On October 18, the semiconductor sector continued to rise, and it took off even more in the afternoon.

By the close, Kaidi Quartz, Hualing Co., Ltd. were up by 30CM, Jiahua Tech, H.B. Fuller, shanghai bright power semiconductor co., ltd., Hanwuji-U, Ke Ma Technology, Jin Hua Micro, semiconductor manufacturing international corporation and other stocks reached the daily limit up by 20CM.

Related sectors such as lithography, advanced packaging, third-generation semiconductors, chip concept, etc., have shown significant increases.

Positive sentiment has been ignited.

With a series of major financial policies released at the end of September, the A-share market has ushered in a wave of rising trends, among which the semiconductor sector is particularly favored by investors. Despite the recent market volatility and adjustments, this sector remains relatively strong. From September 24th to date, the A-share semiconductor sector has accumulated almost a 57% increase.

This morning, the National Bureau of Statistics released data showing that the GDP for the first three quarters of this year was 94,974.6 billion yuan, a year-on-year growth of 4.8% when calculated at constant prices.

Sheng Laiyun, Deputy Director of the National Bureau of Statistics, pointed out that favorable conditions for stabilizing and boosting the economy are increasing. In the fourth quarter, the economy will continue the stabilization and recovery trend that appeared in September, enhancing confidence in achieving the expected annual economic growth rate of around 5%.

In addition, at the policy level, the People's Bank of China today introduced a policy of share repurchase and increased loans for stockholding. Starting today, 21 national financial institutions can issue related loans to eligible listed companies and major shareholders, and apply for a refinancing loan from the People's Bank in the first month of the next quarter, with an initial quota of 300 billion yuan, an interest rate of 1.75%, and a term of 1 year.

Market analysis believes that this policy is beneficial for increasing market liquidity or supporting the development of the semiconductor industry. As the semiconductor industry is a high-tech industry, it has a large demand for funds.

Furthermore, these positive economic expectations and policy support have also increased market confidence in the semiconductor industry, driving stock prices higher.

Many listed companies are expected to perform well in the third quarter report.

From a fundamental perspective, with inventory reduction, recovery in end-market demand, and the push of the AI trend, the semiconductor market is showing a trend of recovery in 2024.

A report released by the Semiconductor Industry Association (SIA) of the USA showed that in August of this year, the global semiconductor sales reached a record high of $53.1 billion, a year-on-year increase of 20.6% and a month-on-month increase of 3.5%. This data has achieved five consecutive months of growth. In China, semiconductor sales in August grew by 19.2% year-on-year.

Against the backdrop of a gradually clearer industry outlook, semiconductor companies have generally improved their performance.

TSMC recently announced its financial report, showing that revenue for the third quarter was 759.69 billion New Taiwan dollars, a 39.0% year-on-year increase, and a 12.8% increase from the previous quarter; net income was 325.26 billion New Taiwan dollars, a 54.2% year-on-year increase, and a 31.2% increase from the previous quarter. The gross margin reached 57.8%, significantly surpassing the market's expected 54.8%.

Furthermore, TSMC has raised its annual revenue growth target to about 30%, further demonstrating the company's optimistic outlook for the industry's future development.

In the A-share market, several listed companies have disclosed performance forecasts for the first three quarters, with over 10 companies expecting an increase in performance. Among them, JHICC, Will Semiconductor, and Rockchip Electronics are expected to lead in net income growth.

JHICC is expected to achieve operating income of 6.7 billion to 6.8 billion yuan in the first three quarters, a growth of 33.55% to 35.54% compared to the same period last year; and achieve a net profit attributable to shareholders of 0.27 billion to 0.3 billion yuan, a year-on-year increase of 744.01% to 837.79%.

The company stated that with the industry's recovery gradually picking up, its production capacity has been consistently at full capacity since March this year. Starting from June this year, it adjusted the outsourced prices for certain products, which benefited the company by steadily increasing its operating income and product gross profit margin.

In addition, Will Semiconductor expects revenue for the first three quarters to be between 18.741 billion and 18.991 billion yuan, a year-on-year increase of 24.27% to 25.93%; and achieve a net profit attributable to the mother company shareholders of 2.267 billion to 2.467 billion yuan, a year-on-year increase of 515.35% to 569.64%.

Rockchip Electronics expects to achieve revenue of approximately 2.16 billion yuan in the first three quarters, a year-on-year increase of about 48.50%; and achieve a net income attributable to the owners of the parent company of 0.34 billion to 0.36 billion yuan, a year-on-year increase of 339.75% to 365.62%.

Looking ahead, the semiconductor industry's recovery trend remains significant. Ju Long, Vice President of SEMI International Semiconductor Organization and President of the China region, recently stated that in 2024, the global semiconductor market is generally showing signs of recovery. From the current situation and future trends, the outlook for the semiconductor industry remains promising.

He expects that the global semiconductor market is expected to achieve a growth of 15% to 20% this year, with the market size reaching 600 billion USD.

Tianfeng Securities believes that "a series of incremental policies" may boost the demand for end electronic consumer products and drive the industry chain beyond expectations. In reviewing the history of semiconductors, the start of a major cycle often accompanies unpredictable major events. We believe that if the domestic incremental policies this time effectively stimulate consumption, it is expected to raise the industry's semiconductor demand expectations, serving as one of the driving forces in this cycle. We are optimistic about the performance of domestic semiconductor demand after the incremental policies.