Taiwanese semiconductor manufacturer ASE or the A-share listed company accounts for nearly 30% of the global packaging and testing market. According to reports, Zhang Qiansheng, chairman of ASE, the world's leading packaging and testing manufacturer, revealed in an interview with

Taiwanese semiconductor manufacturer ASE or A-share listing has a global packaging and testing market share of nearly 30%

According to reports, Zhang Qiansheng, chairman of ASE, the world's leading packaging and testing manufacturer, revealed in an interview with the media that in response to the mainland's efforts to develop semiconductors and direct To obtain more abundant funds in the mainland and expand ASE's packaging and testing layout, ASE Semiconductor plans to integrate multiple mainland subsidiaries into one, or establish a new company and apply for listing on mainland A-shares. Among the top 10 IC packaging and testing foundries in the world in the first half of 2018, ASE ranked first in the first half of 2018. In addition to USI, among A-share listed companies, Shennan Circuit is a qualified supplier of ASE; Changchuan Technology has formed a good cooperative relationship with ASE.

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Northern Huachuang (individual stock data operation strategy stock diagnosis)

Northern Huachuang: benchmarking application materials, exploration The way to the rise of domestic equipment

Northern Huachuang 002371

Research institution: Southwest Securities Analyst: Liu Yan Writing date: 2018-06-28

Similar points: timely mergers and acquisitions, complete equipment types, and customers covering many leading semiconductor companies. Northern Huachuang and Applied Materials are the leaders in semiconductor equipment in China and the world respectively. They have a complete range of equipment, covering key processes such as oxidation, cleaning, PVD, CVD, etching, etc.; with high-quality customer resources, Northern Huachuang supplies BOE, SMIC , LONGi and other leading Chinese semiconductor companies supply equipment, and Applied Materials’ main customers are global leading semiconductor companies such as Samsung Electronics, TSMC, Micron, Intel and so on. From the perspective of growth trajectory, both Northern Huachuang and Applied Materials have grown through continuous mergers and reorganizations. Northern Huachuang was formed by the strategic reorganization of Seven Star Huachuang and Northern Microelectronics to achieve resource integration and complementary advantages. In 2018, it successfully integrated Akrion cleaning resources to further expand the cleaning machine market. Since its establishment, Applied Materials has acquired a number of well-known semiconductor equipment companies in Israel and Italy, resulting in the company's continuous expansion and gradually complete business scope. Northern Huachuang's R&D expenses have remained above 20% of operating income for many years, and in 2016 this figure reached 46%. Applied Materials invested US$1.774 billion in R&D in 2017, with R&D expenses accounting for 12.2% of revenue. The difference between

: Applied Materials has entered a mature stage and enjoys the dividend of high global market share; Northern Huachuang is temporarily in a growth stage and benefits from the increase in the domestic market. After 40 years of development, Applied Materials has entered a mature stage and has become the world's leader in semiconductor equipment, with its global market share basically maintaining above 20%. The global integrated circuit equipment investment scale from 2018 to 2020 is approximately US$65 billion. Applied Materials will stably have a revenue scale of US$13 billion in integrated circuit equipment and fully enjoy the stock dividends of the global semiconductor market. Compared with Applied Materials, Northern Huachuang is still in the growth stage and its revenue scale is extremely limited. However, the rapid growth of the domestic semiconductor market and the rapid increase in the equipment self-sufficiency rate have brought double dividends to Northern Huachuang. Domestic semiconductor equipment started late, but its development speed is extremely rapid. The gap between 14nm etching equipment and the international advanced level has been reduced to 2-3 years.

