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2023

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05

Semiconductor continues to be popular, and there are some internal driving factors in the industry!

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Firstly, recently, BYD Wang Chuanfu predicted that the sales of new energy vehicles in the Chinese market are expected to exceed 3.3 million units this year, and by the end of next year, the penetration rate of new energy vehicles in China will exceed 35%.
This speed is quite fast, and currently, the proportion of new energy vehicles in car sales in China has exceeded 11%. If it reaches 35% next year, there will be several times more room for improvement in sales, and several times more than a year, so the demand for power batteries will also increase several times.
Secondly, on November 22nd, the UK announced that by 2030, 145000 new charging stations will be added annually, aiming to achieve the goal of banning the sale of fuel vehicles by 2030.
In addition, on the US side, Biden signed a $1 trillion infrastructure bill that includes new energy infrastructure projects. At the same time, a $1.75 trillion stimulus bill was passed, of which up to $550 billion will be used to address climate change, mainly in the field of new energy.
It can be seen that the promotion of new energy is global, and the goals are also quite clear, which further enhances the certainty of the growth of new energy vehicles.
Seeing this, many friends may wonder how the title of the article talks about semiconductors and new energy.
The performance of the semiconductor sector in the past two days can be said to be very impressive, but upon closer inspection, there have been some differentiation in the semiconductor sector. Strong products are mainly concentrated in fields such as power semiconductors and third-generation semiconductors, and leading stock prices such as Yangjie Technology and Star Semiconductor continue to rise to new highs.
The main reason is still due to the release of sales of new energy vehicles.
From a general perspective, there are three main logic behind the growth of semiconductors: demand, domestic substitution, and price increase.
In terms of demand, it fully benefits from the increased penetration rate of new energy vehicles. In new energy vehicles, the value of power semiconductors has significantly increased, with IGBT accounting for about 37% of the cost of the electronic control system of new energy vehicles and being the core electronic device of the electronic control system.
The demand for semiconductors in electric vehicles has increased by 5-10 times compared to traditional cars. If electric vehicles are combined with intelligence, the demand for semiconductors will increase several times, and this space is quite huge.
The most important ones among them are power semiconductors, IGBTs, and third-generation semiconductors.
Especially the third-generation semiconductors, mainly composed of materials such as gallium nitride (GaN), silicon carbide (SiC), zinc oxide (ZnO), etc., can achieve better electron concentration and motion control, making them more suitable for high-power electronic devices at high temperatures and frequencies. Basically, it is specifically designed for high-power directions such as new energy vehicles and wind turbines.

In terms of domestic substitution, under the huge market demand, domestic semiconductor companies face greater room for domestic substitution, especially as China is the largest market for new energy vehicles, and the localization rate is also continuously increasing.
This area, such as the IGBT of Star Semiconductor and Yangjie Technology, has benefited significantly.
Looking at the direction of price increase, on November 19th, Tesla's official website showed that the price of the domestically produced Model 3 rear wheel drive version increased by 15000 yuan to 250900 yuan, which is still affected by chip price pressure.
However, this logic is only temporary. With the recovery of overseas industrial chains, it is inevitable that semiconductor prices will return to normal.
At present, the hard core logic that supports semiconductors is the release of demand to accelerate the process of domestic substitution.
Here, it is important to emphasize a misconception in investment. Many people use the term "high stock price" to measure their investments, but instead choose the "low stock price" variety that has been constantly falling. In the end, the prices get lower and lower, and the high ones keep rising.
Investment must get rid of this misconception, otherwise most opportunities will be missed. It is meaningless to measure by 'high or low prices', as stock price trends are the logic of valuation changes. And what we need to do is to study the factors that affect valuation changes.
For example, in the Ningde era, the previous article has been interpreted multiple times. Did someone feel high one year ago, and would someone still feel high three years ago.
The way to measure the level at this time is the three elements of investment and research discussed in the investment and research course, namely industry space, market competition, and profitability. If we analyze a company from these three aspects, it will suddenly become much clearer and continuously open up investment perspectives.
Many times, due to the rotation of hot topics and fluctuations in concepts, we lose our direction, but we miss out on the big opportunity of simple logic. Sometimes investing is actually very simple, with logical stock selection and tactical trading.