(Report producer: Hua Fu**, Yang Zhong, Dai Jingjing, Zhao Xinyi).
Market performance of the electronics industry and segments in 2023
The A-share SW Electronic Index outperformed the CSI 300 and SZSE Component Index. From the beginning of 2023 to November 17, SW Electronics +955%, CSI 300 Index -823%, SZSE Component Index -1023%, the A-share electronic index has always outperformed ** since March. It is worth noting that since September 2023, although the CSI 300 and SZSE Component Index have fluctuated and declined significantly, the electronics sector has grown against the trend and performed well. The electronics industry ranked fifth among the 31 first-class industries. From the beginning of 2023 to November 17, the SW Electronics Index has risen and fallen (+9.55%) ranked 5th among the 31 Shenwan first-class industries, ranking high. From the beginning of 2023 to November 17, a total of 11 sectors in the electronics industry sub-sector have risen and fallen positively. The top 5 sub-sectors were: Optics (+32.).56%), integrated circuit packaging and testing (+27.).49%), panel (+25..)82%), consumer electronics components and assembly (+21.).53%), printed circuit boards (+19..)55%）。
Overview of the performance of the electronics industry and its segments
From the perspective of the total revenue of the industry and the net profit attributable to the parent company, taking the listed companies in the Shenwan electronics industry sector as a sample for statistics, the total revenue of listed companies in the electronics industry in the first three quarters of 2023 will reach 215341.1 billion yuan, an increase of 11 percent year-on-year36%, and the net profit attributable to the parent company was 7934.1 billion yuan, a year-on-year decrease of 1074%。Overall, the operating income of the electronics industry will begin to pick up in 2023, but the profit side will be temporarily under pressure.
From the perspective of corporate performance, 23% of companies in the industry lost money, an increase of 10 percentage points from 13% in 2022, and the proportion of companies that turned losses into profits was 4%, a slight increase from 3% in 2022. Among the remaining companies, 25% of the companies achieved year-on-year growth, down about 20 percentage points from 45% in 2022, and 48% of the companies experienced a decline in performance, an increase from 39% in the same period last year. It can be seen that the performance of companies in the electronics industry will be temporarily under pressure in 2023, waiting for the economy to bottom out.
The valuation level of the electronics industry and sub-sectors
From the perspective of the overall valuation, from the beginning of 2023 to November 17, the valuation of the SW electronics industry continued to rise. As of November 17, 2023, the SW Electronics Index PE (TTM) is 4867 times, outperforming the CSI 300 and the Shenzhen Component Index. From the perspective of the valuation of sub-sectors, from the beginning of 2023 to November 17, the average PE of semiconductors, other electronics, components, optics and optoelectronics, consumer electronics and electronic chemicals were respectively. 29 and 4991 times. At present, the PE of the electronic subdivision sector exceeds the average value of the above range.
The economy may pick up, independent and controllable is urgent, and the subdivisions are full of bright spots
In its "300mm Fab Outlook Report to 2026", SEMI pointed out that after the decline in 2023, global front-end 300mm fab equipment spending will begin to return to growth from 2024. Global 300mm fab equipment spending is expected to grow 12% to $82 billion in 2024 and 24% to $101.9 billion in 2025, and is expected to reach an all-time high of $118.8 billion in 2026. Global 200mm fab equipment spending is also expected to accelerate in 2024. Strong demand for high-performance computing, automotive applications, and increased demand for memory will drive spending growth.
The latest update to SEMI's 300mm Fab Outlook Report to 2026, released on March 14, 2023, lists 366 facilities and production lines, of which 258 are in operation and 108 are planned to start construction in the future. At the same time, Semi pointed out that TSMC, UMC, Intel, SMIC, GF, Samsung, SK hynix, Micron, Kioxia, Infineon, Texas Instruments, etc. have capacity layout plans in North America, Europe, Asia and other regions, and it is expected that 82 new factories and production lines will be mass-produced from 2023 to 2026.
