It was learned from the Intelligent Finance and Economics APP that China Great Wall Securities released a research report stating that the global semiconductor market size in 24Q2 is approximately $149.9 billion, with an 18% year-on-year growth and a 6% quarter-on-quarter growth. If storage chip market is excluded, the global semiconductor market size in 24Q2 is approximately $108.8 billion, with a mere 4% year-on-year growth and only 1% quarter-on-quarter growth. It can be seen from this that downstream demand recovery remains weak. According to statistics, the days of inventory for SW semiconductor companies in 24Q2 is approximately 169 days, a decrease of 10 days from the previous quarter, with the most significant decreases seen in the inventory days of logic ICs and signal chain chips. With the traditional peak season for consumer electronics in the third quarter and the continuous launch of AI in the second half of the year, it is expected that inventory days will continue to improve.

China Great Wall's main points are as follows:

The global semiconductor market in 24Q2 saw a year-on-year increase of 18%, with a mere 4% increase excluding storage, indicative of a slow recovery in downstream demand. The global semiconductor market size in 24Q2 is approximately $149.9 billion, an 18% year-on-year growth, and a 6% quarter-on-quarter growth. If storage chip market is excluded, the global semiconductor market size in 24Q2 is approximately $108.8 billion, with a mere 4% year-on-year growth and only 1% quarter-on-quarter growth. It can be seen from this that downstream demand recovery remains weak.

With slow demand recovery, the wafer fab utilization rate in 24Q2 increased slightly by +0.6% to 83.6% compared to the previous quarter, remaining at a historical low. Due to the slow recovery in downstream semiconductor demand, the global wafer fab capacity utilization rate in 24Q2 saw a slight increase of 0.6% to 83.6%, still below the historical average level of 85.3%. Leading wafer foundries Taiwan Semiconductor and Semiconductor Manufacturing International Corporation guided for a median quarter-on-quarter revenue increase of +9.5% and +14.0% respectively in 24Q3. Strong demand for advanced processes, accelerated by local demand due to geopolitical reasons, is expected to further boost wafer fab utilization rates in Q3.

Specialized chips for the consumer and computer sectors showed strong performance in 24Q2, while the market size of dedicated chips for mobile phones decreased compared to the previous quarter. The market sizes of storage/Micro/logic/analog chips in 24Q2 increased by +26% / +4% / +2% / -1% respectively compared to the previous quarter; storage chip demand remained strong, and Micro/logic chip sales improved slightly, while the analog market remained under pressure. Looking at downstream application areas, specialized chips for consumer electronics/computer sectors showed impressive performance, with market sizes increasing by +9% / 9% respectively, while the market for dedicated chips in the smartphone sector decreased by 7%, indicating a still relatively slow recovery in downstream demand.

High Bandwidth Memory (HBM) in short supply & enterprise-level SSD orders increased, leading to a 21% quarter-on-quarter increase in storage ASP, with analog prices remaining under pressure. The global semiconductor price index in 24Q2 was approximately 98.18, a 4% decrease quarter-on-quarter, mainly due to pressure on analog chip prices. Specifically, storage and Micro unit prices increased by +21% / +6% quarter-on-quarter, driven by HBM supply shortages and increased enterprise-level SSD orders. Meanwhile, logic and analog ASP declined by -8% / -13% quarter-on-quarter; analog chip prices remain at a low level mainly due to intense industry competition.

In 24Q2, the inventory turnover days of semiconductors decreased by 10 days compared to the previous quarter, with the most significant improvement in equipment and logic IC. The electronic industry's business climate is improving, with the 24Q2 Japan integrated circuit inventory ratio index of about 120.90, a decrease of 7.50 compared to the previous quarter. According to statistics from China Great Wall Securities, the inventory turnover days of SW semiconductor companies in 24Q2 is about 169 days, a decrease of 10 days compared to the previous quarter, with the most significant decrease in inventory turnover days for logic IC and signal chain chips. With the traditional peak season for consumer electronics in the third quarter and the launch of AI on the edge in the second half of the year, it is expected that the inventory turnover days will continue to improve.

Moderate recovery in demand for mobile phones and PCs, imminent development of AI on the edge, focus on the AI industry chain & undervalued leading companies.

Imminent development of AI on the edge, embracing the fourth industrial revolution, focus on AI industry chain-related companies, including VeriSilicon Microelectronics (Shanghai) Co., Ltd. (688521.SH) (IP licensing & chip production), Gigadevice Semiconductor Inc. (603986.SH) (storage), Jangho Longholding Co., Ltd. (301308.SZ) (storage modules), Montage Technology (688008.SH) (storage interface chips), Silego Technology (688173.SH) (power management chips), JCET Group Co., Ltd. (600584.SH) (advanced packaging), and others.

Weak recovery in consumer electronics such as mobile phones and PCs, bullish on "turnaround & undervalued" companies, including Maxscend Microelectronics Co., Ltd. (300782.SZ) (RF front-end chips), Will Semiconductor (603501.SH) (CMOS sensors), Wingtech Technology (600745.SH) (IDM+ smartphone ODM+ optical modules), Ingenic Semiconductor (300233.SZ) (automotive-grade chips), and Times Electric Co., Ltd. (688187.SH) (power semiconductors).

Risk warning: insufficient downstream demand risk; geopolitical risk; core competitiveness risk; valuation risk, etc.