China plans to vigorously develop the third-generation semiconductor industry, leading concept stocks to rise

According to foreign media citing people familiar with the matter, China plans to write its strong support for the development of the third-generation semiconductor industry into the “14th Five-Year Plan” being formulated to develop its own semiconductor industry and deal with the restrictions of the US government.

According to reports, during the period of 2021-2025, China plans to use the power of the whole country to provide extensive support for “third-generation semiconductors” in education, scientific research, development, financing, applications, etc., and strengthen research, education and financing, in order to achieve industrial independence.

Singularity Finance has consulted public information and learned that compared with traditional silicon materials, the third-generation semiconductors are mainly broadband semiconductor materials such as gallium nitride, silicon carbide, and zinc selenide, which are more suitable for manufacturing high temperature resistance, high voltage resistance, and high current resistance. The high-frequency and high-power devices can be widely used in 5G radio frequency chips, military radars and electric vehicles, and are also known as the “rising stars” of semiconductor materials.

In fact, semiconductors are widely used in integrated circuits, consumer electronics, communication systems and many other fields. With the development of science and technology, the market demand for semiconductor quality and quantity is increasing.

According to the statistics of China Customs, since 2015, the import volume and import value of integrated circuits in my country have been increasing year by year. In 2019, the import value of my country’s chips was 305 billion US dollars, which was 7.2 billion US dollars less than that in 2018, a year-on-year decrease of 2.3%; the cumulative export value of chips in 2019 was 101.65 billion US dollars, a year-on-year increase of 20.1%; The trade deficit reached 203.360 billion US dollars.

According to relevant data released by the State Council, China’s chip self-sufficiency rate was only about 30% in 2019, but the goal is to reach 70% in the next five years.

China strives to promote the development of semiconductor companies

Previously, due to China’s lack of attention to the semiconductor industry, the level of China’s entire semiconductor industry was far behind the world’s advanced level, and the entire industry was almost dependent on imports. Chinese semiconductor makers also rely heavily on U.S.-made chip design tools and patents, as well as key manufacturing technologies from U.S. allies.

However, with the deterioration of Sino-US relations in recent years, the US has continued to suppress Chinese technology companies, and it has become difficult for Chinese companies to obtain parts and chip manufacturing technology from overseas.

A few days ago, communication expert Xiang Ligang once said that the current international environment has changed, and the United States continues to use its dominant position in the global chip industry to block China. “The core industry of China must have the initiative and can no longer be controlled by others.

On August 4, the State Council issued the “Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and Software Industry in the New Era”, and formulated the introduction of finance and taxation, investment and financing, research and development, import and export, talents, intellectual property rights, market application, international cooperation, etc. 37 policy measures in eight aspects. And once again stressed that the integrated circuit industry and the software industry are the core of the information industry, and are the key forces leading a new round of technological revolution and industrial transformation.

In addition, the policy emphasizes the need to vigorously support eligible integrated circuit companies and software companies to list and raise funds at home and abroad, speed up the domestic listing review process, and implement preferential tax policies.

Industry windward concept stocks lead the rise

In recent years, semiconductor design companies such as Huawei HiSilicon and Ziguang Zhanrui, and semiconductor manufacturing companies such as SMIC and China Resources Micro have come to the fore, bringing a better ecological proportion to the domestic semiconductor industry structure. “The industry has gradually formed a “4-3-3” industrial structure.

At present, my country has made many breakthroughs in the field of chip design, and the level of chip design ranks second in the world. According to the statistics of the China Semiconductor Industry Association, the sales of my country’s chip design industry exceeded 300 billion yuan in 2019, accounting for 40.51% of the sales of the integrated circuit industry.

China’s integrated circuit industry has gradually matured, and the development of the industry has changed from technology-driven to application-driven. Although there are still many deficiencies in the domestic semiconductor industry, as the world’s largest manufacturing base and the largest application market for integrated circuits, the market potential is huge and it is expected to play more roles.

On September 4, in the A-share market, the third-generation semiconductor concept ushered in the air, and the concepts of semiconductors, chips, silicon carbide and gallium nitride became popular across the board. The semiconductor and integrated circuit sectors led the gains throughout the day. Several stocks such as Qianzhao Optoelectronics and Jucan Optoelectronics rose by 20%. The net sales of foreign capital exceeded 6 billion throughout the day.