What is a Goreth fabric? The advantages of Goreth fabrics
- Release on :2018-06-12
Electronics industry: Focus on investment opportunities brought by incremental innovation, independent research and development, strong demand, and rising prices
In the second half of 2018, we are optimistic about the opportunities created by the innovation of smart phones, the smooth supply and demand of LED chips, and the strong market demand for small-pitch displays, independent research and development in the semiconductor industry, and rising passive component prices.
Smartphones: The sales season is gradually approaching, and innovation brings incremental markets
By the end of February 2018, the demand for smart phone market was gradually booming, and brand manufacturers began to actively stock up. TrendForce expects Q2 global smartphone production is expected to increase by 5%. In May 2018, domestic shipments amounted to 37.836 million units, an increase of 1.2% year-on-year. The downward trend stopped and shipments started to pick up. The sales season in the second half of the year is gradually approaching.
In the case of smart phone shipments becoming saturated, innovation will become the main driving force. Innovative technologies such as 3D sensing, full-screen, AMOLED flexible screen, dual camera, glass backplane/3D glass, wireless charging, under-panel fingerprint recognition, 5G, and artificial intelligence are gradually being incorporated into smartphones. Innovation will increase the unit price of the product and/or penetrate the existing stock market. The performance of companies that have mastered relevant innovations will be expected to achieve sustained growth.
Semiconductor: The global market continues to grow, and independent research and development in mainland China continues to advance
WSTS data show that 2018Q1 global semiconductor sales increased by 21% year-on-year. In April, global semiconductor sales reached US$37.6 billion, an increase of 1.4% from the previous quarter and a year-on-year increase of 20.2%. The year-on-year growth rate exceeded 20% for 13 consecutive months.
According to CSIA data, sales of China's integrated circuit industry in 2018Q1 were 115.29 billion yuan, a year-on-year increase of 20.8%, and the industry still maintained a high-speed growth trend.
LED: balance of supply and demand in the chip market, small gap display continues to grow
Chinese LED chip manufacturers continue to expand production, and the proportion of output value in the world continues to increase. Customer resources and orders are gathered in large leading companies and the industry concentration is further enhanced. The overall competition is gradually changing to a healthy one, and market competition will be more orderly. The domestic large-scale LED manufacturer technology has already reached the world advanced level, at the same time has the relative cost advantage, the comprehensive superiority in the international competition is increasingly obvious. According to AVC data, the supply and demand ratio of domestic LED epitaxial wafers is approximately 1:1.06 in 2018, and the market supply and demand are nearly balanced.
AVC data shows that sales of small-pitch LEDs in the 2018Q1 Chinese market totaled 1.27 billion yuan, a year-on-year increase of 65%, and the average price of the products also increased. It is estimated that the market scale will reach RMB 6.71 billion in 2018, an increase of 52.2% year-on-year, and the year-on-year growth rate of 24.5% in 2022. The overall market will still maintain a relatively rapid growth. Chinese manufacturers have grown rapidly in the small-pitch market.
Major companies continuously increase the development of Mini LED and Micro LED. In the future, new LED display technology will inevitably cause greater impact on existing display applications.
Passive Components: Increasing Prices Bring Investment Opportunities
New applications have increased demand for MLCCs, Japanese manufacturers have shifted to high-end products such as vehicles, and slower progress has been made in the expansion of production, leading to higher prices due to insufficient supply of products. The fastest release of new production capacity is to reach 2018Q4, and the industry is expected to continue throughout the year.
Due to the imbalance in supply and demand caused by Japanese manufacturers' shift to automotive use and increased demand, chip resistance prices have risen. Short-term supply and demand are still difficult to ease, and there is still room for growth. Aluminum electrolytic capacitors have also started to rise due to growing demand, environmental protection, and rising raw materials. The trend of price increase before inductance is not obvious. Recently, due to rising costs, some manufacturers started to increase prices. Mainland China-related companies are expected to achieve improved performance through single orders and price increases.
Investment advice and recommendation
Suggestions in the field of smart phones: Ouffy Technology (camera module, 3D sensing module, under-panel fingerprint identification module), Crystal Optoelectronics (infrared cut filter, narrowband filter), and letter-dimensional communication (5G antenna, Wireless charging, filter), Lixun precision (acoustics, wireless charging, antenna), Han's laser (laser equipment), Shen Tianma A (full screen), Lansi technology (glass cover).
Semiconductors: North China Chuang (semiconductor equipment), Zhao Yi innovation (memory), Yang Jie technology (discrete devices).
LED field: Liad (small pitch LED), Chau Ming technology (small pitch LED).
Passive components: Fenghua Gaoke (MLCC, resistors, inductors).
Downstream applications are less than the expected risks; R&D progress is less than expected; risks of falling smartphone shipments.