Technological innovation drives industry development, and the semiconductor industry remains the main line of technology investment for the next 3-5 years. From a global perspective, the global semiconductor industry has been following the law of spiral upward in the past decades, and major technological changes are the intrinsic driving force for sustained industry growth. Automotive intelligence, VRAR, AIOT, cloud computing, etc. will drive the semiconductor industry into a new upward spiral, with the latest WSTS forecast that the global chip market will be worth $552.9 billion (+25.6%) in 2021 and increase to $601.5 billion (+8.7%) in 2022.

From a domestic perspective, although the eventful impact increased the uncertainty of the domestic semiconductor industry, at the same time, also further highlights the need and urgency of the independent controllability of the domestic semiconductor industry chain. The main logic of the development of the domestic semiconductor industry is independent and controllable. The current logic of the development of the domestic semiconductor industry has not changed (domestic substitution, industry trends, policy funding), the semiconductor industry is still the main line of investment in science and technology for the next 3-5 years.

Two main investment lines of semiconductor industry in 2022: Automotive semiconductor, semiconductor equipment and materials.

The upstream and downstream of the semiconductor industry chain is very long, involving many companies. They believe that the subsequent semiconductor sector will show a differentiation trend, and the semiconductor segment leaders with strong performance cashing ability, good industrial trend and excellent competition pattern will lead the semiconductor sector to continue to rise.

The main line of semiconductor investment next year can be analyzed from two perspectives:

From the perspective of terminal application development trend, the current automotive industry is in an era of great change. The development of automotive electrification, intelligence and networking is the general trend. Automotive semiconductor is at the intersection of automotive and semiconductor, which is expected to stand on the historical process and usher in a historic development opportunity.

From the perspective of independent control, the equipment and materials upstream of semiconductors are the basis for the development of semiconductor industry. It is particularly important to realize independent control in the field of semiconductor equipment and materials. At present, a number of leading companies of semiconductor equipment and materials with excellent quality have emerged in China, We believe that the domestic leader in the subdivided field of semiconductor equipment and materials is expected to seize the opportunity of domestic substitution for gold and realize rapid rise. Automotive semiconductors we mainly recommend power IGBT, MCU, on-board storage and ower semiconductor.

Key recommendation: Star semi guide, new Jieneng

Star semi guide: the company's vehicle specification SiC module has been designated by many vehicle enterprises and Tier1 customers. As of September 8, 2021, the on hand order of vehicle specification level sicmosfet module is RMB 343 million, and the delivery period is from 2022 to 2023. At present, all vehicle specification SiC modules and outstanding orders designated by the company use imported chips. After mass production of non-public equity investment projects, the company will have self-developed vehicle specification sicmosfet chips to further improve the supply guarantee ability and product competitiveness of the company's vehicle specification SiC modules.   

New clean energy: with the help of Huahong's 8 + 12 inch advanced characteristic technology, the company's IGBT products have made breakthroughs in photovoltaic inverter, energy storage inverter (UPS), industrial control, electric tool motor drive, household appliance frequency conversion control and other industries, and cooperated with leading customers in the industry. In addition, the company's IGBT module has obtained some customer orders since the launch of relevant products in 2021Q2.