Semiconductor Industry In Mainland China Enters Accelerated Development Period

Benefit  from the central to local government's support for the semiconductor  industry continues to expand, especially the scale of the second phase  of large integrated circuit funds will be as high as 200 billion yuan,  industrial funds through the leverage effect to push investment to an  unprecedented height, and guide The  benign allocation of capital to the capital-intensive semiconductor  industry has also contributed to the improvement of the concentration of  semiconductor production factors and the improvement of production  relations. Obviously, the basic conditions for the growth of policies,  talents, strategies, market depth, technology, capital, etc. are all in  view. The semiconductor industry’s technological dividend is significant,  and its conversion efficiency is accelerating. It also represents that  the development of the mainland semiconductor industry has entered an  accelerated period since 2018.

In  fact, in the first half of 2018, it is estimated that the annual growth  rate of mainland IC industry sales is still in a double-digit growth  trend, mainly due to the inventory adjustment in the mainland smartphone  market since the second half of 2017, which was already the first in  2018. After the mid-season, it was over, especially at the end of February  at the MWC show, Android camp again actively launched new machines to  snatch Apple's market share.

What's  more, in the era of post-smartphones, micro-innovation in mobile phones  continues to increase semiconductor demand in the stock market, coupled  with the gradual convergence of automotive electronics, artificial  intelligence, and the Internet of Things, driving the growth of the  semiconductor industry and even the special application of integrated  circuits in China. While  chip manufacturers Bitland, Kennan Minzhi, and Yibang have achieved  high growth in their own performance, their orders for packaging and  testing have also grown rapidly. In particular, the current suppliers of  bittern mainland packaging and testing are Changjiang Electronics  Technology Co., Ltd. Rich Microelectronics and Huatian Technology, so the mainland has  mastered the bump + flip-chip packaging and packaging technology  manufacturers are in the mining machine chip investment to benefit from  the rapid growth.

If  the performance of important manufacturers is concerned, SMIC will  still face certain pressures on its business indicators in the short  term, mainly due to the decline in the average OEM price on mature  processes and the large amount of R&D investment and equipment in  the process of catching up with advanced processes. The  impact of depreciation, but because the company is the leading  semiconductor manufacturer in mainland China, the long-term will surely  enjoy the dividends of the policy. What's more, after the company's  product structure and physical adjustment transition period, the  long-term SMIC's earnings growth effect will appear. The  most important indicator of the company's turning point is whether 28nm  HKMG process technology will achieve a breakthrough in 2018, which will  enable the annual capacity utilization rate to climb to a normal level.  In addition, whether the company can successfully mass-produce 14nm  process in 2019, Both are the focus of follow-up market observation.

(The author is an associate researcher of the Institute of Economics and Production of the Taiwan Economic Research Institute)