In-depth analysis of China’s semiconductor industry policy dynamics and analog chip industry chain

First, import chip origin declaration policy adjustment and impact

Policy background: The China Semiconductor Industry Association recently issued a document clarifying that the rules for identifying the origin of imported chips should follow the “four-part tax principle” of the General Administration of Customs, that is, the origin of integrated circuits should be declared based on the location of the wafer flow factory. Previously, the identification of origin may be based on the place of packaging or other links, and the new rules further strengthen the geographical attributes of the production link.

Key points:

Change of declaration standard: Regardless of whether the chip is packaged or not, the origin of the import declaration is based on the location of the wafer manufacturing link (the place of the flow sheet).

Benefit area

Domestic analog chip design enterprises: due to the acceleration of domestic substitution, they directly benefit from the import substitution dividend.

Foundry leader: Platform manufacturers with rich analog processes, such as Huahong Semiconductor, are expected to undertake more wafer demand.

Industry impact:

Supply chain reconstruction: The new regulations or promote the further localization of the domestic analog chip industry chain, reduce the dependence on overseas streaming links.

Cost optimization: Domestic film cost advantage superimposed tariff policy buffer, enhance the competitiveness of local enterprises.

Second, the panoramic disassembly of the analog chip industry chain

Industrial chain structure:

Upstream:

Materials: Silicon wafer (base plate), electronic gas (etching/deposition process), photoresist (photolithographic core material), target material, etc.

Equipment: lithography machine (ASML, etc.), etching machine (NAURA, etc.), film deposition equipment, test equipment (Terida, etc.).

Midstream:

Chip design

Model: IDM (Texas Instruments, Adno) or Fabless (Saint Bond shares, Ripple).

Key link: EDA software design, simulation verification (Cadence/Synopsys).

Manufacturing and encapsulation: Wafer manufacturing (SMIC, Huahong Semiconductor), packaging and testing (Technology, Tongfu Micro).

Downstream:

Application fields: communication (5G base station/mobile phone), automotive electronics (ADAS/ in-car entertainment), industrial control (frequency converter/sensor), consumer electronics (smart terminal), medical equipment (monitor/ultrasound equipment), etc.

Third, analog chip enterprise profitability ranking (TOP10)

Based on 34 sample enterprises, with return on equity (ROE), gross margin and net margin as core indicators, combined with performance forecast and business highlight analysis:

Tenth core Pengwei

Industry segmentation: Analog chip design

Profitability: Return on equity 4.52%, gross margin 36.75%, net margin 11.31%

Performance forecast: ROE has fluctuated between 3% and 7% in the last three years, with the latest forecast average 5.91%

Main products: Integrated circuit is the most important source of revenue, accounting for 99.61% of revenue, gross profit margin 37.00%

Company highlights: Xinpengwei is an important supplier of power management chips for domestic smart home appliances, standard power supplies, mobile digital and other industries, and realizes mass replacement of imported brands in domestic household appliances, standard power supplies and other fields.

（ From: Little Doctor of Finance ）