Nomura Securities changed its partial view on semiconductors from April. Yesterday, they reiterated that semiconductors' will have no peak season effect in the second half of the year 'and will enter the next revision period of orders and profits. It is expected that the stock price will bottom as soon as July and August. Nomura said that it has a significant impact on the demand for science and technology. At present, it can be seen that some large science and technology companies have stopped recruiting employees. It is difficult to judge whether semiconductors will have a hard landing or a soft landing. However, it is convinced that semiconductor stocks will face orders and profit adjustments.
At present, the backward production expansion progress of the long-term contract and the OEM will delay the order cutting time. There is still support for the gains made by the semiconductor stocks in April and may. In addition, the overall economic market conditions such as the 10-year US bond yield seems to have reached the top, and the closure of the Chinese Mainland in June has made the semiconductor stocks rebound recently.
Nomura continues to treat semiconductors conservatively, believing that the upward cycle of the semiconductor industry will end in the first half of this year, and there is no peak season effect support in the second half of this year. The profit performance and stock price trend of semiconductor stocks in 2022 will be the same as those in 2008, 2011 and 2015.
From the experience of 2008, 2011 and 2015, Nomura analyzed that the semiconductor profit revision period in these three years mostly continued to the next year, but the stock prices all led to the bottom in the second half of the year. The reason is that most of the bear market came quickly and deeply, the period was shorter than the bull market, and then the market investors would expect to improve the market conditions in the future, so that the stability of the market was more reflected; In addition, the quantitative easing and reverse operation policies in 2008 and 2011 also improved the atmosphere.
It can be noted that in 2008, 2011 and 2015, the stock prices of listed semiconductors were revised by 57%, 30% and 33% respectively from the high points, and those of OTC semiconductors were revised by 77%, 56% and 43% respectively. The most serious cases of profit and stock price revision were from June to August. If the past situation is replicated this year, the current semiconductor share price has not entered the main correction period, and the bottom point is estimated to fall after July and August.
In terms of this year's cycle, Nomura reminded that in July and August, there will be more semiconductor stocks whose profits will be worse than the market expectations. Companies mainly engaged in smart phones, laptops, televisions and other general consumer electronic products will first show profit correction. Servers, cloud terminals, automotive semiconductors and so on can still benefit from the tight market conditions, but with the gradual balance of supply, relevant orders may fluctuate. Inflation, declining consumption power and declining corporate spending are also potential adverse factors.
Media: chip demand blows against the wind
It is reported that the good news for the chip industry is that the chip shortage in the past two years may be easing. However, this is bad news for Asian economies and companies in the technology supply chain. Because the headwind of chip demand is gathering in China and the United States.
They pointed out that the slowdown of China's economy and the sluggish development of the US technology industry will weaken the demand of consumers and enterprises for electronic equipment. Shipments of smartphones and PCs have begun to decline year-on-year.
According to IDC, an industry tracker, smartphone shipments fell 8.9% year-on-year in the first quarter, while PC shipments fell 5.1%.
According to media reports, in most parts of the world, as the economy reopens, consumers are shifting their spending from goods to services. Inflation fears may further delay them. China is coping with the more general impact of its new crown policy on income and consumption, which led to the blockade of most parts of Shanghai this spring. According to IDC, smartphone shipments in China fell by 14.1% in the first quarter.
Across the Pacific, the plunge in US technology stocks could lead to lower spending on it equipment. Start ups are running out of money. Profligate technology companies may need to start tightening their wallets and focusing on their bottom line. In particular, server chips used in data centers have been a huge source of growth for chip manufacturers in the past few years, but lower spending by technology companies may change this.
However, the media said that we still have a glimmer of hope: for most of the past 18 months, semiconductor shortage has been a headache for the global economy. With the weakening of demand growth, this shortage may eventually begin to ease.
According to Credit Suisse, which tracks more than 200 companies in the technology supply chain, the inventory days in the first three months of this year increased from 42 days in the previous quarter to 53 days. Inventory has been on the rise since the epidemic, as companies hoard inventory to meet manufacturing and logistics challenges. However, the final slowdown in demand and the company's high inventory may damage suppliers later this year.
East Asia, where most technology suppliers are located, will feel intense pain. The recent blockade of Shanghai and other cities in China has disrupted supply and demand in neighboring economies such as South Korea and Taiwan. South Korea's exports rebounded in May, but this was partly due to a reduction in the number of working days last month.
Morgan Stanley said that after this adjustment, the daily export growth will further slow down than that in April, especially major export products such as semiconductors and flat panel displays. The reopening of Shanghai may bring short-term boost, but as long as China adheres to the current epidemic policy, any major changes in this regard are unlikely to occur until the beginning of 2023.
Tsm.us, the leader of wafer foundry, may better withstand the test of slowing demand, because it has won market share from smaller participants with its leading technology position and strong pricing ability. Companies whose products are more sensitive to the pricing cycle of the industry, such as the memory chips of Samsung Electronics and SK Hynix, may suffer greater losses.
Since the early days of the megalopolis, Asian technology suppliers have benefited from strong consumer demand. There is no thunder yet, but the sky will get darker this year.
This article is compiled from the wechat official account "semiconductor industry observation"