benchmarks applied materials and explores the way for the rise of domestic equipment. First, increase investment in research and development and improve product performance. In 2016, the total investment of 28 domestic manufacturers was less than a quarter of the R&D investment of one Applied Materials company. They should fully rely on government financial support to continuously improve R&D levels. Second, give full play to cost advantages and improve service quality. In terms of mature process equipment, domestic equipment manufacturers have obvious cost advantages, and domestic integrators will increase the pace of localization and substitution of semiconductor equipment. In terms of post-service services such as equipment maintenance, updates, and upgrades, domestic equipment manufacturers can give full play to their local advantages, provide more thoughtful services, and increase customer stickiness.

profit forecast and investment advice. The EPS from 2018 to 2020 is expected to be 0.67 yuan, 0.94 yuan, and 1.35 yuan respectively. Considering the high prosperity of the semiconductor equipment industry in which the company is located, the company maintains a "buy" rating as a scarce target in the industry.

Risk warning: The integrated circuit equipment industry is subject to risks such as cyclical fluctuations or slower than expected business growth.

| Date: 2018-07-19

The semiconductor industry is booming, and the discrete device market should not be underestimated. In 2017, global semiconductor sales exceeded US$400 billion for the first time, reaching US$408.691 billion, of which discrete devices (D-O-S) US$68.502 billion, a year-on-year increase of 10.1%, accounting for approximately 16.8% of the semiconductor market share. Among them, the sales of discrete devices in the Chinese market were nearly 39 billion US dollars, a year-on-year increase of 10.56%. Compared with the global power semiconductor application field, China's power semiconductor applications are still relatively low-end, but it also means that with the strengthening of R&D technology capabilities, there will be a lot of room for domestic substitution in the future.

Power semiconductors are in short supply, and the call for price increases has been sounded. On the demand side, the demand for power semiconductors from new energy vehicles and charging piles, the photovoltaic market, and consumer electronics is exploding. However, the production capacity of power semiconductors on the supply side has not increased. European and American manufacturers have continued to withdraw from the mid- to low-end market. Coupled with the shortage of upstream wafers, power semiconductors are in short supply. Power semiconductors are experiencing price increases, but delivery times continue to be extended. The shortage of power semiconductors will continue in the short term.

Yangjie Technology, the leader in discrete devices, has taken advantage of the rising prices. Yangjie Technology is an outstanding manufacturer of vertical integration of the industrial chain (IDM) in the field of discrete devices. The company's revenue and profits have grown steadily in recent years, and the proportion of semiconductor power devices in its operating revenue has always been no less than 80%. The company currently accounts for 30% of the world's photovoltaic diode production capacity, and is actively deploying high-end markets such as new energy vehicles, charging piles, photovoltaic micro-inverters, and automotive electronics. It will usher in revenue and profit growth amid the rising price of power devices. Explosive growth.

profit forecast and investment rating: We estimate that the company's operating income from 2018 to 2020 will be 1.926/24.98/3.167 billion yuan, and the net profit will be 3.57/466/594 million yuan, respectively, and the corresponding PE will be 37.9/29.1/22.8 respectively, giving a "buy" into” rating.

Risk warning: The prosperity of power semiconductors is not as good as expected, and the domestic substitution of power semiconductors is not as good as expected.

| Written by Wang Jianwei Date: 2018-07-05

The operating income of the three main categories of products continues to grow. In 2017, the company's operating income from integrated circuits, discrete device products and light-emitting diode products were 1.058 billion yuan, 1.147 billion yuan, and 505 million yuan respectively, an increase of 14.03%, 16.79%, and 19.91% compared with the same period last year. Integrated circuits, discrete devices, and light-emitting diode related products increased significantly compared with the same period last year.

insists on improving the IDM model and building core competitive advantages. In the past two decades of development, Silan Microelectronics has adhered to the path of "integration of design and manufacturing" and built core competitive advantages in multiple product technology fields, especially the development of high-voltage and high-power special integrated circuits and semiconductor power through the IDM model. It features devices, modules, MEMS sensors, etc., forming a comprehensive strength that combines design and technology.

