said that from the demand side, the demand for semiconductor chips is increasing; from the supply side, it is difficult to launch new capacity in the short term.
Especially since the second half of last year, automakers have begun to resume production, and chip companies that previously reduced production due to the epidemic have difficulty ensuring adequate supply.
"Today, the number of chips in an ordinary family car ranges from dozens to more than 100." Yang Haiyan told reporters.
Many factors have further highlighted the contradictions in the production capacity of the semiconductor industry, which has also caused the industry chain leaders to raise prices one after another on the one hand, and accelerate the expansion of production capacity on the other.
It is understood that since April 1st, SMIC has raised prices across the board, and the overall price increase of its products has been between 15% and 30%.
Rockchip also issued a price adjustment notice, starting April 1st to increase the price of chip products.
In addition, chip companies such as New Clean Energy, Silan Micro, and Chipeng Micro have also announced price increases one after another.
In addition to price increases, semiconductor processing companies have increased capital expenditures and invested in new production capacity.
“However, the semiconductor production expansion cycle is relatively long.” Yang Haiyan said, “It is difficult to quench the thirst of the near future. It takes at least one and a half years for new production capacity to expand to production. It may take half a year from production to ramp-up. "
From the perspective of the industry, the overall boom in the chip industry is good for my country's chip industry to grab orders and improve overall strength, and the process of domestic substitution is expected to accelerate.
Leading RF chip company Zhuo Shengwei mentioned in its 2020 annual report, “The company has seized the development opportunities of 5G and domestic alternatives, invested a lot of resources, enriched and optimized the product structure, continued to improve the launch of 5G RF front-end products, and promoted the marketization of module products. Progress. During the reporting period, the company’s products were widely recognized on the client side, further expanding the market share of products.”
Its latest first quarter performance forecast shows that in the first quarter of this year, the net profit is expected to be 481 million to 496 million yuan, a year-on-year increase of over 200%.
Zhuo Shengwei is not the only company that achieves high performance growth. From the perspective of the production process of semiconductor chips, it can be roughly divided into three steps: design, manufacturing, packaging and testing.
In the manufacturing and packaging and testing links, it covers two aspects of semiconductor equipment and materials.
Guosheng Securities Electronics Industry Analyst She Lingxing said that the current industry chain raw materials silicon wafers, IC substrates, lead frames, as well as foundry, packaging and testing costs have all seen price increases, indicating that related companies in the industry chain will directly benefit from the increase in orders. Increase in gross profit margin.
As the capital expenditures of leading companies begin to land, companies related to the upstream industries such as semiconductor materials and equipment are also expected to usher in a large number of orders.
Our reporter Liang Rui