The Zhitong Finance App learned that Minsheng Securities released a research report saying that the SEMICON China conference was held in Shanghai from March 20 to March 22. The exhibition had about 1,100 exhibitors and 4,500 booths. The exhibitors covered the entire semiconductor design, manufacturing, packaging, testing, equipment, materials, and key components industry chain. At this exhibition, the industry level was highly optimistic about the equipment investment boom in mainland China. It is recommended to focus on investment opportunities in the domestic semiconductor equipment sector. It is recommended to focus on: Qiandao Process Equipment Beifang Huachuang (002371.SZ), Zhongwei (688012.SH), Tuojing Technology (688072.SH), etc.; advanced back-end packaging equipment ASMPT (00522), Chipboard (688630.SH), etc.; equipment components, Zhengfan Technology (), Yingjie Electric (300820.SZ), etc. 688596.SH

The main views of Minsheng Securities are as follows:

SEMICON is large-scale, and new domestic equipment products are frequently produced

The SEMICON China conference was held in Shanghai from March 20 to March 22. The exhibition had about 1,100 exhibitors and 4,500 booths. The exhibitors covered the entire semiconductor industry chain, including design, manufacturing, packaging, testing, equipment, materials, and key components. The scale was unprecedented, highlighting the boom in investment in the semiconductor industry.

This time, many SEMICON domestic semiconductor equipment manufacturers are frequently selling new products:

Xinyuan Micro released the chemical cleaning machine KSCM300 and the SiC chipping chip all-in-one KS-S200-2S1b.

Chipset released an 8-inch wafer alignment and wafer bonding machine, which can be used in packaging processes such as anodic bonding and hot press bonding.

In addition, many domestic equipment manufacturers such as Beifang Huachuang, Zhongwei, Tuojing Technology, Microguide Nano, Shanghai Precision Measurement, Kaishitong, Jingyi Equipment, Zhengfan Technology, Xinlai Applied Materials, Fuchuang Precision, Yingjie Electric, Huafeng Measurement and Control, and Changchuan Technology participated in the exhibition.

Overseas equipment manufacturers gather to see the investment boom in domestic semiconductors

In addition to domestic manufacturers, many leading overseas equipment manufacturers actively participated in this exhibition to see the domestic semiconductor equipment investment boom.

In terms of advanced manufacturing processes, American Applied Materials (AMAT) held a briefing session for Chinese customers as an exhibition sponsor. America's KLA (KLA), Japan's Tokyo Electronics (TEL), and SCREEN Group (SCREEN) participated in the exhibition.

In terms of advanced packaging, Curriso Semiconductor (K&S) showcased a variety of dispensing and wire welding equipment; ASMPT displayed high-precision crystallization equipment.

Overseas manufacturers attach great importance to it, mainly due to continued high demand in the Chinese market in the past two years, leading global investment in semiconductor equipment. SEMI Global Vice President Ju Long said at the SEMICON press conference that due to the strong performance of the Chinese semiconductor equipment market that exceeded expectations, SEMI's forecast for the global semiconductor equipment market was adjusted from “negative growth of 10% to 14% in 2023” to “a slight contraction of 2% to reach 100 billion US dollars in 2023.” SEM I anticipates that the global semiconductor market will increase by about 10% year-on-year in 2024, global semiconductor wafer production capacity will increase by 6.4% in 2024, and total global semiconductor equipment sales will reach a new high of 124 billion US dollars in 2025.

Earlier, ASML, a leading global lithography machine company, also expressed an optimistic outlook on Chinese market demand at the 23Q4 conference. In 2023, ASML's business revenue in mainland China increased 149% year-on-year. ASML indicated that demand for mid-critical nodes (mid-critical nodes) and mature process lithographers in the Chinese market will continue to be strong in 2024.

The Dutch Prime Minister plans to visit China, and the supply of ASML lithography machines continues to increase

On March 23, media reported that Dutch Prime Minister Mark Rutte will visit China next week, and the two sides will discuss supply licenses for ASML's multi-billion euro lithography machine order.

As the world's leading supplier of lithography machines, ASML's revenue in mainland China reached 7.252 billion euros in 2023, an increase of 149% over the previous year, accounting for 26% of its total revenue. Since 2024, along with the continued high increase in semiconductor investment in mainland China, ASML lithography machine shipments have also continued to grow. According to data from China's General Administration of Customs, from January to February 2024, lithography machines were imported from the Netherlands to US$1,057 million, an increase of 256.1% over the previous year. The number of imported units reached 32 units, and the average import price also increased dramatically, from 10 million US dollars/unit in early 2023 to more than 30 million US dollars/unit since 2024.

Earlier, ASML also expressed an optimistic outlook on Chinese market demand in 2024 at the 23Q4 conference. ASML indicated that demand for mid-critical nodes (mid-critical nodes) and mature process lithography machines in the Chinese market will continue to be strong in 2024.

Minsheng Securities believes that the continued high increase in the supply of lithography machines will also help domestic wafer factory construction investment continue to grow. I am optimistic about investment opportunities in the equipment sector under the acceleration of production expansion.

Risk warning: The electronics industry cycle recovery falls short of expectations; industry competition intensifies; exchange rate fluctuations.