Capital: Large funds leverage local funds, the IC industry is ushering in a period of intensive investment

• IC industry belongs to the industry with heavy capital expenditure, "big investment, big income, medium investment, no income, small investment, big loss";

• Globally, the annual capital expenditure on semiconductors is close to us $60 billion, while the annual capital expenditure of Intel, TSMC, Samsung and other giants is around US $10 billion, which is still limited by the support of large funds;

• According to our statistics, in addition to the large scale of nearly 140 billion funds, the integrated circuit industry gathered in the provinces and cities also have set up local fund of integrated circuits, as of April 2019, the country has more than 15 provinces and cities set up scale ranging from local IC industrial investment fund, a total size reached 500 billion yuan. China's new investment in the semiconductor industry is expected to reach a level of 1 trillion yuan in the next 10 years, financed by bonds such as large funds, local funds, social funds and related bank loans.

Related Information

The global integrated circuit equipment market is highly monopolized

• Characteristics: strong technical barriers brought by short technology renewal cycle, great market barriers brought by high degree of market monopoly, and extremely high recognition barriers brought by competition and cooperation among customers. Therefore, the integrated circuit equipment market is highly monopolized, and the segmentation market is dominant;

Market: the wave of factory building in Mainland China provides a huge market space for semiconductor equipment industry

• According to the global Wafer Fab Forecast report released by SEMI, 62 new wafer processing lines are expected to be built globally in the four years from 2017 to 2020. Among them, 26 new fabs will be built in mainland China, making it the most active region in the world in terms of new wafer fab construction. The total investment is expected to account for 42% of new wafer fab construction globally, which is the highest in the world.

China's IC equipment market high-end proportion is small, and most of the foreign manufacturers

• In 2018, the size of China's semiconductor equipment market reached 13.11 billion US dollars, but according to the statistics of China Association of Electronic Special-purpose Equipment Industry, the sales volume of domestic semiconductor equipment is estimated to be 10.9 billion yuan in 2018;