The most orthodox chip leading stocks are released

On the road to China's rise, there have always been some bumps and bruises. In recent years, the number of patents of technology companies led by ZTE and Huawei has soared, and many cutting-edge technologies have stepped up the pyramid. However, it is the rise of such a group of companies that makes the United States afraid, since Trump came to power, the United States began to take various means to "suppress" ZTE and Huawei, including the house arrest of Ms. Meng Wanzhou for more than 500 days, to this day, has not been released.
The repeated sanctions imposed by the United States on Huawei have made people constantly aware of the importance of domestic substitution. However, domestic substitution will not be achieved overnight, and it is bound to be full of obstacles. Securities Times · Data Treasure will conduct a deep analysis of semiconductors, try to analyze the importance of domestic substitution, and analyze the listed companies involved in the whole domestic semiconductor industry chain one by one.
Us Overlord treaty limits Chinese chip development
Half a month ago, the US Department of Industry and Safety required a license to export to Huawei, regardless of whether American companies use a certain percentage of American technology in their products. The proportion of American technology in the chip field is very high, which makes Huawei's booming Hisilicon chip greatly affected.
Huawei currently has TSMC, SMIC foundry, why Huawei and even the entire Chinese chip development should be subject to the United States. This is mainly due to the Wassenaar Agreement, which was developed under the manipulation of the United States in 1996, and the agreement imposes strict restrictions on the export of high-tech products to China. When a certain country plans to export a certain high-tech to China under the Wassenaar Arrangement, the United States even directly intervenes.
At the same time, Huawei's consumer business has been greatly affected. Consumer business is dominated by consumer electronics, including mobile phones, headphones, tablets, etc., and consumer electronics have the highest requirements for chips. According to Huawei's annual report data, the proportion of consumer business has increased year by year, and the proportion in 2019 has exceeded 50%. In contrast, the proportion of sales revenue in the operator business has gradually declined, but the requirements for chip technology in the operator and enterprise business are not as high as in the consumer business.
The time has come for domestic alternatives to advance in the semiconductor industry
With the advent of the information age, chips are widely used in computers, mobile phones, home appliances, automobiles, high-speed rail, power grids, medical instruments, robots, industrial control and other electronic products and systems, the importance of chips can be seen. To some extent, it can be said that who has mastered the most core chip design and manufacturing technology, who has always controlled the hegemony of the communications industry, which is one of the important reasons for Trump to choose chips to fight China after coming to power. At present, China's semiconductors are also very dependent on imports, and customs data show that in 2019, China's imported chips spent a total of $305.5 billion, far more than crude oil as a strategic material.
Therefore, if China's Huawei wants to develop semiconductor technology completely independent of the United States, it must vigorously develop domestic alternatives. From the autonomy of the industrial chain, and the background of the needs of the domestic market, domestic substitution has come to the moment of full force forward.
At present, Huawei is opening a round of domestic supply chain remodeling, strengthening the independent and controllable layout of domestic enterprises, from the current industry tracking point of view, foundry production, packaging and testing as well as supporting equipment and materials have begun to benefit substantially.
Securities Times · Data Treasure in-depth study of the upstream and downstream links of the semiconductor industry chain, the production of the semiconductor industry chain map, a relatively intuitive presentation of the semiconductor industry overview. The branches of the semiconductor industry include integrated circuits (accounting for 80%-90%), discrete devices, etc. Integrated circuits, also known as chips, have a very high scientific and technological content, involving microelectronics, chemistry, optics and other disciplines, and are the largest field blocked by the United States against China, and the main object of this paper.
Modern integrated circuit (IC) industry division of labor is becoming clearer, can be divided into: design - manufacturing - sealed test. In addition, EDA, materials, and equipment are called the three major foundations of integrated circuits, EDA is oriented to design and manufacturing, and materials and equipment are oriented to manufacturing and encapsulation. If the downstream application is not considered, the whole industry chain of semiconductors can be mainly divided into IC design, IC manufacturing, IC encapsulation, EDA software, semiconductor materials, semiconductor equipment and other six main links, the following will study the industry status of these six links and domestic alternative potential stocks in A shares.
IC design: Huawei hisilicon leads domestic IC design enterprises
Integrated circuit is a large number of logic circuits densely distributed in a small silicon chip, so that it has the ability to process data at a high speed, IC design is the construction of logic circuit and its complete and reasonable distribution on the silicon chip process. IC design is divided into front-end design and back-end design, front-end design (also known as logic design) and back-end design (also known as physical design) and there is no unified strict boundaries, involving the design related to the process is the back-end design.
At present, the IC design industry is still dominated by overseas enterprises, and domestic enterprises are in the rapid rise. According to public information, in 2018, Huawei hisilicon ranked first among the top ten IC design companies in China with a revenue of 50.3 billion yuan, an increase of 30% year-on-year. Unigroup Zhanrui, Beijing Haowei (Weil share acquisition) with 11 billion yuan, 10 billion yuan income separated second and third. In addition, it also includes high-quality listed companies such as Huiting Technology, Ziguang Guowei and Zhaoyi Innovation.
IC manufacturing is full of technology
IC manufacturing is full of technology, involving the collaboration of a range of high-tech fields such as microelectronics, chemistry and optics, and can be divided into six separate production steps: diffusion (including oxidation, film deposition and doping processes), lithography, etching, thin film, ion implantation and polishing.

