On October 21st, the A-share semiconductor sector saw many stocks surge. H.B. Fuller, Tech Semiconductors, Crystal China Micro, Star Tech, Zhuhai Aerospace Microchips Science & Technology, Dongxin Technology 20CM hit the limit up, while CETC Chips Technology Inc., Rockchip Electronics, and Shanghai Belling Corp.,Ltd. rose limit up.

Semiconductor Manufacturing International Corporation rose more than 8%, with the stock price reaching 107.76 yuan at one point, breaking through the historical milestone of 100 yuan for the first time, with a daily turnover of 27.4 billion yuan.

According to statistics from 'Star Daily News Board', based on today's (October 21st) closing price, the A-share semiconductor 'hundred yuan club' consists of 17 companies, with Cambricon having the highest stock price, closing at 444 yuan per share today.

Guosen Securities' research report on October 20th pointed out that as the market has formed a 'policy bottom', with strong expectations for fiscal easing and rising market risk appetite, the hard technology sector has become a leading sector in market consensus, embracing the dual characteristics of 'economic pro-cyclical' and 'new quality productivity' within the policy orientation of 'stabilizing growth and adjusting structure'. Semiconductors have become the industry sector with the highest consensus in the market.

▌Where is the industry recovery process at now?

Regarding the semiconductor industry itself, what specific stage has the industry's recovery process reached? How is the specific demand temperature? Perhaps the companies in the industry chain that are involved in it feel it the most. Therefore, the Star Daily interviewed several A-share companies.

A securities department official from Will Semiconductor stated to Star Daily reporters today (October 21), "In the first three quarters of this year, the company's industry order volume in the high-end smart phone market and the automotive market for autonomous driving applications is still good, at least maintaining a stable growth for the whole year."

In contrast, the RF chip factory Maxscend Microelectronics has a more "conservative" view, as stated by the company's securities department officials to Star Daily reporters, "Currently, the market demand seems relatively stable, but there are no specific expectations at the moment."

Analog integrated circuit design company 3Peak Incorporated experienced a revenue decline of over 17% in the first half of this year due to changes in product structure, price adjustments to cope with market competition, and other factors. A Star Daily reporter, in an investor capacity, learned from 3Peak Incorporated's securities department that since the second half of the year began, the average unit price of their product portfolio has remained relatively stable.

Furthermore, following the macroeconomic recovery and the gradual implementation of the national 'replace old with new' policy for industrial equipment, there might be a certain positive effect on the recovery of industrial market demand. In addition, in the general communications market, with 5G construction in the later stages, it is expected that demand will gradually return to a stable state in the second half of the year as client inventories are digested; for servers and optical modules, driven by AI application demand, they are growing rapidly and the growth trend is good.

It is worth mentioning that in just the past two weeks, at least two companies in the industry have issued price increase notices:

According to today's (October 21) media reports, due to the surge in AI demand, the large American chip manufacturer Marvell has issued a price increase notice, informing customers that from January 1 next year, prices for all products will go up.

Rockchip Electronics has also issued a price increase notice last week, deciding to adjust the prices of RV1109, RV1126, and RV1126K products starting from October 15, 2024, with a uniform price increase of 0.8 US dollars. The company explained that product costs have sharply risen, and the original prices were unable to meet supply demands.

Industry consolidation and technological innovation will become the main theme of the industry, and incremental policies are expected to drive the upward trend in the cycle.

It can be seen that many signs indicate that the overall domestic semiconductor industry is indeed warming up.

Angel investor and senior artificial intelligence expert Guo Tao stated in an interview with "Star Market Daily" that China's semiconductor industry may experience structural growth this year, with some areas such as high-end chips, automotive electronics, and artificial intelligence expected to maintain a relatively high growth trend. Some specific sub-sectors in the consumer electronics sector, such as mid-to-low-end smart phone chips, may grow less than expected or even decline. At the same time, industry consolidation and technological innovation will be the main theme, and companies will pay more attention to research and development investment and product upgrades.

In Guo Tao's view, the duration of the recovery and upward trend in China's semiconductor industry depends on various factors: "On the one hand, domestic policy support, continuous technological advancement, and increasing market demand will provide impetus for the industry's recovery; but on the other hand, issues like the instability of the global supply chain may also affect industry development."

Tianfeng Securities research believes that recently, a series of "comprehensive incremental policies" have been successively released, which may boost demand for end electronic consumer products and drive the industry chain beyond expectations. Reviewing the history of semiconductors, the start of a major cycle often accompanies unpredictable significant events. If the domestic incremental policy effectively stimulates consumer end demand, it is expected to raise expectations for semiconductor demand across the entire industry chain and become one of the driving forces for the upward trend in this cycle, bullish on the performance of domestic semiconductor demand after the incremental policies.