AI opens the era of computing power, and welcomes innovation opportunities in multiple links
The development of chiplet is an ecological change that revolutionizes the semiconductor industry, and the chiplet market has a huge space for development in the future. In 2022, the global chiplet market size will reach 31$1.4 billion, according to marketThe US estimates that the global chiplet market size will be 33$2.9 billion, which will reach 52US$2.8 billion, with a compound growth rate of 781%。There are many large manufacturers at home and abroad vying to deploy chiplets. In March 2022, more than a dozen semiconductor industry giants, including AMD, Intel, TSMC, Samsung, and ASE Group, announced the establishment of the Chiplet Interconnect Standard (UCLE) Alliance to jointly promote the standardization of Chiplet interface specifications. The standardization of chip interconnects is expected to bring about cost reduction and acceleration of chiplet industrialization process in the future. At present, the domestic chiplet industry has also made some progress. Tongfu Microelectronics, Changdian Technology and other domestic packaging and testing manufacturers have the mass production capacity of chipletsXinyuan Microelectronics and Winbond Electronics have successively announced that they have joined the UCLE Alliance, which is expected to drive further breakthroughs in the domestic chiplet industry chain.
MR: It is expected to achieve a breakthrough in consumer electronics innovation, and Vision Pro leads the industry trend
In terms of hardware, Apple's MR headset Vision Pro is equipped with dual computing power chips M2 R1, 3P Pancake optical solution, Micro OLED display screen, eye + hand tracking interaction and other core technologies.
Based on the top technology, the product can achieve innovative functions such as high accuracy of eye tracking, suspended typing, iris scanning, FaceTime virtual human body rendering, and smooth switching of VR AR mode, bringing a new experience of immersion, interactivity and comfort, with obvious technical advantages.
Edge AI: AI supports terminal hardware, and consumer electronics may welcome growth opportunities
Global smartphone shipments have bottomed out, and there is still room for penetration improvement in emerging markets. Smartphone shipments are still declining due to macroeconomic pressures and weak demand for consumer electronics. According to IDC**, global smartphone shipments in 2023 will be only 11500 million units, a year-on-year increase of **47%。In the era of stock competition, future smartphone shipments may be expected to gradually recover with the economic recovery, and IDC expects global smartphone shipments to increase by 4% year-on-year in 20245%, with a CAGR of 1 over the next five years7%。Although emerging market demand is closely related to inflation levels, and high inflation usually dampens consumer demand for smartphones, according to GSMA statistics, the smartphone penetration rate in sub-Saharan Africa in 2022 is 43%, and Statista data shows that the smartphone penetration rate in India, Nigeria, Bangladesh, and Pakistan is still below 50% in 2022. In the long run, the emerging smartphone market represented by Africa and South Asia will still fully enjoy the dividends of population and the switch from feature phones to smart phones.
Folding screen mobile phones: product features continue to iterate, and the scale of shipments grows rapidly
In recent years, folding screen mobile phones have sprung up in the smartphone market, and sales have continued to increase. According to IDC data, from 2022Q3 to 2023Q3, folding screen mobile phones grew against the trend in the poor environment of consumer electronics, of which the sales volume in 2023Q3 reached 19650,000 units, an increase of 90% year-on-year. Among them, although Huawei's sales ranking in the mobile phone market has declined, it is still "far ahead" in the market share of folding screen mobile phones.
The intelligent driving system is the left wing of the rapid development of automobile intelligence
According to Gaogong Intelligent Vehicles**, by 2025, the penetration rate of L1 and L2 intelligent driving will increase rapidly to about 60%, the penetration rate of L2+ L3 intelligent driving will steadily increase to about 20%, and the penetration rate of L1-L3 intelligent driving will reach 80% by 2025. The function of the intelligent driving controller is to connect to sensors such as cameras, lidars, and IMUs, and fuse, recognize, and classify the environmental information of each sensorThen, combined with map positioning, vehicle driving path planning and decision-making are carried out, so as to achieve precise control and automatic driving of the vehicle. The high-end upgrade of intelligent driving systems is expected to bring about an increase in the volume and price of domain control, SoC chips and sensors, which is also another driving force for the growth of the industry market scale. It is estimated that the scale of the front-installed L1-L3 intelligent driving industry is expected to increase from 30.2 billion yuan in 2021 to 86.2 billion yuan in 2025, with a CAGR of up to 30%.
