CITIC Securities Report Continues to Decay Electronics Industry

The decline in the price of memory chips accelerated, the demand for copper foil substrates weakened, and the OEM orders for wafer foundry customers tend to be conservative.... CITIC Securities released a research report yesterday to continue its decline in the electronics industry, and integrated China’s industry information on Taiwan’s view that the electronics industry’s third quarter peak season The symptoms of no-prosperity continued to show, and continued to maintain the industry's booming degree.

As Citic Securities has faltered its electronics industry for nearly a year. Did this "wolf" really come? Researchers from a number of agencies said that although the report on bearishness has been numb, it still cannot be taken lightly.

CITIC continues to be empty during the busy season

This year's electronics industry is quite different. After experiencing the impact of the global financial crisis, the seasonal characteristics of the electronics industry seem to have been a mess. In the first quarter of the off-season, the first quarter of the year was leaps and bounds. Memory chips, passive components and other products were once out of stock, and even the panic suspicions of artificial speculation were on the market. In the second quarter, the electronics industry still maintained a high degree of prosperity.

The original three quarters were the peak season for the electronics industry. However, this year's industry outlook seems to be somewhat "downside down." Liang Jun, a researcher in the electronics industry at CITIC Securities, said in a research report released yesterday that according to information from Taiwan last week, IC design, foundry, copper clad laminates, passive components, and PC peripherals continued to show up. The electronics industry is not prosperous during the peak season in the third quarter. The price of memory chips, the sensitive indicator of the booming trend in the electronics industry, has been declining at an accelerated rate, and continues to maintain the view that “the declining trend of the electronics industry in the third quarter has led to a split in performance and the fourth quarter of the year”. It also highlights the cyclical downside risk of the electronics industry. .

The argument supporting this view is that the data from research firm DRAMexchang shows that the memory index fell sharply by 2.3% last week; the reasons are the destocking of downstream electronics companies and the decline in the prices of various panel sizes.

To see if the decay has been a long time or need to observe

"Is it really a 'wolf came?'" A fund researcher jokingly stated that CITIC Securities has been short-term bearish for a year, and he is somewhat numb. Even so, he still can't take it lightly. In case this time he's been said, he's going to criticize the leader. After all, the company's funds are heavily invested in more than one company in the industry.

Looking at the data, "Daily Economic News" found that as early as last November, CITIC Securities lowered the rating of the electronics industry, from "stronger than the market" to "neutral." Later, CITIC Securities has been more cautious about the electronics industry's judgments, including the first quarter of strong sales in the off-season, and early March 3 this year, CITIC Securities continued to lower the industry rating with a report entitled "Electronic Cycle High on the Grip". On May 17th, another research report titled “Electronic Period Downturn Turning Point” said that the turning point of the global electronic cycle is coming soon.

"The trend of memory chips is often independent of the entire industry!" A researcher at an insurance fund investment institution in Beijing told the "Daily Economic News" that the price elasticity of memory chips is relatively large, and it is normal for relatively large fluctuations. In fact, it was in 2006. In 2008, the price of memory chips fell once, which was inconsistent with the trend of the industry, at least contrary to the trend in 2007. At present, the situation in the third quarter is not bad. Even if there are fluctuations in the fourth quarter of this year, it will not change the overall pattern of the year. He believes that do not underestimate the demand increase brought about by the Chinese factor. With the development of China's smart grid, high-speed rail construction, development of energy-saving appliances market, and future demand for the emerging application fields such as mobile payment and e-reading in the 3G era, the electronic industry boom may continue.

From the point of view of “Daily Economic News”, which is a comprehensive research team of electronics industry researchers, there is indeed a debate about the “turning point” of the electronics industry.