Spend 50 billion! SMIC International moves in conjunction with Big Fund A-shares to sort out the list of beneficiaries

SMM News: a few days ago, SMIC also came to a big move, the second phase of the joint fund smashed 50 billion yuan to build 12-inch wafer manufacturing. In fact, it is an indisputable fact that the shortage of chips has become increasingly serious. Huang Chongren, chairman of chip contract manufacturer Li SMC, said that the current wafer production capacity has been incredibly tight. The agency says the expansion of wafer production will continue over the next four years, with monthly wafer production increasing by 35% by 2024.

SMIC teamed up with large funds to invest nearly 50 billion plus 12-inch wafer manufacturing.

On the evening of December 4th, SMIC announced that SMIC, the national integrated circuit fund II and Yizhuang Guotou will jointly set up a joint venture with a registered capital of US $5 billion and is prepared to invest US $7.6 billion, which is equivalent to a huge amount of RMB 50 billion to produce 12-inch integrated circuit wafers and integrated circuit packaging series.

The company believes that the establishment of a joint venture can meet the growing market and customer demand, help the company expand production scale, reduce production costs, improve wafer foundry services, and thus promote the sustainable development of the company.

In fact, SMIC and other domestic semiconductor enterprises have indeed reflected a relatively good trend in their operation in the past two years.

On the evening of November 11th, SMIC disclosed its first three-quarter report since landing on the company's board, saying that in the first three quarters, the company achieved operating income of 20.8 billion yuan, an increase of 30.2 percent over the same period last year, and a net profit of 3.08 billion yuan belonging to shareholders of listed companies, an increase of 168.6 percent over the same period last year. Revenue growth for the whole year is expected to be revised up to 23% to 25%, and the annual gross profit margin target is higher than last year.

Wanlian Securities pointed out that thanks to the application represented by AIoT spawned by 5G, the demand for electronic components and semiconductors is growing; at the same time, China's domestic substitution is accelerating and independent research and development capabilities continue to break through. SMIC, as the strength representative of chip foundry in China, is expected to accelerate its development.

Wafer capacity is unbelievably out of stock.

Since iPhone12 appeared on the market, the storm of out of stock of chips has spread wantonly in the field of consumer power supply, and it has become more and more intense. On November 30th, LSMC held a public briefing before opening the cabinet, and Chairman Huang Chongren said that at present, wafer production capacity has been incredibly tight, and customers' demand for capacity has reached a panic level. It is estimated that from the second half of next year to the second half of 2022, logic and DRAM markets will be out of stock to unimaginable levels.

According to international e-business information, the global wafer foundry capacity is in short supply, including TSMC, UMC, World Advanced, LSMC and other foundry factories with full orders in the fourth quarter.

The production capacity of advanced and mature processes in the first half of 2021 has been booked in advance. Due to the lack of 8-inch wafer production capacity, UMC has raised prices this year in response to the additional demand from IC design plants, and is expected to do so in an all-round way next year.

According to TrendForce data, it is estimated that the global wafer foundry output value will grow at a record high of 23.8% a year in 2020, breaking the peak of nearly a decade. According to SEMI, the expansion of wafer production will continue over the next four years, with monthly wafer production increasing by 35 per cent by 2024.

As for the investment target, Guoyuan Securities believes that the shortage of 8-inch production capacity leads to the determination of the trend of contract manufacturing and product price increases, and the domestic 8-inch contract manufacturing leading enterprises directly benefit, so it is recommended to pay attention to Huarun Weiwei. 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.

At the same time, it is recommended to pay attention to: through the product portfolio adjustment, to the high-end of the old power IDM leading China Microelectronics; compound semiconductor contract manufacturing leader Sanan Optoelectronics; high-power device quality company platform shares; product line rich IDM leading Shilan micro; high-voltage, high-power thyristor leading Perry shares.

Everbright Securities suggests to pay attention to: 1) China Resources Micro, Xinjie Neng, Starr Semiconductor, Wentai Technology (Anshi Semiconductor), Lion Micro, Yangjie Technology, Jet Micro Electric; 2) contract manufacturers Huahong Semiconductor and SMIC.