The intelligent cockpit system is the right wing of the rapid development of automotive intelligence
In-vehicle HUD system, including image source, optical mirror, glass raw material supplier, as well as map, navigation and in-car entertainment software system. AR-HUD (Augmented Reality Head Up Display), which is a combination of augmented reality and head-up display, is a technology that projects rendered elements in the real world. AR-HUD has a longer projection distance than traditional HUD, and can display ADAS auxiliary information in addition to the speed and navigation information on the instrument. The installed capacity and penetration rate of HUD in China have increased rapidly. In 2022, the installed capacity was 1.5 million units, with a CAGR of about 62%. The HUD penetration rate also increased from 0 in 20163% to 6 in 20224%。According to Guanyan Tianxia data**, the HUD market size is expected to reach 317 in 2025400 million yuan, CAGR (2022-2025) is 52%.
Intelligent hardware is ready, and the era of Internet of vehicles has come
With the application of 5G technology, V2X (Vehicle to Everything) is a new generation of information and communication technology that connects vehicles to vehicles (V2V), vehicles to roads (V2I), vehicles to people (V2P), and vehicles to the Internet (V2N). V2X builds a smart transportation system by organically linking people, vehicles, roads, clouds and other transportation participants. As part of the vehicle-road collaboration industry chain, the entire V2X system can be divided into cloud, road-end and vehicle-end. The latter involves on-board equipment and intelligent transportation systems, road infrastructure construction, data processing and management, service providers, and vehicle manufacturing and technology providers. These links need to cooperate and develop in tandem to promote the realization and application of vehicle-road coordination. The vehicle-road collaborative industry chain is divided into the basic layer, the platform layer and the application layer. The basic layer is mainly equipment and terminals, mainly including OBU at the vehicle end and RSUs at the road end, cameras, radars, cloud computing, high-precision maps, software systems, etc.
The penetration of high-voltage connectors is accelerated, and high-frequency and high-speed connectors are a blue ocean
Automotive connectors can be divided into low-voltage connectors, high-voltage connectors, and high-frequency and high-speed connectors. Among them, high-voltage connectors and low-voltage connectors carry out high-voltage current and low-voltage current transmission;High-frequency and high-speed connectors for data transmission, and the connectors that transmit audio and video signals not only need to ensure the mechanical reliability of the vehicle environment, but also need to consider the integrity of high-frequency transmission signals and electromagnetic interference.
According to Bishop & Associates**, China's automotive connector market will increase to 446.8 billion US dollars, domestic substitution space is broad. With the continuous penetration of domestic electric vehicles, the development of the on-board high-voltage connector industry chain is relatively mature, and the localization rate is relatively high. However, the localization rate of China's high-speed connector market is low, and the ECT technology of domestic enterprises is developing rapidly. According to Huajing Industry Research Institute, in 2021, in China's automotive high-speed connector market, Rosenberg, Tyco, and Amphenol ranked among the top three in terms of market share, accounting for a total of 92% of the market share, of which Rosenberg accounted for about 50% of the Chinese market, and domestic enterprises ranked fourth in ECT Technology, with a market share of 7%.
AI servers become the engine of computing power
Large models drive the growth of computing power demand. Since OpenAI's release of ChatGPT in 2022 has pushed large language generation models and AI to new heights, major tech giants around the world have embraced AIGC (AI-generated content). Large models usually contain hundreds of millions of parameters and require a lot of computing power. According to the OpenAI team, the computing power required to train a GPT-3 model with 174.6 billion parameters is about 3640 pflop S-day. Large AI models can be used for training and inference, mainly in the cloud (data center side) and edge side (terminal side).
