Today's Internet era is inseparable from electronic products everywhere, and the technical requirements for the semiconductor industry are getting higher and higher. The country also produces a lot of small components in electrical systems, such as power management chips, field effect transistors, transistors and other products, and there are many large and small companies doing semiconductor trade in China, which will also lead to the accumulation of goods. But it's nothing compared to that.  

What will really affect the domestic situation is the Sino-US trade war. Events like this will have the greatest impact on the demand for the semiconductor industry. Currently, it is still in the stage of continuing to digest inventory. The capacity utilization rate of wafer foundries such as TSMC (2330) has declined. The utilization rate of the packaging and testing industry in the latter stage is also loose. The industry estimates that most manufacturers' revenue in the first quarter may decrease by 10% to 15% quarter-on-quarter, and the prosperity is flatter than expected.

The semiconductor industry pointed out that the demand for smartphones is weak, the demand for automotive and industrial applications has also decreased, and the price of bitcoin has fallen sharply. Since November and December last year, the capacity utilization rate of wafer foundries has declined, and the production cycle of wafers is calculated in 2 months. Recently, the utilization rate of packaging and testing in the latter stage has also been significantly loosened; the US-China trade war has had an impact on the overall economy, and the Huawei incident has also cast a variable on the future development of the 5G supply chain.

  Credit Suisse said that the Asian semiconductor supply chain inventory level is close to the cycle high, the number of days before semiconductor sales is 84 days, and the cycle range is 70-85 days. Semiconductor growth in 2018 is currently lower than in 2017 due to inventory corrections. A slowdown in smartphone shipments in China after restocking and flat inventory depletion in cryptocurrencies and a wide range of apps offset demand for semiconductors from iPhone production.

At present, it seems that there are no new applications that can drive growth in the semiconductor industry. Not only is the first quarter very weak, but the second quarter will not be good either. In the first half of the year, it can be said that "recuperation" is needed. I hope that the US-China negotiations in early March will bring back an optimistic opportunity. .

Regarding the trend of the semiconductor boom this year, most research institutes believe that the global semiconductor boom will move towards low growth, and some are expected to move towards negative growth. For example, foreign investment Morgan Stanley Securities pointed out that the actual production of the semiconductor industry increased by 22% last year, but the market only The 15% increase has been digested, and there is still 7% of excess capacity to be digested. Oversupply will be a big challenge this year. The cyclical low tide of the global semiconductor industry has not yet bottomed out, and the growth of industrial output value has been revised down from negative growth of 1% to negative. 5% growth.

   The decline in memory prices is also one of the keys to the poor semiconductor boom this year. The latest survey by TrendForce's memory storage research (DRAMeXchange) pointed out that demand for end products such as PCs, servers and smartphones is weak, and major DRAM suppliers have slowed down the pace of adding new capacity this year to slow down price declines. It is estimated that the first quarter will be affected by consecutive holidays and off-season effects. It is expected that the price of DRAM will be revised down by 15% in the first quarter, and will continue to be revised down within 10% in the second quarter. Unless demand improves significantly in the second half of the year, the price will remain unchanged. The quarterly decline was about 5%.

  CLSA has been optimistic about the fourth quarter of the semiconductor industry, downgrading the stock ratings of 5 semiconductor companies in Taiwan, China, Japan and other places. CLSA analysts recently said that with or without the U.S.-China trade war, the semiconductor industry will decline sharply.

   "CNBC" reported that CLSA analyst Sebastian Hou said that although the trade war will definitely have an impact on semiconductor demand, even without a trade war, the semiconductor industry should be corrected, "because the inventory of the entire supply is very high." Hou pointed to signs of slowing growth in the semiconductor industry, including falling memory chip prices, rising inventory levels and slowing demand in high-growth sectors such as data center servers, automotive and industrial.

Other analysts, such as Morgan Stanley analyst Shawn Kim, also made similar predictions, Kim said that the memory chip market environment has gradually become negative. Some experts predict the situation will worsen with a 25% tariff on semiconductors.

According to data from research firm Gartner, global semiconductor revenue in 2017 reached US$420.4 billion, a year-on-year increase of 21.6%. The growth was mainly due to insufficient supply, which made the market price of memory chips rise. While Gartner predicted in January that global semiconductor revenue will return to single-digit growth in 2018, a correction in the memory market will lead to a slight decline in revenue in 2019.

  Hou also believes that from the fourth quarter of this year to the fourth quarter of next year, some quarters or some months may see negative growth in semiconductors, and it is also expected that the growth rate of the semiconductor industry will be close to zero in 2019.

Although new technologies such as AI, 5G networks, and the Internet of Things may bring demand back to the semiconductor industry, Hou pointed out that the aforementioned technologies are still in their infancy, "people have high expectations... Can explain the phenomenon of overbooking and high inventory in the supply chain". Hou expects that once the cyclical downturn in the semiconductor industry ends, it may grow at a faster rate due to various new applications.

   The outlook may not be too positive for many of the chipmakers that currently dominate the market, such as Samsung Electronics, Intel, SK Hynix and Micron Technology. CNBC noted that this is because many major companies are making their own memory chips to put into products and data centers.

  Hou said that each semiconductor company will "more hope to optimize their products to show the difference", and pointed out that this is the usual model of the semiconductor industry, and the market share of major companies will shrink in the next 5 to 10 years.

According to the statistics of the International Semiconductor Industry Association (SEMI), the global sales of semiconductor manufacturing equipment in 2019 will decline for the first time in four years. Initiating a boycott of Huawei equipment.

According to SEMI statistics, although global semiconductor sales in 2018 will reach a record high of US$62.1 billion, an increase of 9.7% over 2017, 2019 will decline for the first time in four years to US$59.6 billion , about a 4% reduction.

   "Common Network" pointed out that although global semiconductor sales are expected to rebound in 2020 to $71.9 billion, the industry outlook is still unclear. Manufacturing industry sources said that the outlook is difficult to predict due to the Sino-US trade war, and Japanese semiconductor equipment manufacturers, whose main export targets are the United States and China, are also affected.

Due to the recent expansion of the Sino-US trade war into the field of information security, China's Huawei equipment has been boycotted by the United States, Japan and other countries, semiconductor memory manufacturer Toshiba Memory Corporation (Toshiba Memory Corporation) revealed that because the company exports a lot of products to China, If the boycott of Chinese smartphones expands, it will significantly affect Japanese companies that supply components.

   Another reason for the decline in sales is the reduction in demand for smartphones and peninsula memory, which has led to reduced investment by Chinese and South Korean manufacturers.

  Tokyo Electronics has lowered its 2018 sales in October from 1.4 trillion yen to 1.28 trillion yen; Hitachi High-Tech also lowered its expected sales from 780 billion yen to 750 billion yen.

   From a lot of relevant data and the relationship between some companies in various countries, we can see that the Sino-US trade war will bring huge social and economic turmoil, which will seriously impact the global semiconductor industry. Fortunately, those slow-selling electronic components, power management chips, field effect transistors, Schottky, bridge stacks and other small products can still be used by the electronic market after this war period, because the quality of domestic products has been upgraded.