The leading semiconductors both at home and abroad, such as Samsung and Will Semiconductor, have produced impressive business data. From these companies' descriptions of "noticeable improvement in downstream inventory", "recovery in terminal demand", and "a full order book", the industry's recovery trend can be seen. Analysts believe that the cycle improvement brought by AI and advanced computing has gradually become clear, and the global semiconductor cycle has just entered the growth stage under the influence of non-AI factors.
The wind of recovery has blown through the semiconductor industry. Many domestic and foreign semiconductor companies recently produced impressive business data, many of which saw explosive growth in net profit in the first half of the year/second quarter.
On the evening of July 5, Will Semiconductor announced that it is expected to achieve a revenue of 11.904 billion~12.184 billion yuan in the first half of the year, a year-on-year increase of 34.38%~37.54%; It is expected that the net profit attributable to the parent company in the same period will be 1.308 billion~1.408 billion yuan, a year-on-year increase of 754.11%~819.42%. Only in the first half of this year, its net profit has exceeded the annual levels of 2022 (0.99 billion yuan) and 2023 (0.56 billion yuan).
The company said that the market demand continued to recover in the first half of the year. Downstream customer demand has also increased. The company has promoted the optimization of product structure and supply chain structure, and the product gross margin has gradually recovered.
Montage Technology is expected to achieve a revenue of 1.665 billion yuan in the first half of this year, a year-on-year increase of 79.49%, and the net profit attributable to the parent company is expected to be between 0.583 billion and 0.623 billion yuan, a year-on-year increase of 612.73%~661.59%. Based on this calculation, the net profit attributable to the parent company in the second quarter of the year is expected to set a new quarterly high in history.
They said that since this year, the demand for the company's memory interface and module supporting chips has achieved a recovery growth, and some new products of AI "capacity" chips have begun to ship in volume, contributing new performance growth points.
On the same day, Samsung Electronics also released its unaudited preliminary financial report for the second quarter: Operating profit in the second quarter was 10.4 trillion won (approximately 7.54 billion U.S. dollars), far exceeding the expected 8.3 trillion won, and a year-on-year increase of 1,452%, which was the highest single-quarter operating profit since the third quarter of 2022; Revenue in the same period increased by approximately 23% year-on-year.
CLSA believes that the average price of memory chips has risen 15% due to the development of data centers and AI, which has helped Samsung's largest department turn around from the loss in the same period last year.
Another Korean chip giant, SK Hynix, has not yet disclosed its preliminary performance, but many analysts have given optimistic expectations. It is expected that the company's second-quarter financial report will exceed expectations and its target price has been raised. The median forecast value of 19 analysts compiled by the media on Thursday showed that SK Hynix's operating profit for the second quarter is expected to reach 5 trillion won, reaching the highest single-quarter level in six years.
The recovery warming trend has begun. The global semiconductor cycle has entered a growth stage under the influence of non-AI factors.
By extending the timeline, it can be seen that in the past two weeks, several semiconductor companies listed on the A-share market have produced relatively impressive business data.
On July 1, Verisilicon Microelectronics (Shanghai) Co., Ltd. announced that it is expected to achieve a revenue of 0.61 billion yuan in the second quarter of this year, a quarter-on-quarter increase of 91.87%, and a slight decline year-on-year.
On June 26, Espressif Systems announced that its net profit attributable to the parent company for January to May this year is about 0.119 billion yuan, a year-on-year increase of 123.51%.
On June 25, Hubei Dinglong announced that its net profit for the first half of this year is expected to be 0.201 billion~0.221 billion yuan, a year-on-year increase of 110%~130%.
On June 18, Bayi Storage is expected to achieve a revenue of 3.1 billion~3.7 billion yuan in the first half of this year, a year-on-year increase of 169.97%~222.22%; It is expected that the net profit attributable to the parent company in the same period will be 0.28 billion~0.33 billion yuan, a year-on-year increase of 194.44%~211.31%, turning losses into profits.
Nanxin Technology is expected to achieve a revenue of 1.232 billion~1.302 billion yuan in the first half of this year, a year-on-year increase of 86.51%~97.11%; It is expected that the net profit attributable to the parent company in the same period will be 0.203 billion~0.221 billion yuan, a year-on-year increase of 101.28%~119.16%.
In the months of April and May, Purui Technology achieved a revenue of approximately 0.338 billion yuan, a year-on-year increase of about 131%.
Qizhong Technology stated that it achieved a revenue of 0.774 billion yuan from January to May, a year-on-year increase of 38.91%; The net profit attributable to the parent company in the same period is 0.138 billion yuan, a year-on-year increase of 62.51%.
In the first one to two trading days after the disclosure of performance/business data, the stock prices of these companies rose to varying degrees, and Espressif Systems even recorded a daily limit increase of 20%.
Zhongtai Securities pointed out on June 30 that as the July performance period approaches, it is recommended to focus on sectors with relatively good Q2 performance. In the electronics sector, the inventory inflection point will appear in Q3 2023, and the profit inflection point has already emerged, as it gradually enters the consumption peak season in the second and third quarters. It is expected that performance will continue to improve, and downstream demand is expected to exceed expectations.
"The downstream customer inventory has significantly improved," "terminal demand has recovered," and "hand orders are full" -- it is not difficult to see from the above descriptions in the announcements of several companies that the recovery of the industry is already underway.
Minmetals Securities' report on July 5 believes that the focus at the current point in time is on the logic of cyclical recovery. The improvement of the semiconductor cycle brought about by AI and advanced computing has gradually become clear. In Q1 2024, the revenue of the pure wafer foundry turned from negative to positive, indicating that the global semiconductor cycle under the influence of non-AI factors has just entered a growth phase.
Analysts further pointed out that AI is the new technology driving this cycle, and destocking is the solid foundation for steady growth of the semiconductor industry. According to comparative analysis of the economic cycle and inventory cycle, the global and Chinese semiconductor cycles are in a transition period from passive destocking to active replenishment.
Of course, even if impressive financial data is reported, it may not necessarily please investors.
On June 26 local time, storage chip leader Micron released its third quarter financial report. Although the company's third quarter performance and fourth quarter guidance were better than expected, it still failed to meet investors' high expectations. Therefore, after Micron disclosed its performance after-hours on June 26, it once fell nearly 8% in the US stock market, and eventually recorded a 7.12% decline on June 27.
