According to statistics, the combined revenue of listed power companies will be 44.3 billion yuan in 2023, accounting for about 21% of the global market share. Omdia predicts that the global power semiconductor market will grow to US$35.865 billion (about 260 billion yuan) by 2026. In the long term, domestic power manufacturers will compete head-on with international giants and have sufficient substitution space. In the short term, terminal demand will gradually recover season by season, supply-side relatively surplus with sufficient production capacity. However, in terms of the overall pattern, it will gradually optimize to head enterprises. Currently the power sector is at the historical valuation bottom.

Domestic power participates in global competition, has sufficient long-term space, and the sector's valuation is at a historical low.

Domestic power participates in global competition, and its products and technology have gone from "slow catching up" to "gradually leading", actively expanding overseas markets. In recent years, domestic power manufacturers have rapidly upgraded their technology and iterated their products, significantly narrowing the gap with international leading companies and even quickly replacing overseas leading companies in specific areas to become the core suppliers, forming an irreversible mainstream trend. In the field of diode/IGBT modules, domestic manufacturers have established strong moats, significantly increasing their global market share with sufficient substitution space, while actively expanding overseas markets using overseas brands or overseas factories. The proportion of overseas sales of leading companies is expected to further increase. In terms of MOSFET, the rapid production increase of AI servers provides incremental space, and there is sufficient substitution space for domestic MOSFETs.

The supply pattern of the IGBT module for automotive standards is gradually stabilized, and 2024 is the first year of mass production of domestic SiCMOSFET main drives.

The supply-side pattern of the IGBT module for automotive standards is gradually stabilized. After three years of terminal data statistics, auto companies are more inclined to head suppliers with stability and reliability as the advantages. The pattern of multiple suppliers due to shortage of goods will gradually concentrate on head enterprises. 2024 is the first year of mass production of domestic SiCMOSFET main drives. The 8-inch wire is gradually falling into place. It is expected that the groove-type SiCMOSFET will gradually catch up with international giants. Among them, performance indicators (including specific on-state resistance/short-circuit withstand time, etc.), production capacity (priority given to manufacturers with sufficient supply capacity), and high reliability are the focus of attention for terminal auto companies. Huajin Securities believes that leading enterprises with leading SiC module packaging capabilities, sufficient production capacity supporting capabilities, and high product reliability are expected to benefit fully.

Recommended targets: Yangzhou Yangjie Electronic Technology (300373.SZ) (dual-brand operating, actively developing overseas markets), StarPower Semiconductor (603290.SH) (leading in automotive IGBT, SiCMOS enters rapid production stage), China Resources Microelectronics (688396.SH) (leading domestic MOSFET, 12-inch production line, multi-category layout), Wuxi NCE Power (605111.SH) (emerging applications such as AI servers account for an increasing proportion), Xilinx Integration (688469 .SH) (8-inch SiCMOS production line progresses smoothly, providing a domestic automotive standard system solution for suppliers).

Risk warning: downstream demand is lower than expected, product homogenization leads to serious competition and lower-than-expected profitability, technology iteration is lower than expected, and so on.