On the morning of December 4th, multiple chip concepts such as automotive chips, semiconductors, MCU chips, and storage chips led the way in gains. Among the constituent stocks, Dawei Corporation (002213. SZ, stock price 13.13 yuan, market value 3.114 billion yuan) and Huangting International (000056. SZ, stock price 3.66 yuan, market value 4.429 billion yuan) hit the daily limit up, while Chengdu Huawei (688709. SH, stock price 27.3 yuan, market value 17.386 billion yuan), Fuhanwei (300613. SZ, stock price 49.53 yuan, market value 11.435 billion yuan), and Naxinwei (688052. SH, stock price 128.09 yuan, market value 18.256 billion yuan) rose more than 5%.

On the news side, on the evening of the 3rd, the China Semiconductor Industry Association, the China Internet Association, the China Automobile Industry Association and the China Communications Enterprise Association successively issued statements, saying that the randomness of the U.S. regulatory measures against China has affected the stable supply of American chip products. The trust and confidence of many industries in the purchase of American chip products have been shaken. American chips are no longer reliable and safe. In order to ensure the safety and stability of the industrial chain and supply chain, domestic enterprises are recommended to purchase American chips cautiously.

In the eyes of the outside world, this will strengthen the market's attention to the localization of semiconductors.

Upgrading export controls on semiconductors to China

On December 2nd local time, the Bureau of Industry and Security (BIS) of the US Department of Commerce released the latest semiconductor export control measures to China and added 136 Chinese entities to the list of export control entities.

It is worth noting that this list is stricter in terms of the depth and breadth of coverage of the domestic industrial chain compared to previous rounds, and the focus has shifted to restricting device companies and imposing restrictions on HBM (high bandwidth memory) and software tools.

Guo Zuorong, Senior Research Vice President of Jibang Consulting, recently stated at a storage industry trend seminar that the relevant measures taken by the United States will further divide the global semiconductor market. In the future, everyone will become independent and build their own semiconductor factories. Governments in each region will also attract some companies to build local semiconductor factories. We believe that this situation is irreversible, and the future situation may be that the global market will no longer exist

Many securities firms believe that the inclusion of material and some component companies in the entity list will force the semiconductor industry to accelerate localization.

Among them, CITIC Securities believes that the market restrictions this time have been anticipated. Due to the preparation of relevant enterprises, they have already carried out long-term stockpiling and switching to the US supply chain in advance. The institution believes that the short-term actual impact is limited and does not have a significant impact on the continuity of enterprise business. In the long run, self-reliance and self-improvement are expected to further accelerate the localization process of the entire industry chain.

China Merchants Electronics stated in its research report that with the upgrading of regulatory measures in this round of new regulations, the localization of advanced manufacturing, packaging and other fields is expected to accelerate further. It is recommended to pay attention to the localization process of advanced manufacturing, HBM and advanced packaging, upstream equipment, components, materials, domestic computing power and other fields.