China Great Wall: The car electronic industry is expected to continue to rise, and the national subsidy policy continues to stimulate consumption recovery.

China Great Wall released a research report stating that under the stimulus of national subsidy policies, the demand for consumer electronics continues to rebound, and the supply chain elasticity is clear; national subsidies continue to drive the growth of home appliance demand, with support for TV panel prices rising; factory production cuts, accelerated inventory turnover, and growth in AI demand will drive improvement in the NANDFlash supply-demand structure, and storage prices are expected to start a price increase cycle in the second half of the year; the semiconductor industry is experiencing a revival, with the acceleration of domestication processes; the landing of Apple's AI is expected to accelerate the replacement cycle, and the increase in demand for servers and automotive electronics will drive incremental growth in PCB products; benefiting from the recovery of consumer electronics demand and the upturn in automotive electronics, there is an increase in demand for in-vehicle CIS. The main points of China Great Wall are as follows: Xiaomi SU7 Ultra pricing exceeds expectations, and the outlook for the automotive electronics industry is expected to continue to improve At Xiaomi's new product launch event on February 27, 2025, Lei Jun officially announced the price of the SU7 Ultra - 529,900 yuan, which not only set a new pricing ceiling for Xiaomi cars, but also pushed the number of pre-orders to over 10,000 within just two hours. This model is equipped with a super three-motor system with 1548 horsepower, 0-100km/h acceleration in just 1.98 seconds, and a top speed of 350km/h. The market performance after the price announcement confirms the success of the positioning and pricing strategy of this model - with over 6,900 pre-orders within 10 minutes of opening pre-orders, and over 10,000 pre-orders within two hours. This data not only exceeds Xiaomi's annual sales target of 10,000 units, but also reflects a significant increase in consumer acceptance of domestically produced high-end electric vehicles. According to official Xiaomi statistics, in 2024, the Xiaomi SU7 accumulated over 248,000 pre-orders in just 9 months, with over 135,000 deliveries. Additionally, BYD Company Limited's "Eye of God" system technology has penetrated all its models, driving a rapid increase in the penetration rate of high-end assisted driving (L2+/L3), combined with the competition in hardware upgrades in the automotive industry, leading to a sharp increase in demand for 8MCIS chips in the near term. Looking ahead, with the increase in sales of domestic electric vehicles, CKH HOLDINGS' self-driving sensing technology upgrades and specification lowering will continue to boost the outlook for the automotive electronics industry chain, including in-vehicle CIS. National subsidy policies continue to stimulate consumption recovery, with a year-on-year increase of 18% in domestic smartphone sales in January Counterpoint data shows that nationwide sales subsidies for smartphones have driven growth in the domestic smartphone market; during the week of January 20-26, domestic smartphone sales increased by nearly 65% year-on-year, reaching over 9.5 million units; smartphone sales in January increased by 17.6% year-on-year, reaching nearly 29 million units. Counterpoint indicates that national subsidies will help accelerate the transition from traditional smartphones to AI-powered smartphones, leading the Chinese smartphone market to steady and healthy development over a longer period of time; it is expected that the Q1 national subsidy policy will push domestic smartphone sales in 2025 to increase by 2%-3% year-on-year. TV panel prices continue to rise, and some storage product prices are increasing In late February, the average prices of 65/55/43/32-inch TV panels increased by 2/1/1/0.5 US dollars respectively compared to the previous month, while the average prices of 27-inch and 23.8-inch IPS display panels remained unchanged from the previous month, and the average prices of 17.3/14.0/11.6-inch TN notebook panels remained unchanged from the previous month, and the average price of 15.6-inch Value IPS notebook panels remained unchanged from the previous month. TrendForce consultancy estimates that in February, the prices of 32/43/50/55/65/75-inch TV panels will increase by 0.5/1/0/1/2/3 US dollars respectively; the estimated Open cell MNT panels are expected to reflect a slight increase of 0-0.1 US dollars first; the estimated prices of NB panels are expected to continue to remain unchanged overall. As of February 25, the average prices of DDR4 series 8GB/3200/16GB/3200 were 1.15/2.00 US dollars, with price changes of +0.05/-0.10 US dollars in the past two weeks. CFM reports that due to relative shortages of low-capacity resources in the supply, rising costs are driving corresponding embedded product price hikes; there has also been a price increase for some low-end resources in the channel market; as storage manufacturers gradually advance process iterations and product upgrades, some mature process resources are gradually being discontinued, leading to continued tight supply, and with the transmission effect of relatively single part numbers and rising resources, the prices of corresponding embedded finished products are clearly rising. Risk warning: Risks of macroeconomic fluctuations; external environmental risks such as China-US trade frictions; risks of new markets and new products; risks of material supply and price fluctuations; exchange rate risks.