The Zhitong Finance App learned that Galaxy Securities released a research report saying that recently, companies related to the power industry chain issued price increase letters to adjust the prices of related products. The average price increase level is about 10-15%. The bank believes that price increases for related products are expected to bring investment opportunities in the power industry chain. The bank believes that it is mainly driven by factors such as an increase in upstream costs. Relevant fabs, such as Taishengke and Hujing, have raised prices for wafer products, and some sealing and testing plants have also acted in connection with price increases, so cost transfer has become a necessary path for some power manufacturers to survive. With the gradual release of new production capacity for power devices over the next 24 years, the supply and demand pattern will be optimized over the long term. In the short to medium term, power devices will benefit from investment opportunities driven by price increases.

Investment suggestions: It is recommended to focus on investment opportunities where the power device industry chain has bottomed out and rebounded. It is recommended to focus on manufacturers such as Star Semiconductor (603290.SH), Times Electric (688187.SH), Macrotech (688711.SH), and Xinjie (), and packaging and testing manufacturers such as Ningbo Silicon Electronics (), and Changdian Technology (Sino). 605111.SH 688362.SH 688372.SH 600584.SH

Galaxy Securities's views are as follows:

The global prices of MOSFET and IGBT products are stable, and the prices of some domestic companies' products have increased.

According to Fuchang Electronics' 23Q4 latest product schedule, the delivery cycle of the world's leading power semiconductors declined slightly. The delivery period for low-voltage products was in the 8-54 week range, and high-voltage products were in the 12-54 week range. Some product numbers were still tight, but the overall delivery schedule moved downward. According to Xinzhi News, on January 14, Jiejie Microelectronics issued a “Price Adjustment Letter” to customers: Starting January 15, 2024, the unit price of the company's TrenchMOS product line increased by 5%-10%. The bank believes that the issuance of price increase letters by some domestic power manufacturers is mainly driven by factors such as an increase in upstream costs. Relevant fabs, such as Taishengke and Hujing, have implemented price increases on wafer products, and some sealing and testing plants have also acted in connection with price increases, so cost transfer has become a necessary path for some power manufacturers to survive. With the gradual release of new production capacity for power devices over the next 24 years, the supply and demand pattern will be optimized over the long term. In the short to medium term, power devices will benefit from investment opportunities driven by price increases.

Demand has increased slightly, and MOSFETs are still the main demand type.

Looking at the current demand for power devices, according to Yole's forecast, the penetration rate of industrial automation, communication technology, photovoltaics, and new energy vehicles will continue to increase, and power devices will maintain long-term growth. It is estimated that by 2026, the global power market will reach 26.274 billion US dollars, with a CAGR of 6.9%. In terms of product share, Yole predicts that power devices will be dominated by MOSFET, IGBT, and SiC by 2028, with market shares of 30%, 23%, and 19% respectively. Looking at short-term demand, photovoltaics and new energy vehicles will continue to increase. It is expected that the European market will continue to grow rapidly in 2024 for photovoltaic inverters, and domestic NEV companies will continue to invest in R&D of three-power systems.

The industry is in an undervaluation range, focusing on investment opportunities brought about by valuation restoration.

Looking at the valuation, at present, domestic power manufacturers generally value PE (ttm) in the 20-35 range. In the future, along with stable downstream demand and product structure optimization of related companies, the sector is expected to achieve valuation repair and growth in its own value. The bank suggests that the power sector maintain an optimistic attitude and continue to pay attention to changes in demand in the power sector that exceed expectations.

Risk warning: risk of insufficient demand; risk of fluctuations in the new energy industry; risk of increased competition.