Industry news: 1)SIA and SEAJ release industry data, global semiconductor sales in February 2024 and Japanese semiconductor equipment sales in March 2024 both achieved year-on-year growth. According to Knometa Research data, Chinese mainland's monthly wafer production capacity will account for 19.1 percent of the world's total in 2023 and is expected to surpass South Korea and Taiwan in 2026. 2) Memory chips continue to be hot, Samsung Electronics will raise the price of SSD for enterprises by 20%-25%;SK Hynix announced that it will jointly develop the next generation of HBM with TSMC and continue to invest in the construction of DRAM production base. Meiguang also plans to invest in DRAM "super fab" in the United States ". 3) In the context of the AI chip-driven industry upward cycle, Japan's semiconductor materials manufacturers Resonac to expand their production capacity to 3.5-5 times the current capacity. China's photoresist technology also ushered in a new breakthrough, semiconductor materials localization is just around the corner.

key company announcements: Huahai Chengke, Tianyue Advanced, Tongfu Microelectronics, Yu Silicon Electronics, Changchuan Technology and Jiangfeng Electronics and other companies have issued 2023 and 2024Q1 performance announcements. In 2023, affected by multiple negative factors such as the slowdown in macroeconomic growth, international geopolitical conflicts and industry cyclical fluctuations, the demand of the semiconductor industry fluctuated greatly, showing a cyclical downward trend as a whole, and the performance of some companies was under pressure. Q1 2024, semiconductor downstream demand recovery, market recovery, most of the company's performance significantly improved, the semiconductor industry cycle inflection point more clear.

sector tracking: 1) semiconductor index performance in the past month: from the level of rise and fall, the semiconductor industry index lost 6.92 percentage points to the CSI 300 index and 1.62 percentage points to the electronics index. In terms of specific data, the semiconductor industry index rose or fell by -5.26 per cent, the electronics industry index rose or fell by -3.64 per cent and the CSI 300 index rose or fell by 1.66 per cent. 2) Semiconductor index performance in the past year: From the level of ups and downs, the panel industry index outperformed the CSI 300 index by 4.29 percentage points and the electronics index by 7.55 percentage points. In terms of specific data, the semiconductor industry index rose or fell by -5.26 per cent, the electronics industry index rose or fell by -12.81 per cent and the CSI 300 index rose or fell by -9.55 per cent. 3) Performance in the first quarter of 2023-2024: The semiconductor equipment sector will maintain a high prosperity and is expected to maintain a stable growth rate this year; Semiconductor material manufacturers have differentiated their performance. The medium and high-end products such as electronic special gas and wet electronic chemicals that have gradually realized domestic substitution have performed well, but the performance of traditional businesses is not satisfactory. The ice on the integrated circuit sealing and testing track is melting, and it is expected that this year's performance will still follow the industry rule of improving quarter by quarter.

investment advice: semiconductor equipment, materials and integrated circuit sealing plate after continuous adjustment, is currently at a safe valuation level, while 2024Q1 most of the company's performance has shown a clear inflection point. We believe that some sub-sectors of semiconductors currently have configuration value. We suggest paying attention to semiconductor materials companies: Huahai Chengke (688535.SH), Jacques Technology (002409.SZ), Qingyi Optoelectronics (688138.SH) and Jiangfeng Electronics (300666.SZ ); Semiconductor equipment companies: North Huachuang (002371.SZ), Tuojing Technology (688072.SH), Zhongke Flying Test Company: tongfu Microelectronics (002156.SZ), Changdian Technology (600584.SH), Silicon Electronics (688362.SH).

Risk Warning: The risk of the semiconductor industry recovering less than expected, the risk of intensifying international trade frictions, the risk of technology iteration and product certification less than expected, and the risk of capacity bottlenecks.