Haitong: Innovative technology drives the semiconductor industry into a new growth stage. It is recommended to pay attention to Novoray Corporation (688300.SH) and others.

Haitong Securities released a research report stating that the global semiconductor industry has entered a new growth stage driven by innovative technologies such as 5G, new energy vehicles, artificial intelligence, cloud computing, and the Internet of Things. With the popularity of AI technology driving an increase in computing power demand and the PCB industry becoming more prosperous, coupled with the recovery of the consumer electronics market and accelerated domestic substitution. It is also believed that in the context of the industry chain being independently controllable, domestic leading companies in new materials will have the opportunity to enjoy the dual benefits of rapid industry development and domestic substitution. The report recommends focusing on leading companies in the fields of semiconductor materials, PCB materials, and consumer electronics new materials. Key points from Haitong Securities: - Innovative technologies are driving the semiconductor industry into a new growth stage. - The global semiconductor industry has entered a new growth stage driven by innovative technologies such as 5G, new energy vehicles, artificial intelligence, cloud computing, and the Internet of Things. DeepSeek, as a leading company focused on the development of general artificial intelligence, has significantly improved its technical capabilities compared to OpenAI, with advantages such as algorithm intelligence upgrades, which have reduced AI training costs, driven the popularization of AI technology, and led to an increase in data center expansion, computing power demand, and high-speed interconnection demand. DeepSeek has attracted nearly 20 automakers and core technology providers to join, further accelerating the upgrade of automotive intelligence. - Computing power and AI servers as well as other hardware all require PCB. - The growth in demand for PCB-related products will come from servers, storage, artificial intelligence, automotive electronics, communication electronics, and foldable smartphones. Starting in 2024, there will be explosive growth in AI-driven switches, servers, and other computing power infrastructure, a new round of AI innovation cycles for smartphones and PCs, and an increase in demand and prices due to the implementation of intelligent/ electrification in cars, leading to rapid growth in demand for high-end products such as HDI and high-layer count multi-layer boards in the PCB industry. - Consumer electronics market warming up and new product releases. - According to China News Network quoting Canalys, the global smartphone market is expected to sell 1.22 billion units by 2024, a 7% year-on-year increase, reversing the two-year decline. According to Sina Technology quoting Beijing Centergate Technologies online, Huawei is expected to gradually release a series of new products starting in March, including smartphones, tablets, computers, and smart wearables in multiple fields. - Advanced material technology has high barriers to entry, and leading companies are expected to benefit. - Due to high technological barriers and a late start in the domestic market, the global semiconductor material supply chain is still dominated by foreign companies from Japan, Europe, and the US. The report believes that in the context of the industry chain being independently controllable, domestic leading companies in new materials are expected to enjoy rapid industry development and the double benefits of domestic substitution. - Recommendations include focusing on semiconductor material companies Novoray Corporation (688300.SH), Shenzhen Capchem Technology (300037.SZ), Jiangsu Yoke Technology (002409.SZ), in the PCB material sector: Sichuan Em Technology (601208.SH), Jinan Shengquan Group Share Holding (605589.SH), and in the field of consumer electronics new materials: Jilin Oled Material Tech (688378.SH), Shandong Sinocera Functional Material (300285.SZ). Risks: downstream application development falling short of expectations; risks from intensified industry competition.