According to relevant media reports, due to the poor yield of Samsung's 3nm GAA technology, TSMC's 3nm FinFET process currently dominates the industry. However, due to insufficient supply, upstream IC design companies have begun to spread news of price increases.

The world's seven major technology giants (Nvidia, AMD, Intel, Qualcomm, MediaTek, Apple, and Google) will gradually introduce TSMC's 3nm process. For example, the Qualcomm Snapdragon 8 Gen 4, MediaTek Tianji 9400, and Apple A18 and M4 series will all be created using the N3 family, with Qualcomm Snapdragon 8 Gen 4 based on the N3E process leading the way in increasing prices, with a 25% surge in quotes compared to the previous generation, expected to exceed $250.

On the evening of June 13th, Guo Mingqi, an analyst at TF International Securities, released a report stating that the SM8750, which will be launched in 2H24, will be priced about 25-30% higher than the current flagship chip SM8650, at $190-200, due to its use of TSMC's latest and more expensive N3E process. Benefiting from AI-driven demand for high-end smartphones, SM8750 shipments are expected to grow by a high single digit percentage.

The semiconductor industry has recently seen frequent fluctuations, with the help of the country's National Large Fund Phase III. On the other hand, since the beginning of this year, new quality productivity has been written into important reports and has become a core keyword, with policies promoting technological innovation in the future. The current technology, which is characterized by hard technology/local production substitution, is at a point similar to the beginning of 2023, when hard technology stocks are expected to undergo a reshaping of valuation, i.e. a "tech-valuation". Driven by multiple factors such as support from national policies, global market recovery, demand growth driven by AI technology, etc., the semiconductor industry may emerge from the bottom and its development momentum is expected to be strong, with the industry's prosperity expected to rise step by step.

Leading corporations in the semiconductor industry chain:

Sector

Morgan Stanley stated that the wafer factory utilization rate of Hua Hong Semiconductor has exceeded 100%, so it may raise wafer prices by 10% in the second half of the year. The company upgraded Hua Hong Semiconductor's rating to overweight and raised its target price by approximately 65% to HK$28.

The company's gross margin declined more than the increase in customer orders. In the first quarter of 2024, sales increased by 4.3% quarterly, exceeding the expected "steady-to-2% growth". The gross margin in the first quarter was 13.7%, exceeding the expected 9%-11%. The company's capital expenditure in 2023 is about 52.84 billion yuan, and its capital expenditure in the first quarter of 2024 is 2.235 billion US dollars. It is expected that the total capital expenditure in 2024 will be about 7.5 billion US dollars, of which about 80% will be used for equipment expenditure. The depreciation brought by high investment will put pressure on profits. In 2024, the company is expected to get rid of the downturn together with the semiconductor industry chain, and achieve steady and moderate growth under the combined effects of gradually improving customer inventory and continuous recovery of mobile phones and interconnection demand. The year-on-year sales revenue growth rate is expected to be no less than the average of comparable peers and in the mid-single-digit growth rate.

Shanghai Fudan has tens of products in four major series of millions of gate FPGA, billions of gate FPGA, tens of billions of gate-level PSoC chips, and full-process independent intellectual property rights FPGA supporting EDA tools ProciseTM, which is a leading domestic provider of programmable device chips. As one of the few domestic FPGA suppliers in the industry, the company will fully benefit from the demand brought by downstream market localization, and has broad development prospects.