actively taps potential to promote further release of production capacity. In 2017, the company's subsidiary Silan Integration Company produced a total of 2.3099 million 5-inch and 6-inch chips, an increase of 11.32% over the same period last year. A total of 57,100 chips were produced on the 8-inch line, which to a certain extent alleviated the tight production capacity of Silan integrated chips. In December 2017, the company signed an agreement with the Xiamen Municipal Government to plan and build two 12-inch 90-65nm specialty process chip production lines and a 4/6-inch compatible advanced compound semiconductor device production line in Xiamen, which is expected to be significantly improved in the future. Capacity supply.

maintains a "buy" rating. The company adheres to the IDM model and actively builds characteristic process chip production lines and advanced compound semiconductor device production lines, which will further expand the company's production capacity and help the company accelerate its layout in the semiconductor industry chain. The company's EPS from 2018 to 2020 is expected to be 0.19/0.28/0.33 yuan respectively, corresponding to PE of 61/41/35 times respectively, maintaining the "buy" level.

Risk warning: Industry competition has intensified and production capacity has not increased as expected.

| Written by Sun Yuanfeng and Zhang Lei Date: 2018-07-11

’s business continues to expand, and its performance is in line with expectations. Compared with the digital IC industry, the growth of the analog IC industry has better stability. At the same time, the expansion of product categories and application fields will bring relatively stable and certain growth to the company. During the reporting period, the company actively expanded its business, product sales increased, corresponding revenue increased year-on-year, and performance growth was in line with expectations.

The analog IC industry is booming, and the company is expected to continue to benefit. Analog IC has a broad application field and is widely used in communication systems, consumer electronics, automotive applications and industrial control. According to statistics from ICInsights, the global analog IC market size reached US$54.5 billion in 2017. It is expected that the average annual compound growth rate of the analog IC market will reach 6.6% from 2017 to 2022, exceeding the average annual growth rate of the entire integrated circuit market by 1.5 percentage points. The fastest growing industry in the integrated circuit field. The vast market space and high growth rate provide sufficient space for the company's development. The product system of

is continuously enriched, and the advantages of independent core technologies are clear. After years of R&D investment, the company has formed a number of independent core technologies, continuously launched new products to form a systematic product structure, and continuously improved its industry leading advantages. According to the announcement, the company currently has more than 1,000 products in 16 categories. Relying on its strong independent research and development and innovation capabilities, the company has developed a number of core technologies in the two fields of high-performance signal chain analog chips and high-efficiency and low-power power management analog chips over the years, and has launched "diversified and complete products". A series of products with the characteristics of ", segmentation".

We believe that the company's independent core technology and systematic products have formed the company's two major industry advantages and created barriers to market competition for the company. At the same time, the continuously expanding product categories and application areas have also become a solid foundation for the company's performance growth. The

application market is growing, and new opportunities are gradually emerging. The company continues to maintain steady growth in traditional fields. At the same time, the emergence of new applications such as the Internet of Things, smart homes, new energy, and artificial intelligence has also provided new development opportunities for analog chips. The company keeps up with market development trends and actively deploys and puts a variety of products into use in emerging fields such as smart home, artificial intelligence, human-computer interaction, sensors, infrared ranging, and shared bicycles. We believe that the emerging markets that continue to emerge provide new market space for analog IC. With the gradual maturity or technological upgrade of the AI, 5G, automotive electronics, and Internet of Things industries, the new market space for analog IC will become a powerful driver of the company's future growth. .

investment advice: Buy -A investment rating. We estimate the company's net profits from 2018 to 2020 to be 122 million yuan, 155 million yuan, and 191 million yuan respectively, with growth rates of 29.7%, 27.6%, and 22.7% respectively. Considering the scarcity and leading position of the company's analog chip business, we gave it a 2018 PE of 70 times and a six-month target price of 107.72 yuan.

Risk warning: The macro economy is down, the development of the semiconductor industry is lower than expected, and the implementation of industrial policies is lower than expected.