Hong Kong Stock Concept Tracking | Taiwan Semiconductor's 3nm supply shortage triggers a surge in semiconductor prices. Institutions say the semiconductor industry may be emerging from the trough (with concept stocks attached)
Taiwan Semiconductor's 3nm supply shortage triggers a semiconductor price hike. Seven tech giants including NVIDIA, AMD, and Intel will gradually adopt Taiwan Semiconductor's 3nm process. Qualcomm Snapdragon 8 Gen 4 has started to increase in price, expected to exceed $250. Analysts at TF International Securities predict that the SM8750, which will be mass-produced in 2H24, will be priced 25%-30% higher than the current flagship chip SM8650, at $190-200. Institutions suggest that the semiconductor industry may be emerging from the trough, with industry sentiment expected to gradually improve
According to related media reports, due to the poor yield of Samsung's 3nm GAA process, TSMC's 3nm FinFET process currently dominates the industry, but due to insufficient capacity, upstream IC design companies have begun to raise prices.
The seven global tech giants (NVIDIA, AMD, Intel, Qualcomm, MediaTek, Apple, and Google) will successively adopt TSMC's 3nm process. For example, Qualcomm Snapdragon 8 Gen 4, MediaTek Dimensity 9400, Apple A18, and M4 series will all be built using the N3 family. Among them, the Qualcomm Snapdragon 8 Gen 4 based on the N3E process has already started to raise prices, with a significant increase of 25% compared to the previous generation, expected to exceed $250.
On the evening of June 13, Tianfeng International Securities analyst Guo Mingchi released a report stating that the SM8750, which will be mass-produced in 2H24, is priced about 25%-30% higher than the current flagship chip SM8650 at $190-200, mainly due to the adoption of TSMC's latest and more expensive N3E process.
Benefiting from the AI-driven demand for high-end smartphones, the shipment volume of SM8750 is expected to grow by a high single-digit percentage compared to SM8650.
Institutions point out that on the one hand, the semiconductor sector has recently seen frequent changes, thanks to the support of the National Large Fund Phase III. On the other hand, since the beginning of this year, new quality productivity has been included in important reports, becoming a core keyword. The subsequent technology innovation policies are worth looking forward to. Currently, technology centered on hard technology/domestic substitution is at a similar point to the beginning of "Mid-term Evaluation" in early 2023. Hard-core technology stocks are expected to usher in a wave of valuation reshaping, namely "Tech Evaluation". With the support of national policies, global market recovery, demand growth driven by AI technology, and other factors, the semiconductor industry may emerge from the bottom, showing strong momentum in subsequent development, and the industry's prosperity is expected to gradually improve.
Leading companies in the semiconductor-related industry chain:
Hua Hong Semiconductor (01347): Morgan Stanley stated that Hua Hong Semiconductor's wafer fab utilization rate has exceeded 100%, so it may raise wafer prices by 10% in the second half of the year. The bank upgraded Hua Hong Semiconductor to overweight and raised its target price by about 65% to HK$28.
SMIC (00981): The company's gross margin declined more than the growth in customer orders. Sales in the first quarter of 2024 increased by 4.3% quarter-on-quarter, exceeding the expected "flat to 2% growth per quarter". The first-quarter gross margin was 13.7%, exceeding the expected 9%-11%. The company's capital expenditure in 2023 was approximately RMB 52.84 billion, and the capital expenditure in 2024Q1 was $2.235 billion, with an estimated total annual capital expenditure of about $7.5 billion in 2024, with about 80% used for equipment expenditure. The high investment will bring pressure on the profit end. In 2024, the company is expected to break away from the downturn along with the semiconductor industry chain, achieve steady and moderate growth under the combined effect of gradual improvement in customer inventory and continuous recovery in mobile and internet demand, with sales revenue growth not lower than the average of comparable peers, expected to grow in the mid-single digits year-on-year Shanghai Fudan (01385): The company has four series of products including tens of millions of gates FPGA, billions of gates FPGA, tens of billions of gates FPGA, and PSoC. It possesses the full-process independent intellectual property FPGA supporting EDA tool ProciseTM, making it a leading domestic supplier of programmable device chips. As one of the very few domestic FPGA suppliers in the industry, the company will fully benefit from the demand volume brought by the localization of downstream markets, with broad development prospects