21st century business herald reporter Zhang sainan intern Li Hao Shanghai report recently, a number of semiconductor companies released 2023 interim results forecast, overall, the performance is still in the doldrums.

As of July 25, 34 companies in the-share semiconductor sector have disclosed their performance forecasts for the first half of the year. Specifically, only 7 companies have achieved pre-growth in performance, and the remaining 17 have pre-reduced and 8 have first losses., 2 continued losses.

when explaining the performance decline, many companies mentioned that "the global end market demand is weak and the semiconductor industry is in a downward cycle". From this point of view, after the semiconductor industry as a whole fell into a downturn for more than a year, there is still no particularly obvious turning point in performance.

Previously, market participants generally expected that the turning point of the semiconductor industry might come in the third quarter or the end of this year. Combined with reporters' research and institutional analysis, this turning point may be postponed to early next year.

Is it difficult to get out of the trough?

Among the 34 companies that have announced semi-annual reports, the number of companies with declining performance or losses has reached 27, compared with 14 of these 34 companies in the same period last year.

In addition to the increase in the number of declines, the overall decline in the industry can also be seen from the performance of the leader. For example, in the forecast performance of the first loss of enterprises, there is no lack of Tongfu micro-power (002156.SZ), Shilanwei (600460.SH) such leading companies.

according to the announcement, tongfu micro electric company expects a net profit loss of 0.17 billion -0.198 billion yuan in the first half of the year. it said that due to the influence of external economic environment and industry cycle fluctuations, the global semiconductor market is weak and the downstream demand recovery is not as expected, resulting in pressure on the business of sealing and testing, and the company's traditional business is also greatly affected.

Although there are industry reasons, the loss of Tongfu Micro Power also has special reasons for interference. The company explained that due to the appreciation of the exchange rate of the US dollar against the RMB by more than 5% in the second quarter of 2023, resulting in a large exchange loss, resulting in a reduction in net profit of about 0.203 billion yuan. If the impact of exchange rate fluctuations is excluded, the net profit in the first half of the year is positive.

Shilanwei expects a net profit loss of 50.37 million yuan. The main reason for the change in performance is the decline in the stock prices of Yu Neng Technology and Anlu Technology among other non-current financial assets held by the company, resulting in a loss of 0.225 billion yuan after tax from changes in fair value.

The company also mentioned the impact of external reasons. It said that the prosperity of the downstream general consumer electronics market is relatively low, resulting in a significant decrease in the shipment of some of the company's consumer products and a certain decline in their prices, which has caused certain pressure on the company's sales and profit growth.

judging from the decline in net profit, semiconductor sealing and testing leader huatian technology (002185.SZ) is expected to decline by 86.38-90.27 in the first half of the year, with a net profit of 50 million -70 million yuan. The company said bluntly that during the reporting period, the demand for products in the terminal market declined, the prosperity of the integrated circuit industry declined, the company's orders were not full, and the capacity utilization rate was insufficient.

In addition, Zhuo Shengwei (300782.SZ), Sanan Optoelectronics (600703.SH), Zhaoyi Innovation (603986.SH) and other sub-industry leaders have seen a decline in performance, and the decline is more than 50%. Zhuo Shengwei said that the slowdown in global economic growth has made the company's main downstream application smartphone market demand weak; Sanan Optoelectronics admitted that consumer demand has recovered slowly; Zhaoyi Innovation said that the overall performance of the consumer electronics market is sluggish, and the industrial market demand is not as expected. The overall decline in market demand is obvious, and product sales prices are under pressure.

Not only that, on the one hand, demand is sluggish and prices are falling, on the other hand, the semiconductor industry chain is also facing the pressure of inventory impairment.

San 'an photoelectric mentioned that it is expected that the company's inventory is mainly made up of traditional LED chips with a year-on-year increase of about 0.18 billion yuan. China Crystal Technology (003026.SZ) also conducted impairment tests on assets such as inventories, resulting in an increase in asset impairment losses during the reporting period and affecting net profit. Huiting Technology (603160.SH) had its first loss in the first half of the year, of which the impairment loss of inventory assets reached 0.17 billion yuan.

