Semiconductor sector set off a stop tide ETF rose nearly 9% where is the logic of the violent rebound? Analysts push these three main lines

SMM Network News: November 9, chip stocks broke out again today, the plate set off a rising tide. By the close of trading in the morning, Xinpeng Weiwei, Chengtian Weiye, Jie Weidian, Tongyi shares, Zhaogi Technology and other 20% trading limit. More than 10% of stocks rose to 31, and the plate as a whole rose more than 5.5%.

With the overall rise of chip stocks, semiconductor ETF also rose to a high, has risen nearly 9%, once close to the limit.

It is worth mentioning that the last time the semiconductor ETF rose to the limit on July 6, the market opened a wave of Mavericks.

In fact, the semiconductor sector has been adjusted for a long time since July, and the recent frequent changes have led to a sharp rise today. What is the hard-core logic behind it? How much room to rise?

The wafer factory faces the crisis of shortage of fully loaded chips.

In the past two months, many original chip manufacturers have pursued orders one after another, resulting in full upstream wafer factories and closed testing capacity, supply falling short of demand, and prices have risen one after another.

It is reported that the original delivery time of some TI chips has been extended to 26 weeks. At present, TSMC, UMC, World Advanced, LSMC and other wafer foundry factories are fully booked for the fourth quarter, and the advanced and mature process capacity has been fully booked by customers in the first half of next year.

In addition, according to industry media reports, iPhone 12 has been out of stock since it was launched. At present, the tight production capacity of the wafer end has spread to the downstream chip field, it is understood that MOSFET, panel-driven IC, power management IC are also obviously out of stock and rising prices.

According to the research report of Guoyuan Securities on November 1st, due to the tight production capacity of 8-inch wafers, a number of wafer foundry and IC designers issued price increase announcements or account adjustment expectations. OEM price increases are transmitted to IC designers. Mainland China, such as Fuman Electronics and Jichuangbei, and Taiwan Lianyong and Duntai have raised product prices one after another.

It believes that the shortage of 8-inch production capacity has led to the determination of the trend of contract manufacturing and product price increases, and the leading domestic 8-inch contract manufacturing enterprises have directly benefited, so it is recommended to pay attention to Huarun Wei. The increase in product prices has led to a rapid increase in the profits of the leading companies of power devices. It is recommended to pay attention to Xinjianeng, Starr Semiconductors and Yangjie Technology.

Semiconductor giant strikes at overseas factories

At a time when there is already a shortage of production capacity in domestic fab factories, the collective strike in overseas fab factories has once again aggravated this impact.

Local time, according to foreign media reports, after the ST management decided not to increase the wages of all employees, the three main trade unions within the French ST (CAD, CFDT and CGT) have begun to strike at all French ST factories.

It is worth noting that on 28 October local time, French President Macron announced that the national blockade policy would be launched again on 30 October, at least until 1 December, and assessed the need to extend the blockade policy on the basis of its effect. The move could further affect production at ST's three plants in France.

Industry insiders said that at present, under the circumstances that ST's own production capacity is already tight, it has encountered a strike and a second blockade in France under the novel coronavirus epidemic, and its chip production may be more adversely affected, and the subsequent shortage may be more serious and may last for a long time.

Pan Xun, an analyst at Tianfeng Securities, said in a research report on November 8 that in terms of medium-and long-term dimensions, the boundary factor for the growth of the expansion semiconductor industry still exists. It is believed that "domestic substitution" is the current plate logic, and "growth" under "domestic substitution" is better than "cyclical" consideration.

Based on the dual logic of the upward superposition of domestic substitution in the semiconductor industry, Pan recommends that investors continue to grasp the three main investment lines:

(1) value the repair of closed test / manufacturing of heavy assets under the pull of demand. The performance of major companies in the semiconductor asset-heavy closed-end testing / manufacturing industry began to pick up, and it is optimistic that the closed-end test / manufacturing of heavy assets will lead to valuation repair due to the ROE rebound driven by demand.

Key recommendation: SMIC / Changdian Technology / Wentai Technology / Sai Microelectronics / Huanxu Electronics / San'an Optoelectronics.

(2) the structural change of demand of manufacturing equipment companies is the main line of investment which is still supported by short / medium / long-term logic. The industrial trend of manufacturing in China remains unchanged, and capital expenditure on domestic fab construction continues to advance. In terms of investment, the second phase of the large Fund focuses on upstream equipment and materials, downstream applications and other fields.

Recommended attention: North Huachuang / Watt Gas / to Pure Technology / Shengmei Semiconductor / Jingmei Electronics / Tiantong Co., Ltd.

(3) downstream demand is improving in an all-round way. 5G, automotive semiconductors, IoT and cameras bring new growth points, and the storage cycle is expected to usher in an inflection point. It is expected that the value of 5G smartphones will increase this year, with the highest growth proportion of RF front-end, and the cost and number of related devices will be increased.

At the same time, at the base station end, the number of base stations and the cost of a single base station will both rise, and the superposition will bring the growth of market space.

Key recommendation: Zhaoyi Innovation / Shengbang Co., Ltd. / Beijing Junzheng / Zhuoshengwei / Su trial.