[hot stocks] Semiconductor sector continued to be hot and closed up 1.85%

A shares got off to a good start today, with the Prev closing up nearly 1 per cent to recover the 3500-point mark; the Shenzhen Composite Index rose more than 2 per cent; and the gem index rose nearly 4 per cent to stand firm at the 3000-point mark. The turnover between the two cities exceeded 1 trillion yuan. On the plate, stimulated by the news, Tesla's concept rose and stopped, and funds continued to hold together spirits, lithium batteries, military industry, photovoltaic and other trend plates. In addition, pork, steel, shipping, non-ferrous and other plates rose one after another. Banks, real estate and other weight plates led the decline. Among them, the semiconductor plate all the way up, by the end of the day, the semiconductor plate reported 1090.53, an increase of 1.85%.

At the beginning of 2021, there has been no lack of news that enterprises are planning to put into production semiconductor-related equipment. Wentai Technology's "12-inch vehicle gauge-level semiconductor wafer manufacturing project" started on the 4th in Lingang New area, China (Shanghai) Free Trade pilot Zone (referred to as Lingang New area). According to Wentai Science and Technology, the project has a total investment of 12 billion yuan (RMB) and is expected to produce 400000 wafers a year. The packaged and tested power device products can be widely used in automotive electronics, computing and communication equipment and other fields. On August 19, 2020, as China's first 12-inch vehicle specification-level semiconductor automation wafer manufacturing center, the project signed a contract to be located in the new area of Hong Kong.

Yesterday, Chinachem Technology released its industrial fund Dongyang Kaiyang Science and Technology Innovation and Development Partnership (Limited Partnership) (hereinafter referred to as "Dongyang Kaiyang"), according to the foreign investment announcement of Dongyang Kaiyang on December 30, 2020. "Investment Agreement" and its subsidiary documents were signed with Fu Zhiwei, Shanghai Bokang and Xuzhou Bokang. Chinachem Technology invests in Xuzhou Bokang through Dongyang Kaiyang and will cut into the field of photoresist, a key material for semiconductors.

In addition, the two major domestic IGBT manufacturers have also accelerated their listing. A few days ago, BYD announced that the company's board of directors meeting examined and passed the "motion on planning the spin-off listing of the holding subsidiary," and the board of directors agreed with the company's holding subsidiary BYD Semiconductor Co., Ltd. (hereinafter referred to as "BYD Semiconductor") to raise the matter of spin-off and listing. And authorized the company and BYD semiconductor management to start the preparatory work for the listing of BYD semiconductor. Similarly, CRRC Times Electric also announced on the Hong Kong Stock Exchange that the company had submitted application materials, including the A-share prospectus, to the Shanghai Stock Exchange for the proposed issuance of A-shares, which had been accepted and reviewed in accordance with the law.

Guoxin Securities pointed out that the automobile industry is developing in the direction of electrification, intelligence, digitalization and networking, which directly leads to the increase of silicon content in cars. As one of the key carriers of automobile electrification, the demand value of automobile semiconductors has increased exponentially. It is estimated that the total semiconductor value of pure electric bicycles is more than 70% higher than that of traditional cars. At present, the degree of localization of automotive gauge-grade power semiconductors is not high, and the substitution space is large. The top five companies of automotive power semiconductors are mainly foreign-funded enterprises such as Infineon and STM, with a global market share of 63%. Technically, power semiconductors are in the process of upgrading from second-generation Si to third-generation SiC/GaN and other substrate materials, and the products are still innovating continuously. While the overall domestic market demand is growing rapidly, technological innovation continues to upgrade, bringing better opportunities for domestic enterprises to overtake at corners.

Looking forward to the semiconductor industry, according to Credit Suisse's "China Semiconductor Autonomy Survey report; present and Future Outlook" report, the compound growth rate of China's semiconductor manufacturing industry from 2019 to 2024 is expected to grow at an annual rate of 17%. The change of the global industrial chain pattern will also promote the competitiveness of China's semiconductor industry chain enterprises. AVIC Securities believes that with the second wave of the global epidemic and the continuation of the home-office model, superimposed by factors such as the recovery of the automotive electronics market and the increase in the penetration rate of 5G mobile phones, the overall prosperity of the semiconductor industry is expected to maintain an upward trend in the first half of 2021. Under the dual role of policy dividend and market growth, China's semiconductor industry is expected to usher in high-quality development.