Source: China Electronics News 2021-03-04
Source: China Electronics News 2021-03-04
On March 1, it was reported that the four ministries and commissions of the US Department of Commerce, the Department of Defense, the Department of Energy, and the State Council have approved leading US equipment manufacturers to supply SMIC with 14nm and above (14nm and 28 mature technology) equipment. Supply permission. Not only that, the key equipment for 14-nanometer wafer epitaxial growth that SMIC has been applying for but has not passed before has also been approved. However, there is currently no progress for export licenses for 10nm and below technology nodes.
There have been signs of this before. Not long ago, Morgan Stanley issued a research report that pointed out that US equipment suppliers have recently resumed component supply and on-site services, which alleviated investors’ short-term concerns about SMIC’s spare parts and component inventory issues. SMIC will be adjusted upwards. The rating of the company has changed from neutral to overweight, and the target price of H shares is raised by 34%, from HK$23.8 to HK$31.8.
In October last year, SMIC issued an announcement confirming that the U.S. Department of Commerce imposed export restrictions on SMIC, stating that after many days of inquiries and discussions with suppliers, SMIC learned that some U.S. equipment, accessories and raw materials exported to SMIC would Restricted by US export control regulations, it is necessary to apply for an export license in advance before continuing to supply SMIC.
If the news of the supply permit is true, it will be very important for SMIC. SIMU Research believes that the successful approval of the supply license not only means that SMIC’s operations and performance will return to normal, but also that the communication and cooperation between SMIC and the relevant departments in the United States have been re-established, which will help SMIC and Further cooperation between American companies in the future removes obstacles. At the same time, this license also eased the current situation of China's chip production capacity shortage, and provided a guarantee for the rapid development of Chinese chip design companies.
However, the current political situation is changeable and the future situation is unpredictable. How can SMIC seize this opportunity in time to improve its situation? In this regard, Gu Wenjun, Chief Analyst of Core Research, told the reporter of "China Electronics News" that SMIC needs to proceed from four points in order to effectively seize this opportunity. First, SMIC can take this opportunity to establish close relationships with US government departments, suppliers and customers to ensure long-term development in the future. Second, while the window is open, SMIC needs to work hard to increase its purchasing power and purchase enough equipment as quickly as possible. Third, while establishing ties with US suppliers, SMIC must also strengthen its own management and control, and respect US laws and regulations while trading with the US. Fourth, while improving itself, as a leading domestic wafer manufacturing company, SMIC should also take this opportunity to support and lead other domestic chip manufacturers to integrate into international competition, and give them sufficient help and support. This can drive the development of the overall domestic semiconductor industry.
Does the approval of mature technologies such as 14nm and 28th mean that the export policy for technology nodes below 10nm will also be gradually liberalized? "This is not impossible. The approval of mature technologies such as 14 nanometers and 28, in a sense, has also opened up a precedent for the gradual liberalization in the future. However, as the saying goes, iron requires its own hard and surface. For the ever-changing landscape, if you want to achieve stable development in the future, you still need to work hard to improve your own strength and break through more core technologies." Gu Wenjun told a reporter from China Electronics News.
It is reported that after SMIC obtained the equipment supply license, some chip design companies such as MediaTek are seeking more production capacity from SMIC. Morgan Stanley predicts that SMIC’s revenue will increase by 10%-15% in 2021, which is adjusted upwards. The company's 2021 net profit per share forecast is 14%, and the figure for 2022 is also raised by 6%.