Unclear industry inflection point

Based on the above situation, the slowdown or even decline in performance growth is a common phenomenon in the semiconductor industry. Since the end of 2021, the downward cycle has continued to be worrying. Market participants are looking forward to when the industry can come out of the trough?

At the end of the first quarter of this year, a number of industrial chain companies told reporters in 21st century business herald that whether the industrial chain can recover as scheduled depends on the situation in the second quarter. Now, the second half or still not optimistic.

Recently, a reporter from 21st Century Business Herald called Weir (603501.SH) and Shanghai Belling (600171.SH) Securities Department as an individual investor to try to understand the market's views on the industry trend in the second half of the year. Relevant personnel of Weir said that after the company's inventory in the first half of the year decreased by about 0.42 billion US dollars, it has almost returned to a normal level, but there is no way to predict the situation in the second half of the year.

Shanghai Beiling said that the main reason for the company's first loss in the first half of the year was dragged down by non-recurring gains and losses. For the expectation of the inflection point of the industry, it said that it is necessary to integrate various factors. The current changes in national policies or industry environment are still unclear, and it is impossible to make judgments.

other statements of the integrated industry chain leader, the industry is still at the bottom.

SMIC (688981.SH) had said at its June shareholders' meeting, "Domestic mobile phone customers have driven an increase in domestic mobile phone sales, but the global supply of mobile phones is still down from last year. Mobile phones are the first round to enter the industry boom downward, and there is no obvious sign of stabilization so far, as the demand for all mobile phones this year is still down from last year."

Wafer foundry giant TSMC's previously announced second-quarter 2023 report also shows the risk of industry recovery. The company's second-quarter revenue was $15.68 billion billion, down 13.7 percent from a year earlier and down 6.2 percent from the first quarter. TSMC said frankly that overall, demand is weaker than previously expected, chip design companies are more cautious, and inventory adjustments may continue into the fourth quarter of this year.

Nomura Orient International commented on TSMC's results, "The recovery in the second half of the year is still dependent on the macro economy and the supply chain as a whole is biased towards caution due to lack of visibility in the middle of the year. At the same time, we believe that while the semiconductor sector may face downside risks due to performance validation and some pessimistic expectations during the quarterly disclosure period, it also confirms that the current cycle has bottomed out."

In the midst of a downturn, we can still see some positives. For example, Leon Micro (605358.SH) is expected to achieve a total operating income of 0.71 billion yuan in the second quarter, up 12.3 from the previous quarter. Zhuo Shengwei's operating income increased 34.02 month on month and net profit increased month on month in the second quarter of 2023. Jingchen's product lines showed varying degrees of month-on-month growth. In the second quarter, revenue is expected to reach about 1.315 billion yuan, up about 27.05.

In addition, several companies have bucked the trend. North Huachuang (002371.SZ) expects net profit to increase by 121.3-155.76 in the first half of the year. The company said that the market share of the semiconductor equipment business has steadily increased and the operating efficiency has continued to improve; the net profit of China Micro Corporation (688012.SH) has also increased. Above 100, the company said that its etching equipment continues to be recognized by more domestic and foreign customers, and the market share of key customers continues to increase.

judging from the seven enterprises with performance growth, a prominent feature is that they are concentrated in semiconductor equipment enterprises. apart from the significant increase in the performance of the two leading equipment companies, north huachuang and zhongwei, photovoltaic and semiconductor equipment company jingsheng electromechanical (300316.SZ) is also expected to increase its net profit by 70.0-90.0 in the first half of the year.

The 21st Century Business Herald has pointed out many times before that as the localization of the semiconductor supply chain will continue to advance, the growth of semiconductor equipment, parts, and materials is relatively stable, and the driving force behind it is mainly the expansion of fab production and localization. Import demand. However, market participants suggest that it is necessary to pay attention to the lag factors existing in the upstream link of the equipment.