[hot stocks] SMIC's share price for mature process license rose sharply, and the demand for power semiconductors continued to be strong.

The three major indexes opened higher today, and all of them rose after the opening. The gem index broke through the previous high of 2915.95 points, the highest level since July 2015. On the disk, spirits and photovoltaic continued to be strong, followed by higher shipping plate. Among them, SMIC pulled up sharply, Hong Kong shares rose 10.29% to HK $22.50 in intraday trading, and A shares are now up more than 3% at 58.55 yuan.

Early in the morning, according to market rumors, SMIC has obtained a mature process license in the United States, and the news also said that the license for mature processes in the United States is issued in batches, with an one-time distribution of 40,000 to 50,000 pieces of equipment for production capacity. According to the Ji WeChat report, some people in the industry said that the news was true, according to its analysis: "to some extent, China and the United States need to find a balance at the scientific and technological level, and it is a matter of time to open mature processes to SMIC; and in terms of mature processes, including TSMC, they may be allowed to work for domestic chip manufacturers. In terms of advanced manufacturing processes, China may still face the situation of 'choking'. " Prior to this, on December 18, 2020, the US Department of Commerce BIS officially announced that SMIC and related entities would be included in the "entity list", explicitly rejecting the approval of SMIC's 10nm and below processes, and mature processes need to apply for permission one by one.

SMIC also rose yesterday with reports that SMIC was seeking talks with Dutch semiconductor equipment company Asma (ASML) on EUV lithography equipment with the help of Jiang Shangyi, the new vice-chairman. SMIC plans to use EUV lithography machine to produce chip products based on 7nm process technology. Earlier, SMIC announced that Jiang Shangyi had been appointed as vice chairman of the board, category II executive director and member of the strategy committee, effective from December 15, 2020.

Open source securities believe that as the development of advanced processes is blocked, SMIC has to focus on mature processes for the time being. Secondly, chips using mature processes such as radio frequency and power semiconductors benefit from the rapid development of downstream new energy vehicles, new energy power generation, security and other fields. At present, the wafer foundry industry is full of capacity, and some wafer factories have begun to raise prices. SMIC Q3 performance statement will point out that the company's order has reached 2021Q2. Therefore, SMIC is expected to vigorously develop a mature process. SMIC, the second phase of the National Integrated Circuit Fund and Yizhuang State Investment jointly contributed 5 billion US dollars to register SMIC Capital, plus 12-inch 28nm mature process wafer manufacturing also fully demonstrated the company's determination to continue normal operation in the future and the core supply chain of the mature process can be controlled independently.

At present, the demand for power semiconductors continues to be strong. Guohai Securities believes that power semiconductors are the core of power conversion and circuit control of electronic devices, and are widely used in communications, consumer electronics, industrial control and other fields. According to Yole data, the global market for power devices in 2019 is about US $17.5 billion. Thanks to the strong downstream demand for new energy vehicles, 5G base stations, and frequency conversion appliances, which are boosted by policies such as "new infrastructure" and third-generation semiconductors, fast charging heads, photovoltaic / wind power installations, UHV, and intercity high-speed rail transportation are also rapidly expanding the demand for power devices in many applications downstream of power semiconductors. Is entering a business cycle of rising volume and price. Excellent domestic enterprises continue to make technological breakthroughs and expand production capacity, and there are broad prospects for the development of power semiconductors in China.