1. Analysis of Semiconductor Industry Trend (8.05-8.11)

(1) Basic situation of the rise and fall of semiconductor industry
Source: collated by Huaxin Research Institute
Fig. 1 The world's leading semiconductor index rose or fell last week
Last week, the Philadelphia Semiconductor Index fell 1.62%, below the Nasdaq Index by 1.06 percentage points; the Taiwan Semiconductor Index rose 0.30%. China's semiconductor development index fell 5.98%, lower than the A-share index by 2.74 percentage points. Eight companies rose and 58 companies fell in China's semiconductor development index last week. Among them, the companies with a larger increase are Saint Bond (+7.37%) and Changchuan Science and Technology (+6.38%).
According to the trend of the index, the semiconductor development index of China mainland continued to decline last week. At present, China's science and technology enterprises are accelerating the pace of innovation and the 5G process continues to advance, and the development prospects of the mainland semiconductor industry are promising.
Huawei released Hongmeng OS, breaking through the technological siege and entering the key area. On August 9, Huawei hosted a global developer conference and launched Hongmeng Operating System. The system aims to meet the high-standard connection requirements of full-scene intelligent experience. It proposes four system solutions: distributed architecture to achieve seamless collaborative experience across terminals; delay engine and high-performance IPC technology to achieve natural fluency of the system. The micro-kernel architecture reshapes the trusted security of terminal devices, and develops multi-terminal deployment at one time to realize cross-terminal ecological sharing. The release of Hongmeng OS shows that Huawei has entered the most core area of software. Considering that Huawei has been in the field of semiconductor chips for a long time before, Huawei will achieve a comprehensive breakthrough in software and hardware of electronic products. 5G mobile phone will be the definite direction of the electronic industry in 2020, and the electronic industry chain including semiconductor will usher in development opportunities.
The semiconductor sector will be affected by a new round of tax increases. On August 1st, US President Trump announced that during the Sino-US negotiations, he would impose an additional 10% tariff on the remaining 300 billion US dollars imported from China on September 1st, with mobile phones and computer products bearing the brunt. The total value of both products exceeded 40 billion US dollars, 44.6 billion US dollars and 41.1 billion US dollars, respectively. In addition, there are still 9.2 billion US dollars and 8.6 billion US dollars in other electronic products and other consumer electronic products, and the total number of electronic related products exceeds 100 billion US dollars. There is a risk of escalation in trade disputes, which will suppress semiconductor market sentiment in the short term. With repeated trade frictions between China and the United States and the risk of further embargo on the supply chain of China's electronic industry, it is urgent for China to accelerate the process of domestic substitution of core assets, especially in the field of semiconductor industry.
We believe that Huawei's breakthrough in the electronic field will speed up the progress of China's semiconductor industry. In addition, the escalation of Sino-US trade war may cause short-term fluctuations in the semiconductor market, and we suggest that we pay attention to its risk factors.
(2) Increase and decrease in sub-sectors
Source: collated by Huaxin Research Institute
Fig. 2. Growth and decline in sub-sectors
In terms of sub-sectors, the semiconductor design, sealing, manufacturing, equipment, materials and discrete devices industries in mainland China all declined last week. Among them, the design industry index declined by 7.43%, the sealing industry index declined by 1.93%, the manufacturing industry index declined by 1.03%, the equipment industry index declined by 5.17%, the material industry index rose by 5.54%,

and the discrete device industry index declined by 7.75%.
Design area: Recently, Ziguang Zhanrui, the second largest mobile chip developer in China, said it would commercialize a new generation of 5G SoC (system > in the second half of 2020).
Manufacturing: In the peak season, market warming was limited, and the price of mobile memory fell more than 10% in the third quarter. The price declines of mainstream specifications, whether discrete or eMCP/uMCP products, were mostly concentrated in the 10%-15% range. Observing the price trend of mobile memory in the fourth quarter of this year, brand factories are expected to produce ahead of the market demand in January next year in response to the back-to-home shortage in the Chinese Lunar New Year. It is estimated that Smartphone Production in the fourth quarter will be flat in the third quarter. On the other hand, since the first quarter of this year, the average price of mobile memory has fallen by 10%-15% in three consecutive quarters, making the average price of mobile memory 17% lower than that at the beginning of 2016. It has challenged the control limits of the three major manufacturers on total cost. It is estimated that the decline rate in the fourth quarter will converge compared with the first three quarters, but the downward trend remains unchanged. 。
Equipment field: Recently, China Kowloon Microsoft said that its 2.8 billion yuan semiconductor intelligent manufacturing project will be completed by the end of the year. At present, the construction of geosphere beams has been completed 70%, the installation of steel structures has been completed 35%, and the progress is two months ahead of expectation. Zhongke Jiuwei aims at the demand for core components and equipment of integrated circuit equipment at home and abroad. It mainly produces all magnetic levitation clean acquisition equipment, high precision measurement equipment and integrated circuit chip. The project has invested 1 billion yuan since its start, and will be completed and put into operation by the end of this year. After the completion of the project, it is expected to promote the process of domestic semiconductor equipment localization.
Material field: Last week, Samsung Electronics decided to replace more than 220 Japanese raw materials and chemicals used in semiconductor manufacturing with domestic or other national products. Samsung plans to stop using Nissan materials in the manufacturing process as the possibility of Japan's export controls affecting Korean semiconductor production increases. Samsung Electronics is currently in contact with a number of semiconductor raw material manufacturers to investigate whether their products can replace Nissan materials. At present, the consultation between Samsung and some semiconductor enterprises has made some progress, and some products have entered the testing stage of actual production line.
(3) The list of the rise and fall last week