Zhitong Financial APP learned that Guojin Securities released a research report saying that overall, the demand in the electronics industry is gradually recovering and AI demand is strong. AI-related companies led by Avida will have excellent performance in the third quarter and continue to be optimistic about AI demand-driven, demand recovery and independent controllable benefit industry chain.

Key beneficiary companies: zhongji Xuchuang (300308.SZ), Shanghai Electric Power Co., Ltd. (002463.SZ), Xinyisheng (300502.SZ), Lixun Precision (002475.SZ), Sanhuan Group (300408.SZ), Jiemei Technology (002859.SZ), Shunlu Electronics (002138.SZ), Wei Test Technology (680S) (66.S), Zhongshengyx68.S), yuanjie Technology (688498.SH), Weijie Chuangxin (688153.SH), Zhuo Shengwei (300782.SZ), Lanqi Technology (688008.SH), Shenghong Technology (300476.SZ), Zhaoyi Innovation (603986.SH), Dongshan Precision (002384.SZ), Saiteng Stock (603283.SH), S0.88000S60.

The main points of view of IICC Securities are as follows:

Electronic Week View:

Passive Component Q2 is performing well, focusing on AI and demand recovery. The prosperity of the electronics industry rebounded in the second quarter. The inventory of the passive component industry was reasonable. It felt the recovery of demand and replenishment of inventory. Revenue and profit increased significantly compared with the first quarter. Shunluo Electronics Q2 revenue increased 27% compared with Q1, performance increased 117 compared with Q1, Jiemei Technology Q2 revenue increased 31% compared with Q1, and performance increased 118 compared with Q1. The bank learned from the industry chain that the current order situation continues and is expected to continue to improve in the third quarter. A number of folding mobile phones will be released in the second half of the year, which is expected to actively boost demand.

MediaTek forecasts revenue growth of 4-11% in the third quarter, indicating that demand for smartphones, networking chips and power management chips will improve positively in the third quarter. Intel said that AI will actively promote the development of personal computers. At present, the inventory of personal computers has reached a reasonable level, and it is predicted that demand will continue to recover in the second half of the year. Server inventory digestion will continue in the second half of the year, with server sales expected to decline in the third quarter and increase again in the fourth quarter. The demand for AI chips continues to be strong. AWS has also started to purchase a large number of GPU, announcing the introduction of EC2 P5 virtual machine instances in AWS and the introduction of supercomputing with 20000 H100. Compared with P4 instances, large-scale language model training is actually shortened by 6 times and the cost is reduced by 40%. At present, the demand for advanced packaging and testing capacity is in short supply. Avida is considering adding new suppliers to disperse HBM3 and 2.5D packaging orders. Avida is negotiating with potential suppliers such as Samsung, Amkor and Riyueguang. In addition, Samsung plans to start mass production of HBM3 this year and is actively seeking HBM3 orders from Avida. On the whole, the bank believes that demand in the electronics industry is gradually recovering, AI demand is strong, AI-related companies led by Avida will have excellent performance in the third quarter, and continue to be optimistic about AI demand-driven, demand recovery and independent controllable benefit industry chain.

Segment track: 1) Semiconductor foundry: TSMC's full-year revenue is expected to be-10%, SMIC's second-quarter crop rate bottomed out. SMIC expects its capacity utilization to pick up in the second quarter, maintaining its previous guidance throughout the year, with Huahong's overall capacity utilization remaining high.

2) Semiconductor equipment: Japan, the Netherlands government equipment export control measures have landed, optimistic about semiconductor equipment independent control.

3) Semiconductor materials: optimistic about the marginal improvement of materials after the pick-up in the rate of growth and the rapid introduction of domestic production under independent control. Materials relative to the post-cycle, industry beta will be affected by some of the semiconductor industry boom.

4) Industrial, automotive, security, consumer electronics: new energy vehicles to maintain high growth, Android chain complement is obvious. Wholesale sales of new energy passenger cars are expected to be 620000 in July, up 28%, down 7%, with a penetration rate of 36%. From January to June, profits of industrial enterprises above designated size fell 17% year-on-year, a slow improvement in the decline. Industrial demand as a whole is relatively flat. It is recommended to actively pay attention to the optical and industrial robot connectors with low localization rate.

5)PCB: As can be seen from the monthly revenue of Taiwan's PCB industry chain in June, the current PCB industry chain is still in a downward trend year-on-year, and the ring-on-ring is also in a state of shock. All downstream applications have maintained a downward trend.

6) components: in late July 2023, the average price of 65/55/43/32 inch TV panels was 162/119/63/36 us dollars, up 4/3/2/1 us dollars from the previous period. Panel manufacturer Q2 profit repair exceeded expectations, large-size panel prices continued to rise steadily. Passive components look forward to the second half of the year, the original factory fundamental pressure is reduced, the capacity utilization rate is about 70%, the industrial chain inventory level is reasonable, the price stabilizes or slightly rises.

7)IC Design: Large factories line up to place orders for Hyex HBM products, focusing on domestic investment opportunities. We estimate that the global HBM market is expected to reach $5.7 billion in 2026 and 52% CAGR in 22-26. Therefore, we are optimistic that the HBM solution is expected to become the standard for mainstream AI training chips, while HBM bit demand accounts for less than 1% of the overall DRAM market, and we are optimistic about its long-term growth space.

Risk Alert: Risk of less than expected demand recovery; risk of less than expected AIGC progress; risk of further escalation of external sanctions.

Source: Zhitong Financial Network