UBS certificate: Semiconductor optimistic about OEM growth next year 8-9%

UBS Asia Pacific Semiconductor Chief Analyst Cheng Zhenghua on the 8th said he is optimistic about next year’s semiconductor performance. Under the demand of low-priced smart phones and Windows 8 will be listed, the semiconductor economy is expected to start warming up in February and March. It is estimated that the overall semiconductor industry's revenue growth rate next year will be 5%, while the foundry growth rate will reach 8%-9%, both growth will be better than this year.

UBS issued a semiconductor outlook briefing today. Cheng Zhenghua, chief analyst of UBS’s Asia-Pacific semiconductor industry, who has won Asia Pacific’s “Best Semiconductor Analyst”, said that next year’s semiconductors will be more interesting than this year and semiconductors will “ "Outperform" (than the broader market), the semiconductor economy may reach the bottom in January, will begin to warm in February and March, driving the recovery of semiconductor demand is mainly driven by low-cost smart phones, and is expected to be listed at the end of next year, Window 8.

He further pointed out that since the beginning of this year, due to high inventory and poor demand, his semiconductor has maintained a relatively conservative view, but the current inventory has returned to normal levels, and it is expected that demand for low-priced smart phones from China will ferment before and after the Lunar New Year. In addition, PC makers are expected to start stocking in the second quarter of next year in order to respond to the Window 8 listing. These factors are favorable to the Taiwanese semiconductor industry.

Cheng Zhenghua also stated that he expects the overall semiconductor industry's revenue growth rate to be 5% next year, and that foundry performance will be even better, with an estimated growth rate of 8%-9%, both of which will outperform this year. In semiconductor stocks, next year it is most optimistic about foundry, IC design and PCB substrates, and packaging and testing will be treated with neutrality, because TSMC (2330) will step into the packaging and testing industry, putting pressure on the manufacturers of packaging and testing. Do not touch the display and semiconductor devices.

He also pointed out that it is necessary for TSMC to enter the field of packaging and testing in the future, and it is the trend. It is estimated that TSMC will cut into the market within 1-2 years. As TSMC cuts into high-end packaging and testing, it accounts for about 10 -15%, but it is the largest one of the future growth of the packaging and testing industry. It will inevitably affect the industry of packaging and testing, and it will have a greater impact on the packaging and testing plants with a higher proportion of Flip chip.

As for the competition between wafer fabs in Taiwan and South Korea, Cheng Zhenghua said that the Korean factory is now recognized as the enemy of most companies in the world. Previously, Global Foundry had expanded its factory in a crazy way, and the Korean plant had retained its strength beforehand. However, now Global Foundry has performed poorly. The factory has become more and more active, and the advanced manufacturing process is becoming more and more expensive. In terms of capital, only Korean factories can compete with Taiwan. Now there are about two years of technical gap between the Korean factory and the Taiwan factory, because the South Korean factory needs to go from the Gate front to the Gate last. However, the bigger concern for the Taiwan factory is the brain drain. For the Korean factory to dig the foot, the Taiwan factory can only fight. The lawsuit threatened former employees to disclose confidentiality, and the relocation of the Korean factory to the Taiwan factory will still be regulated. Therefore, he suggested that the Taiwan government should also control it to protect the company’s leading technology.