Wisdom Financial APP learned that Open Source Securities issued a research report stating that downstream demand in the semiconductor industry is gradually recovering, and overlaid with AI innovation to stimulate terminal upgrades. The revenue prosperity of multiple sectors of Taiex has begun to rise significantly. By 2024, semiconductor sales are expected to increase significantly year-on-year. In the wafer foundry process, the revenue of TSMC in 2024M6 maintained year-on-year growth, and the company's actual cumulative revenue in 2024Q2 was NT$673.51 billion, a year-on-year increase of +40.07%, and a quarter-on-quarter increase of +13.64%, exceeding the upper limit of the forecast range. In the final testing process, the revenue of UMC and Powerchip continued to improve year-on-year in 2024M6. The bank said that it is optimistic about the future growth of multiple sectors such as SoC, storage chips, and semiconductor equipment companies' performance.

The views of Open Source Securities are as follows:

Upstream manufacturing: The recovery of consumer electronics and the stimulus of AI have driven the demand for advanced processes and CoWoS.

In the wafer foundry process, the revenue of TSMC in 2024M6 maintained year-on-year growth, and the company's actual cumulative revenue in 2024Q2 was NT$673.51 billion, a year-on-year increase of +40.07%, and a quarter-on-quarter increase of +13.64%, exceeding the upper limit of the forecast range. According to the Commercial Times, the company's revenue in 2024Q2 is estimated to exceed expectations mainly due to strong HPC demand; and under the strong demand for smartphones and HPC, revenue in 2024Q3 will maintain a growth trend. In the final testing process, the revenue of UMC and Powerchip continued to improve year-on-year in 2024M6. WSTS Investment Control stated that 2024 is a year of recovery, and it is expected to clear inventory in the first half of the year and accelerate growth in the second half of the year. In addition, UMC and Powerchip have accelerated the layout of advanced packaging and CoWoS production capacity, with capital expenditures in 2024 reaching a record high.

Design: Multiple sectors' revenues recover, and demand recovery drives inventory to gradually clear.

In 2024M6, the monthly revenue of SoC manufacturers in China and Taiwan continued to grow, and the bank is optimistic that the increasing demand for new phone models, continuous penetration of WiFi 7, and the launch of new AI servers will bring about an increase in SoC demand in the second half of the year. In terms of simulation and drive, the revenue of most manufacturers in 2024M6 grew year-on-year, and demand steadily recovered, with strong shipping momentum. MCU manufacturer's monthly revenue in 2024M6 continued to decline year-on-year. The bank is optimistic that the clearing of inventory by downstream channel distributors and customers will bring about revenue repair, and revenue is expected to recover in the second half of the year. The revenue performance of the storage sector in 2024M6 remains at a relatively high level, and the performance of multiple companies has increased significantly year-on-year. Currently, AI servers are driving the growth of HBM and DDR5 demand. The three major original equipment manufacturers are putting more emphasis on positioning, and the future market structure of this subdivision market is expected to be significantly optimized, boosting product prices and the recovery of various manufacturers' performance.

Consumer electronics and PCBs: The revenues of multiple sectors have increased significantly year-on-year, and the outlook for 2024 is optimistic.

The revenue growth of the optical industry is significant. The year-on-year growth rates of Largan Precision and Yujingguang's revenue in 2024M6 were 50% and 35%, respectively. It is expected that more new models will upgrade lenses in the second half of the year to drive the development of the industry. PC terminals are also showing a trend of recovery. The year-on-year growth rates of Asus and Acer's revenue in 2024M6 were 21% and 7%, respectively. AIPC is expected to drive the development of the entire PC industry. The monthly revenue performance of China and Taiwan's panel manufacturers in 2024M6 show differentiation. The bank is optimistic about the impact of sporting events on TV sales, and the panel market is expected to continue to recover in the second half of 2024. The monthly revenue of PCB manufacturers in 2024M6 maintained a growth trend. Looking forward to the second half of 2024, the demand for high-end business such as consumer electronics, AI servers, and low-orbit satellites is expected to drive the continued high growth of their business. The revenue of CCL manufacturers in 2024M6 increased year-on-year, with the gradual recovery of general server demand and the driving force of high-prosperity AI servers. The outlook for the whole year of 2024 is optimistic. In 2024M6, the performance of most power manufacturers improved significantly. With the clearance of the industry chain inventory and further demand recovery, it is expected that the prosperity of the power semiconductor industry will increase in the second half of the year.

Risk warning: International policy impacts, intensified market competition, demand recovery, and unexpected domestic substitution.