2005 analysis of electronic components industry investment growth slowed

2004 upgrading of products and equipment investment will be upstream of the electronic components industry to the high point of the economy, and in 2005, the computer replacement boom receded, mobile phone market growth, the effects of 3G and slow progress of digital TV and other factors, the domestic electronic components industry growth continued to slow down, and the first quarter of this year, due to enter the off-season sales and the high cost of raw materials, there is a sharp decline in the phenomenon of benefit. We selected 11 electronic components listed companies as samples. From the operation they can be seen in the first quarter of this year, although the overall industry continues to maintain growth, but growth is slowing down, but some companies appear sharp economic downturn situation, income does not increase profits phenomenon is obvious.

Industry point of view, we can find that TFT-LCD, the integrated circuit industry, CCL industry profitability declined rapidly; while the capacitance resistance industry development is relatively stable operation; discrete devices industry relatively good; and the glass manufacturing industry is the emergence of a slight differentiation.

Semiconductor industry

International: Boom decline in the first quarter, better than expected

According to the semiconductor industry association (SIA) published a research report, due to strong demand for mobile phone, personal computer and consumer electronic products, the first quarter of 2005 global semiconductor sales revenue over the same period last year increased by 13.2% from the first quarter of 2004 of $48 billion 900 million increased to $55 billion 300 million. However, compared with the fourth quarter of 2004, sales revenue of $55 billion 100 million in the first quarter of 2005, global semiconductor sales revenue increased by only $0.4%.

First quarter is usually the chip industry sales season, while the first quarter of this year sales strong growth. In this regard, Gartner announced the 2005 increase in the global semiconductor market growth rate, from the original 3.6% to 5.9%, sales are expected to reach $233 billion, and is expected in 2006 is expected to grow by 6.5%, up to $248 billion.

: the overall growth of domestic local enterprises still fell significantly

On the domestic market, many professional organizations agree that domestic semiconductor market demand and growth is far higher than other market level. However, from the domestic semiconductor companies operating in the first quarter, the situation is not ideal. Changjiang electronics technology and Silan company revenue growth, but net profit decreased significantly. We believe that in addition to affected by the decline in business, the two companies or package design and manufacture of products are mainly concentrated in the low-end market, the rise in raw material prices and shrinking of the market of the company without a clear competitive advantage, thus leading to reduced orders, long power technology in the first quarter operating rate is only 70%. Although the rapid growth of the domestic semiconductor industry, but the high profit in the high-end market for foreign companies to occupy, so local companies do not fully share the continued growth of the domestic semiconductor industry. We believe that the domestic semiconductor companies in the low-end market will still face greater pressure in a very long period of time, but in 3G, digital TV, NGN and other emerging technology driven, the second half of 2005 the industry will emerge from lows, although the growth rate will slow down. At the same time, local enterprises have been preliminary into the related field of high-end, such as long power technology into the convex block production and WLCSP packaging. Silan in the future is expected to break the first field of CD servo chip. While continuing to improve the level of production line, PHILPS joint venture with the production of light source products, as well as providing semiconductor chip foundry services.

Display industry

LCD: price stability, weight reduction and increased profits

First quarter of this year, China's Taiwan region LCD monitor shipments grew by 33.7% over the previous year, reaching 13 million 800 thousand units, but its overall revenues fell by 17% over the previous year, $2 billion 800 million. The number 5 line, 6 line have been put into production, the global LCD panel prices began to decline rapidly since the third quarter of last year, a 15 inch panel fell to $230 from $120, 17 inch panel fell to $295 from $152, from the recent price trend, the price of small size has entered a relatively stable range. In 4 and May, the price is small rise 15 inches, 17 inches less rebound, the current price has risen to $165, compared with the lows of nearly 10%.

For the future, we believe that due to the cost factors of small size panel prices will remain stable in a certain period of time, while in large size panel due to the glass substrate supporting capacity can not keep up with the panel plant expansion, the release of production capacity will be slow, with relatively strong demand, we believe that the second half will rebound panel prices however, the long term, because each panel maker continues to increase manufacturing capacity, the future will continue to reduce the cost of various sizes, panel prices to maintain long-term downward trend.

Domestic TFT-LCD industry, the level of development will be in a very long time lags behind international peers. Although the LCD panel prices stabilize, but the BOE, SVA 5 generation line in good climbing, and similar foreign companies can take advantage of the high generation line of profit to make up for the low line loss, so the two companies in a certain period of time will remain weak in the same class of foreign enterprises. But the long term, with the further enlargement of global capacity, increase the high generation line of BOE and SVA, the pressure will be greater, on the domestic industry prospects we caution.

Glass: pressure relief, to find a breakthrough

Since the fourth quarter of last year, the rapid decline in the price of LCD glass products, led to some decline in demand. Part of the foreign glass production line transferred to domestic