The global fab market share ranking is: TSMC, Samsung, Grofonde, UMC, SMIC, High Tower, Powerchip, World Advanced, East Gaoke. Smic, the domestic foundry leader, ranked fifth with a market share of 4.3%. Smic is not only backward in production capacity, in the development of advanced process, but also far behind TSMC, currently TSMC has been able to mass produce 7nm, and SMIC has just broken through the mass production of 14nm after Liang Mengsong joined. At present, the flagship products of domestic enterprises such as Huawei and Xiaomi have been fully upgraded to the 7nm level, and if the manufacturing process is restricted, the impact on domestic consumer electronics companies is relatively large.
Another concern is that the manufacturing process is very dependent on manufacturing equipment such as lithography machines, and the main equipment is in the hands of European, American and Japanese enterprises, and has been affected by the United States has been abnormal supply, which is also a major bottleneck restricting the development of the domestic IC manufacturing industry.
IC closed test: Domestic enterprises eat the share of overseas enterprises
Encapsulation is the packaging and testing of integrated circuits, which is located at the end of the semiconductor industry chain. Packaging is the process of laying out, fixing and connecting the chip on the substrate, and using plastic insulating medium to form electronic products. Testing is mainly a step to verify the function and performance of semiconductor products such as chips and circuits.
Unlike other areas of semiconductors, the domestic sealed-test industry has ranked among the first echelons in the world, and has entered the deep domestic substitution process, and its market share continues to rise. According to Yole's statistics, the top five companies in the global closed test market in 2018 were China's Taiwan ASE (19%, excluding SPIL Precision), the United States Anrely (15.6%), China JCET Technology (13%), China's Taiwan SPil Precision (10%), and China's Taiwan Licheng Technology (8%). Among the world's top ten sealed test plants, China's mainland Changdian Technology, Tongfu Micro electricity, Huatian Technology 3 entered, accounting for 22% of the market share.
EDA software: the weakest link in the domestic semiconductor industry chain
EDA, the full name of electronic design automation, is a software tool cluster that completes the input, processing, simulation and verification of chip design schemes with computer assistance. It is an indispensable basic tool in today's chip design industry, and even known as the "mother of chips" by some people in the industry. EDA is the "essential artifact" in chip design, just like the CAD design on our computer, according to the computer drawings to see where it is unreasonable. In recent years, with the continuous development of integrated circuit technology, the technical content of EDA is also rising at an alarming rate.
In this regard, the United States is basically a dominant, the three EDA companies in the United States have almost monopolized the global EDA market, and Huawei Hisilicon chip has paid a huge amount of money every year in this regard, that is to say, the United States has monopolized the cutting-edge technology of the semiconductor industry. All three companies claim to offer a full range of solutions for chip design, but all are in fact hybrids. Among them, Synopsys has a market share of 32%, Cadence has a market share of 22%, and Mentor has a market share of 10%. Mentor, despite being acquired by Germany's Siemens, is still headquartered in the United States, and these three companies alone have a market share of more than 60%.
Among A-shares, there are no directly listed EDA software stocks, and most of them are financial investors who invest in related enterprises through investment institutions, such as Shentong Metro and Dongtu Technology indirectly invest in EDA enterprises, but because of their very small impact on enterprise management, they are not included in EDA domestic alternative potential stocks. In addition, core vision is applying for the IPO of the science and technology board, IP service provider core original shares IPO will be held.
Semiconductor materials: the second phase of the large fund or open the wave of localization
Semiconductor materials are very important in the entire industry chain and are essential raw materials for chip manufacturing and sealing. The global semiconductor materials market is worth more than $50 billion.
From the perspective of the market structure of semiconductor materials, silicon wafers account for 31% of the share, which is the most important part of the semiconductor materials industry, in addition to electronic gases, mask plates, photoresist and supporting reagents, etc., also occupy a large share.
From the perspective of industry competition, the global semiconductor materials industry is still dominated by Japan, the United States, South Korea, Germany and other countries. In the most important field of silicon wafers, Japan Shin-etsu Chemical, Japan Shengko, Taiwan global wafer, Germany Siltronic, South Korea LG Silitron accounted for the world's top five, in the field of target materials, Nikmine Metal, Honeywell, Dongcao, Plair and other target industry leaders.
Under the background of the current multinational enterprises leading the global semiconductor materials industry, the domestic semiconductor materials are highly dependent on foreign countries, some of which are as high as 90%, making materials become one of the loopholes in the domestic industrial chain. For example, in the field of silicon wafers, Japan's five giants such as Shinetsu occupy more than 90% of the global market share, and a few domestic companies such as Shanghai Xinsheng achieve 12-inch large silicon wafer mass production. In terms of photoresist, there is still a big gap between domestic enterprises and the world's advanced level in the field of semiconductor photoresist, and a few enterprises such as Jingrui Shares, Shanghai Xinyang, and Nanda Optoelectronics layout ArF and KrF photoresist, and no enterprises involve EUV photoresist.
In order to make up for the weakness of the industrial chain, semiconductor materials are also one of the key investment directions of the large fund, and the first phase has invested in Shanghai silicon industry, Jacques Technology, Anji technology and other materials enterprises. The total scale of the second phase of investment and leverage social financing is expected to be a higher level than the first phase, or open the wave of semiconductor materials localization.