The degree of prosperity of the electronic industry has hit bottom

The electronics industry is directly affected by the consumption of electronic products as an upstream industry that includes terminal electronic products such as mobile phones, computers, and televisions.

Since the European debt crisis this year, the demand for electronic products has continued to slump, and the boom in the electronics industry has continued to decline. Shenyin Wanguo believes that the booming of the electronics industry has entered the bottom of the cycle. Considering countercyclical investment, cyclical investment opportunities are about to emerge.

The third quarter will be the persistent low of global electronic demand in the inventory cycle. In September, the growth rate of global semiconductor sales was slightly better than that in August, which was a year-on-year increase of 2.0%. In October, the BB values ​​of semiconductor equipment in North America and Japan dropped from 0.80, 0.76 to 0.75, 0.75, respectively, and investment in the industry continued to decline. This shows that international companies are pessimistic about the industry's demand and tighten investment to wait for Chunyan.

In October, sales of Taiwan Electronics continued to weaken. In October, the overall revenue of the electronics industry in Taiwan increased by 3.13% year-on-year, a growth of 6.12% compared to the previous period, and the situation in the weak season was slightly noticed. Specifically, October sales increased by more than 10% year-on-year, including handset manufacturing (17.3%), optical lenses (19.4%), NB and mobile phone components (25.1%), and EMS (23.2%), which fell by more than 10%. Mainly DRAM manufacturing (-42.6%), display (-40.7%), solar energy (-56.0%), passive components (-10.4%), LED and optical components (-14.8%), STN panel (-18.3%).

Analysis of the status of the third quarterly report of international electronics companies, the overall semiconductor industry inventory level is still rising. Specifically, IC foundry, IC packaging and testing and brand enterprise inventory adjustments have achieved initial success, and EMS, IC design, and IDM companies' inventory levels are still rising.

Judging from the inventory situation of A-share electronics companies, the number of inventory days in the third quarter increased slightly, and inventory adjustments continued. Shenyin Wanguo believes that from the current industry's willingness to destock and actual orders, the third quarter will be the cycle high of inventory levels.

The October industry’s excess return for the electronics industry was -2.6%, and the cumulative excess return since the beginning of 2011 was -12.9%. In October, the electronic sector gained 1.6% and the cumulative decline in 2011 was 28.2%, ranking 18th in October's relative return in 23 SWS. Shenyin Wanguo believes that the main reason is that the disclosure of the three quarterly reports has slowed the growth of most companies. A considerable portion of the company’s growth has declined slightly, and the peak season has become less of a reality. The profit forecast of listed companies has been lowered.

Institutions are optimistic about LED lighting In 2011, the global economy was affected by the European debt crisis. Demand for electronic products continued to slump and the electronics industry continued to decline. Under the weak demand, Shenyin Wanguo believes that the low-end products will become the main body of Christmas consumption, and will give Chinese terminal companies and component companies a good opportunity to increase market share and develop quality customers.

Judging from the current industry's profitability, inventory, and demand, the booming of the electronics industry has entered the bottom of the cycle, although the first quarter of 2012 will continue to decline due to the number of days of construction started and the impact of the Thai flood, but this factor may have been expected by the market. From the perspective of counter-cyclical investment, cyclical investment opportunities will emerge with the arrival of the bottom of the cycle.

In addition, LED field adjustments gradually entered the latter part of the year and lighting applications have become popular. In the continued decline in LED prices, LED fluorescent lamps and downlights have become economical.

At the same time, with the tilt of the national policy on green lighting, and the upcoming energy-saving lighting subsidies will be conducive to the rise of LED lighting applications. In 2011, due to the large-scale investment in 2010, it became the capacity-digesting year. After undergoing the adjustment of the economy, Shenyin Wanguo expects that the first quarter of 2012 will be the time window for changes in the industry's business climate.