As the engine of computing power, the growth of computing power demand will usher in the rapid growth of AI server demand. According to IDC statistics, the global AI server market size is expected to be $21.1 billion in 2023 and reach 317 in 2025$900 million, with a CAGR of 22 for 2023-20257%。In terms of procurement volume, according to Trendforce, as of 2022, the total share of Microsoft, Google, Meta, and AWS, the four major cloud service providers in North America, in global AI server procurement, has reached about 66%, and Microsoft and Google have a global share of 19% and 17%, respectively.
The AI chip is the brain of the AI server
The AI server adopts the GPU architecture, which is suitable for large-scale parallel computing. AI servers have evolved from traditional servers. Compared with general-purpose servers, AI servers are heterogeneous servers, which can be combined in a variety of ways, equipped with multiple GPUs, CPUs, and AI chips with large computing power, which greatly solves the shortcomings of traditional servers with insufficient computing power. The AI server uses the GPU architecture, which has many computing units and long pipelines, simple control logic, and eliminates the need for cache. Facing the typological system.
1. Large-scale data that is independent of each other, in an uninterrupted computing environment. In contrast, the CPU is occupied by caches and complex control logic, and commonality leads to complex internal structures, branching and interrupts that handle different data types.
AI chips are the core of AI server computing power. AI chips are the core of AI server computing power, also known as AI accelerators or computing cards, which are specifically designed to handle a large number of computing tasks in AI applications. According to the technical architecture, AI chips can be divided into GPU, FPGA, ASIC, and NPU. GPUs are general-purpose chips, ASICs are special-purpose chips, and FPGAs are in between, with semi-customization characteristics. According to the functional classification, it can be divided into training and inference chips. According to the classification of application scenarios, it can be divided into cloud and edge chips. With the emergence of more application scenarios such as AI PC, AI Pin, and AI Phone, the space for AI chips is expected to be further opened.
Passive components: the cycle has bottomed out, and domestic substitution continues to advance
Since 2017, the MLCC industry has experienced a supply-side driving cycle brought about by Japanese companies adjusting their product structure and withdrawing from the low-end market, as well as an upward cycle of consumption and automotive electronics demand increased under the catalysis of the epidemic, and after 2021Q4, due to the weakening of the macro economy and the continued weakness of consumer electronics demand, the prosperity of the MLCC industry has declined. At present, the prosperity of the MLCC industry has bottomed out, the space for conventional material products is limited, and the utilization rate of manufacturers has rebounded, waiting for the demand to recover. There is a broad space for domestic substitution, and domestic manufacturers are accelerating the high-end of products. According to the statistics of the China Business Industry Research Institute, in 2021, the market share of Japanese companies was the highest, reaching 54%. The market share of China's MLCC industry is low, and there is a large space for domestic substitution, and domestic manufacturers continue to break through technical bottlenecks, increase investment in research and development of high value-added products such as vehicle specification grade and high capacity, and compete for the share of Taiwanese and Korean manufacturers.
PCB: Terminal demand drives the rise of PCB volume and price
In 2022, due to factors such as sluggish global economic growth and weak downstream demand, superimposed industry competition will intensify, PCB products** will be under pressure compared with the same period last year, and the prosperity of the PCB industry will decline. In the long run, the output value of the PCB industry will continue to grow steadily with the development of the electronic information industry, and the compound growth rate of global PCB output value from 2022 to 2027 will be about 38%, and the global PCB output value will reach about 983 in 2027$8.8 billion. From the perspective of subdivisions, servers, automotive electronics, and communications are the main driving forces for the growth of the PCB industry, with compound growth rates from 2021 to 2026. 43%。
This article is for informational purposes only and does not represent any investment advice from us. To use the information, please refer to the original report. ）
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