The global semiconductor industry is recovering strongly

Recently, many semiconductor listed companies at home and abroad have disclosed their first-half performance forecasts, and have reported “good news” of high performance growth.

Among A-share listed companies, as of the afternoon of July 7, the five A-share semiconductor industry listed companies that first disclosed their first-half performance forecasts (Well Semiconductor, Lanqi Technology, Biwin Storage, Nanxin Technology, and Dinglong) are expected to have net profit attributable to parent company owners increase by more than 100% in the first half of the year. For overseas manufacturers, companies such as Samsung Electronics have also disclosed performance that far exceeded expectations.

Guo Tao, deputy director of the China E-Commerce Expert Service Center, said in an interview with the Securities Daily reporter: “Semiconductor companies have been reporting good news frequently, showing the strong recovery of the global semiconductor industry. After experiencing the previous downturn, the industry has entered an upward cycle. The market is generally optimistic about the prosperity of the semiconductor industry in the second half of this year.”

The 2024 semi-annual performance forecast disclosed by image sensor leader Will shares on July 6 showed that the company expects to achieve revenue of 11.904 billion yuan to 12.184 billion yuan in the first half of this year, a year-on-year increase of 34.38% to 37.54%; it is expected to achieve a net profit attributable to the parent company’s owners of 1.308 billion yuan to 1.408 billion yuan, a year-on-year increase of 754.11% to 819.42%.

Welltech said: “In the first half of 2024, market demand continued to recover, and downstream customer demand increased. With the company’s product introduction in the high-end smartphone market and the continued penetration of autonomous driving applications in the automotive market, the company’s revenue has achieved significant growth; in addition, in order to better cope with the impact of market fluctuations, the company actively promoted product structure optimization and supply chain structure optimization, and the company’s product gross profit margin gradually recovered.”

The interconnect chip leader Lanqi Technology disclosed on the same day the announcement of the 2024 semi-annual performance increase, showing that the company expects to achieve operating income of 1.665 billion yuan in the first half of this year, an increase of 79.49% over the same period last year; it is expected to achieve a net profit attributable to the parent company’s owners of 583 million to 623 million yuan, an increase of 612.73% to 661.59% over the same period last year.

Lanqi Technology said: “With the further increase in DDR5 penetration, the company’s memory interface and module supporting chip sales revenue has grown steadily month-on-month. Benefiting from the wave of artificial intelligence industry, the company’s three new high-performance ‘capacity’ chip products are showing a rapid growth trend”

In addition, storage chip company BIWIN Storage expects to achieve a year-on-year increase of 194.44% to 211.31% in net profit attributable to the parent company’s owners in the first half of the year. Analog and embedded chip design company Nanxin Technology expects to achieve a year-on-year increase of 101.28% to 119.16% in net profit attributable to the parent company’s owners in the first half of the year. Dinglong Co., Ltd., a leading semiconductor material company, expects a year-on-year increase of 110% to 130% in net profit attributable to shareholders of listed companies in the first half of the year.

“This round of semiconductor cycle is the fifth round of the global cycle. The same as the previous rounds of cycles is that they are all driven by new technologies. The difference is that the application scenarios of semiconductors are expanding significantly.” Liang Zhenpeng, chief consultant of Zhifan Coast and senior industrial economic observer, said in an interview with a reporter from Securities Daily.

Benefiting from the recovery of market demand, overseas giants have also reported high performance growth. South Korean semiconductor manufacturer Samsung Electronics released its unaudited preliminary second-quarter financial report on July 5. Data showed that Samsung Electronics’ sales in the second quarter of 2024 were 74 trillion won (about 390 billion yuan), an increase of 23.31% year-on-year; operating profit was as high as 10.4 trillion won (about 54.8 billion yuan), a sharp increase of 1452.24% year-on-year.

Samsung Electronics’ second-quarter performance far exceeded market expectations. Lyon Securities believes that the demand for data center and artificial intelligence development has pushed the average price of memory chips up 15% from the previous quarter, which has reversed the losses of Samsung Electronics’ largest department in the same period last year.

Memory chip manufacturer Micron Technology also previously released its third-quarter report (March to May 2024). In this quarter, the company achieved revenue of US$6.811 billion, an increase of 81.5% year-on-year; and achieved a net profit of US$702 million, an increase of 47% from US$476 million in the previous quarter. Micron Technology said that its revenue, gross profit margin and earnings per share in the third quarter were all above the upper limit of the guidance range. Thanks to the continuous improvement of the supply and demand situation in the industry, the company has increased the pricing of its products and optimized its product portfolio, which has improved its profitability in the terminal market, especially the AI-related product categories, which have considerable profits.

Yu Fenghui, a special researcher at China Financial Think Tank, told the Securities Daily reporter: “AI technology plays a key role in promoting a new wave of development in the semiconductor industry. With the popularization of smart terminals such as AI mobile phones, it will undoubtedly create huge market demand.”