The semiconductor sector is still in a state of continued prosperity. Since the second half of 2020, the semiconductor industry has been out of stock, the production capacity of 8-inch wafer factories has continued to maintain a high level, and the products of contract manufacturing, design and closed testing companies have increased, and demand exceeds supply to drive the industry upwards. At the same time, the growth rate of global semiconductor sales remained high. According to the Semiconductor Industry Association of America, global semiconductor sales reached US $50.58 billion as of March 2022, a year-on-year growth rate of 23% and more than 20% year-on-year growth for 12 consecutive months.

Domestic substitution in the semiconductor field continues to accelerate, and domestic manufacturers are expected to usher in rapid development. From the perspective of the IC market, according to the IC Insights forecast, the self-sufficiency rate of the Chinese market will increase by 4.5 percentage points to 21.2% in 2026 compared with 2021. From the medium-and long-term trend, the rise of design enterprises will stimulate the demand for supporting manufacturing and closed testing, and the promotion of demand for manufacturing and closed testing will promote the relevant manufacturers to actively expand production and actively introduce domestic equipment and materials. Domestic equipment and material manufacturers are also expected to usher in a period of rapid development.

CSI refers to the semiconductor index: mainly the design plate, reflecting the overall performance of the semiconductor industry. The CSI Semiconductor products and equipment Index (H30184) selects the semiconductor products and equipment industry stocks from the CSI sample stocks to reflect the overall performance of the industry stocks. Among the component stocks of the index, the weight ratio of the semiconductor design sector is the largest among the three major indices related to the semiconductor concept in the market, at more than 50%.

CSI semiconductor index valuation is currently in the low quantile, the downlink space is limited, and the overall allocation value is high. As of May 18, 2022, the PE of the CSI semiconductor index is valued at 41 times and the valuation quantile is 4.27%. The latest valuation level of the index is located on the left side of the corresponding valuation distribution since the beginning of 2014, indicating that with the pullback of the index, the current valuation has been adjusted to a historically low position. At the same time, using the consistent expected fundamental growth data of the industry index, the dynamic valuation range of the index is constructed, and then the matching degree between the index valuation and the future performance growth rate is measured. In the latest section (20220518), the current PE_TTM of the all index semiconductor index is 41, which is lower than the valuation point (PE_FY1) 58 considering the fundamental expected growth rate in the coming year, indicating that the current valuation level is more reasonable. There is no growth rate of future fundamentals of overdraft, and the current quantile of PE_TTM is only 6.7% in the valuation range, and the probability of further downside of the index is relatively limited. At the same time, considering that the sector is still in a relatively prosperous degree, the overall allocation value is relatively high.

Guolian Anzhong card refers to semiconductor ETF (512480): issued the earliest semiconductor ETF, the overall share continues to grow steadily. The fund was established on May 8, 2019, with a maximum rate of return of 208.38% after listing, and a cumulative rate of return of 87.2% as of May 18, 2022. After entering 2020, the volatility of the semiconductor sector has increased. As of May 18, the net value of fund restoration units has been adjusted to the price level of February 2020, which is also close to the low point of 2021, which is worth paying attention to.

Risk hint: the objective statistics and analysis of the indexes and funds mentioned in this report do not constitute a recommendation for the product; the semiconductor boom is not as expected; the uncertainty caused by geopolitics and the epidemic situation of COVID-19; the progress of semiconductor localization is not as expected.