Semiconductor Rebound Fuels Innovation

The end of the year is often a time for reflection and predictions, and as the earnings forecast for 2024 is being unveiled, the Integrated Circuit companies on the Science and Technology Innovation Board are showing promising signs of recoveryThese optimistic projections come from a variety of companies that span different sectors of this complex industry, ranging from wafer foundries and chip design to semiconductor equipmentTheir forecasts suggest a robust upward momentum in China's domestic semiconductor sector.

Analysts have reported that the recovery in the consumer electronics market, fueled in part by the rise of artificial intelligence, is contributing to this bullish outlookIn 2024, it is projected that China's smartphone market will see shipments reach approximately 286 million units, representing a 5.6% increase from the previous yearThis marks a significant rebound after two challenging years for the industry, suggesting a renewed demand for semiconductor components

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Meanwhile, smart home technology is gaining traction, driven by rapid product iterations and advancements in technology, with the domestic smart home market expected to hit a scale of 784.8 billion yuan, a roughly 10% increase year-over-yearThese developments are poised to create fruitful opportunities for upstream chip manufacturers associated with smartphones and smart home devices.

One notable player in the smart audio System on Chip (SoC) realm, Hengxuan Technology, anticipates a staggering revenue growth in 2024, with projected figures ranging from 3.243 billion to 3.283 billion yuan, marking a growth rate of approximately 49% to 51%. This surge is expected to be paralleled by net profits climbing as much as 280%, reflecting the company's strategic focus on versatile smart wearable chips catering to diverse consumer needsWith competition intensifying in the smart Bluetooth earphones and smartwatch markets, Hengxuan Technology foresees strong expansion prospects in the AI-driven context of wearable technology.

Another prominent entity, Espressif Systems, which specializes in Internet of Things (IoT) chips, forecasts annual revenues ranging from 1.985 billion to 2.015 billion yuan, corresponding to a year-over-year increase of 39% to 41%. Their strategy appears to be founded on a broader long-term vision, as they aim to capitalize on the burgeoning IoT landscape without overly relying on short-term spikes in specific sectors.

Meanwhile, Amlogic, a smart home chip manufacturer, is projecting 2024 revenues to reach approximately 5.92 billion yuan, which translates to a growth rate of about 10.22%. Their predictions point to record highs in both revenue and net profits, bolstered by robust sales in multiple product lines during carrier bidding processes in China

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Amlogic also forecasts continued growth into 2025, promising a positive trend for their operational performance.

On a larger scale, Haiguang Information, a top-tier domestic CPU manufacturer, is optimistically predicting revenues between 8.72 billion to 9.53 billion yuan—an annual growth of around 45% to 58%. This growth reflects robust ongoing demand for their products, as they expand into relevant applications across data centers, cloud computing, and other sophisticated use casesThe dynamics of the market are evolving, ensuring opportunities for domestic players in a space often dominated by foreign technologies.

As for chip suppliers specializing in interconnect solutions, Lanqi Technology is also poised for a remarkable year, with expected revenue growth near 59%, pushing their total earnings to roughly 3.639 billion yuanAn impressive expansion in memory interface and module support demands underscores their robust product pipeline, coupled with the successful launch of new high-performance chips that will significantly enhance revenue streams.

In the competitive arena of semiconductor materials and equipment, companies are ramping up their research and development to seize growth opportunities amidst global technological transformations

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Industry analysts project that China's acquisition of semiconductor equipment will reach a new height in 2024, surpassing $40 billion for the first timeThis projected spike reflects a response to increasing pressure on domestic production capabilities as geopolitical tensions mount.

Among the companies benefitting from this surge is Zhongwei Technology, which specializes in etching and film deposition equipment, projecting revenues of about 9.065 billion yuan—a significant year-on-year increase of around 44.73%. The increase in sales of etching equipment signals renewed demand in the chip manufacturing environment, especially for high-end products essential for advanced processes.

Another player to note, Huahaiqingke, anticipates impressive net earnings ranging from 970 million to 1.08 billion yuan in 2024, bolstered by their history of innovation in chemical mechanical polishing (CMP) equipment

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Their success reflects a conscious effort towards achieving self-sufficiency in critical manufacturing processes that serve the 12-inch integrated circuits market.

In light of all these developments, companies such as TuoJing Technology and Shengmei Shanghai are marking new records in their revenue streamsTuoJing is aiming for 4 to 4.2 billion yuan in 2024, while Shengmei projects between 5.6 and 5.88 billion yuan, greatly exceeding their previous earnings and signifying strong growth trajectories following their initial public offerings.

The strategic platform role of the Science and Technology Innovation Board has notably accelerated the convergence of advanced production elements into the integrated circuit domainCurrently, approximately 120 integrated circuit companies are represented, showcasing a robust ecosystem covering everything from design and manufacturing to equipment and material supply

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