One-week concept stocks: New energy vehicles passively enter the price increase period, and intelligence promotes the growth of the vehicle camera module industry

Jiwei Network News, this week, Chinese mainland wafer foundry SMIC released the fourth quarter of 2021 financial report, a number of operating indicators once again hit a record high, single-quarter revenue reached $1.5801 billion, gross profit reached $552.8 million, an increase of 212.7% year-on-year, gross profit margin further improved to 35.0%.

At the same time, at the moment when the price of materials in the upstream of the new energy vehicle industry chain is soaring, mainstream auto brands have increased the prices of some of their models. For the car companies that have not increased their prices, some analysts believe that these car companies will also raise prices in the near future, after all, the cost is rising. In addition, in the era of intelligent development of automobiles, the vehicle camera module industry has also ushered in development opportunities.

SMIC's revenue will exceed US$5.4 billion in 2021, and its production capacity will double when new projects are fully operational

On February 10, SMIC released its fourth quarter 2021 financial report, and a number of operating indicators once again hit a record high, with single-quarter revenue reaching $1,580.1 million and gross profit reaching $552.8 million, up 212.7% year-on-year, and gross margin further improving to 35.0%.

According to the financial report, SMIC's total revenue in 2021 also hit an all-time high of US$5.4431 billion, ranking fourth in the world, and with a revenue growth rate of 39%, it became the world's top four fastest-growing wafer foundries.

It is worth mentioning that even under the influence of complex geopolitical factors and multiple uncertainties such as the new crown epidemic, SMIC's expansion of production in 2021 still exceeded expectations, strengthening the deployment of mature process capacity, expanding the strategic layout of multiple platforms, and continuously improving the company's profitability.

SMIC's monthly production capacity in the fourth quarter of 2020 was 520,750 8-inch wafers, and after a year of 8-inch and 12-inch capacity expansion, the monthly production capacity in the fourth quarter of 2021 has been rewritten to 621,000 units. In 2021, the production capacity will be expanded by more than 100,000 8-inch wafers.

Regarding the specific situation of the expansion, SMIC co-CEO Zhao Haijun said that the two projects in Beijing and Shenzhen are steadily advancing and are expected to be put into production before the end of this year. In 2022, the company plans to increase its capacity more than in 2021 (100,000 8-inch wafers per month). At present, the equipment delivery cycle is further extended, and SMIC may have a certain delay in the production time of the new capacity, but will maintain strategic cooperation with suppliers and strive to deliver capacity according to the established goals. When the three new projects are fully operational, they will double the company's production capacity.

New energy vehicles passively enter the price increase period

The outstanding performance of wafer foundries also reflects the shortage of chips from the side. After the reduction of production in 2021 due to the impact of chip shortage, the new energy automobile industry will face the problem of rising prices in the upstream lithium battery industry chain in 2022, resulting in rising car manufacturing costs, and new energy vehicles will passively enter the price increase tide.

Previously, a number of new energy vehicle brands have raised the price of some of their models, of which Tesla is the most frequent price adjustment, since August 2021, has been raised 5 times the price, December 31, again officially announced that its Model Y rear-wheel drive version of the model increased by 21,000 yuan, the price of the model also came to more than 300,000.

Among other car companies, Nezha rose by 2000-5000 yuan; the price of all models under Xiaopeng rose by 4300-5900 yuan; the price of some models of Aian increased by 4000 yuan; the zero-run low-end models also rose by 8000 yuan year-on-year; and the volkswagen ID family all models rose by 5400 yuan...

Some market voices believe that the decline in subsidies has led to an increase in the price of new cars. But this is not the root cause of the price increase of car companies, the author noted that some car companies revealed the cost pressure caused by the price increase of upstream raw materials when the price increase, such as BYD, which clearly stated in the price increase letter that due to the sharp rise in raw material prices and the decline of new energy car purchase subsidies, it was decided to raise the price of its dynasty network and ocean network related new energy models ranging from 1000-7000 yuan.

The reason for the general price increase of new energy vehicles is that the price of lithium battery materials rose sharply last year, resulting in a sharp increase in the price of lithium batteries, which has exceeded the affordability of car companies, and for downstream OEMs, the cost pressure brought by the price increase of upstream raw materials is increasing, and the price of automobiles has to be raised.

For the future price trend, analysts said, "It is difficult to judge at present, and the situation of short supply (power batteries) will continue to exist for a long time." However, BYD Chairman Wang Chuanfu previously told Aijiwei that the imbalance between supply and demand has allowed a large amount of capital to pour into the lithium battery industry chain, and with the help of capital, the future production capacity and output will be greatly improved, and the price increase caused by the imbalance between supply and demand will gradually return to normal levels.

The car camera module industry will explode

Although the current new energy vehicles are affected by the price increase of upstream materials, the trend of electrification will not change, which also lays the foundation for the intelligent development of automobiles. The on-board camera module industry related to automotive intelligence will also usher in an outbreak.

The emergence of Tesla marks the rise of the era of electric vehicles; and the "pure visual autonomous driving solution" it has been advocating has also become the most powerful boost engine for the growth of the in-vehicle camera module market. In 2016, Tesla launched Autopilot Hardware 2.0, which is equipped with 8 camera sensors in this set of solutions, which has become an important hardware support in its automotive intelligent solutions and has formed a certain demonstration effect on the industry.

As the industry knows, Musk has been holding high the banner of "pure visual solution" on the road to achieving automatic driving. Because of this, Tesla also first put forward the demand for purchasing a single material for the in-vehicle image module industry.

According to supply chain manufacturers, Tesla decided to outsource the camera module order to a professional module factory at the beginning of the implementation of the pure visual program, and Zhishen Technology is also the first manufacturer in China to supply tesla with a car camera module; for the experienced Apple supplier Zhishen Technology, the difficulty of ordinary car camera modules is not large, so the company's cooperation with Tesla was soon established.

In the past two years, the electric vehicle styles on the market have blossomed, and in order to achieve the ultimate goal of automatic driving and ensure driving safety to a greater extent, more and more terminals have implemented lidar, or radar + vision solutions, while Tesla under Musk's leadership has always believed in its own concept.

Some manufacturers pointed out that the price of components in the car camera is very high, and these products need to spend a lot of money even if they have passed the car regulation certification, so the price of these components is destined to remain at a certain level. If it is not a malicious bargaining, the price of the module naturally cannot be too low.

It should be noted that the demand for cameras for either scheme continues to grow. CICC pointed out in the report that we judge that the wave of automotive intelligence will further increase the amount of on-board cameras, and the centralized architecture will drive product prices down, which is conducive to achieving faster promotion. We estimate that by 2025, the domestic car camera market will reach 22.7 billion yuan, and the CAGR in 2020-25 will be 30%. We are optimistic about the head domestic manufacturers in the industrial chain of CIS, optical components and module packaging.

(Proofreading/New)