Winners and losers of global semiconductor companies since the era of the new crown epidemic

The new crown epidemic has completely changed the original way of life and economic development mode of human beings. If 2020, when the global pandemic of the new crown epidemic began, is regarded as the first year of the new crown epidemic, then there have been too many results in the past two years beyond our previous understanding.

The development of science and technology once made us think that in the struggle against nature, human beings have taken the initiative, but in the past two years, the global efforts have not yet achieved the advantage of fighting against the new crown virus. The rapid mutation of the virus exceeds the speed of human development of vaccines. Israel Israeli Prime Minister Bennett said that this was a “professional decision” made by the Israeli Ministry of Health after consulting experts, and the fourth dose of the vaccine will be for Israel. People provide “a new layer of protection”, but no one knows whether this is really effective or psychological. As the country with the highest proportion of three-dose vaccines (about 45%) in the world, the epidemic in Israel has rebounded sharply. In this policy announcement On the same day, January 2, 2022, there were 4,197 new confirmed cases of the new crown in Israel, with a total of about 1.39 million confirmed cases and a total of 8,244 deaths. At least until the first half of 2022, in addition to strictly controlling the areas where the epidemic has occurred, mankind has not found other more effective solutions.

The beneficiaries and losers of the epidemic

In the early days of the global outbreak of the new crown epidemic, the markets of various countries were pessimistic about the future, and the stock market and commodities fell sharply, and even triggered circuit breakers in a row, setting a historical record. However, the demand for remote office and distance education accompanied by the epidemic has sounded the first wave of “epidemic benefit” stocks, and the prices of epidemic prevention materials related to the epidemic have also skyrocketed. In the past two years, due to the raging epidemic, governments around the world have chosen extremely loose monetary policies to ensure growth, especially the United States. The government is printing money frantically, but the economy has not yet returned to normal order, and consumption, tourism and real estate have generally remained low, so the new economy represented by information technology (including semiconductors) and new energy has become the main force to absorb super-printed funds. For example, Apple’s market value on December 31, 2021 increased by $1,609 billion compared to its market value on January 1, 2020, a growth rate of 123%; compared with the same period, Microsoft’s market value also increased by more than one trillion US dollars, reaching $1,322 billion. The growth rate is 110%; among the top 100 listed companies in terms of market value growth according to the Financial Times, Tesla won the championship with a growth rate. Compared with January 1, 2020, Tesla’s market value at the close of 2021 has risen. 988 billion US dollars, the proportion is as high as 1311%, and the amazing rise ratio has sent Musk to the position of the richest man; China’s Ningde era has also entered the top ten, and its market value has increased by 182 billion US dollars in two years.

Interestingly, the two leading companies in the CATL era are the luxury goods company Moët Hennessy-Louis Vuitton (LVMH) and Kweichow Moutai, both of which are closely related to the wealthy in China. In the original words of the Financial Times: Investors were originally worried that LVMH would be hit by the new crown epidemic, because the company relies heavily on the wealthy Chinese who go to Paris and Milan to shop. Despite the epidemic, the purchasing power of the rich in China and the rich in the United States is still strong. Coupled with an improved online sales system, analysts expect the luxury goods company’s 2021 sales to rise by 15 percent from 2019 to about 61 billion euros.

There are winners, and naturally there are losers. Alibaba has lost 247 billion US dollars in market value in the past two years. In terms of market value loss, Alibaba is the world’s largest unlucky person; followed by American Telephone and Telegraph (AT&T), the market value loss in two years is as high as 110 billion US dollars. These two have become brothers and sisters who have lost more than 100 billion US dollars in market value. From an industry perspective, traditional energy, finance and real estate have been the hardest hit areas in the past two years. Companies with the most losses in market value are listed. There are also many medical and health companies that are unable to step up the pace. Intel, the former semiconductor leader, has a market value of two years. With a loss of $51 billion, it also entered the top ten of the loss list. When other competitors are making great progress, Intel appears to be particularly lonely on this list.

The Financial Times also listed the short-lived and bottomed-out lists since the era of the epidemic. In the short-lived list, Chinese companies once again won the top spot. Evergrande New Energy was once sought after by the market because of its main gold support. Its market value has increased by 78 billion US dollars compared with the beginning of 2020 at its peak. Without selling a single car, its market value exceeded Ford. The current market value is about $4 billion, down 94% from its highs. Market speculation has put Evergrande New Energy on a roller coaster ride, and it has also caused the stock prices of video teleconferencing company Zoom Video and home fitness equipment company Peloton to fluctuate sharply. The first wave of hype was wildly hyped, in which the peak market value of Zoom increased by $143 billion from the beginning of 2020. After the normalization of the epidemic, the market found that its stock price had exceeded market expectations, and Zoom and Peloton began to fall sharply.

Among the top ten companies that have bottomed out, traditional energy companies such as oil occupy six seats. On the one hand, this is a repair mechanism for overreaction to the market. Commodity prices began to rise.

In general, when the epidemic hit the first wave, due to the huge psychological fluctuations in the market, most corporate stocks deviate from their normal valuations, especially the stocks that benefited from the epidemic and those that were damaged by the epidemic. After the normalization of the epidemic, as the psychology of the participants gradually stabilized, the market repaired the overreacted stock price, and subject to the pressure of maintaining growth under the epidemic, major economies continued to “release water”, and most of the new liquidity poured in. Market logic has long been optimistic about technology companies and new energy fields, resulting in as many as five companies with a market value of over one trillion US dollars in the market. Apple and Microsoft are more than 2 trillion, just one step away from 3 trillion, while Tesla is worth more than all the other auto companies in the world combined. Once the epidemic becomes clear and monetary policy begins to tighten, how the valuation of high-level technology companies changes will have a great impact on the market trend.

Semiconductor companies shine

In the past two years, the market capitalization of most semiconductor companies has shined. Four semiconductor companies in the top 15 by market capitalization are Nvidia, TSMC, ASML, and Broadcom. In fact, among the top five companies in terms of market value growth ahead of Nvidia, each has its own chip business. Among them, Apple’s chip business can be ranked among the top fifteen semiconductor companies in the world, especially among design companies. Ranked sixth, but the chip business of these companies accounts for a very low proportion of their revenue, so they are not regarded as semiconductor companies.

Among the top 100 companies with market capitalization growth, a total of 12 semiconductor companies are on the list (including Samsung Electronics). Among them, the semiconductor equipment industry performed particularly well, with ASML, Applied Materials and Lam Research, the top three equipment manufacturers all making the list. This performance and market information can confirm each other: In the past two years, the global chip production capacity has been greatly expanded, and leading companies such as TSMC and Samsung have spared no expense in the investment of advanced technology. The three-year investment plan of these two companies in semiconductors has soared to billions of dollars. Among the three major equipment companies, ASML, which is holding the throat of advanced technology, has the advantage of exclusively supplying EUV lithography machines, and its market value has increased by 203 billion US dollars to 327 billion US dollars. Enterprise-level equipment companies, the most outstanding performance.

Among the 12 semiconductor companies with the best market capitalization growth, including the top three equipment companies mentioned above, as well as NVIDIA, Qualcomm, Broadcom and AMD among the five chip design companies, as well as the global design companies ranked seventh or eighth Marvell, a total of five chip design companies, not counting Apple’s chip design department or Xilinx, which has been acquired by AMD, the best chip design companies in the United States are already on the list.

In addition, there are TSMC, the world’s largest and most advanced chip manufacturing company, Samsung Electronics, the world’s largest semiconductor company, and analog chip duo TI and ADI, which can be said to be quite representative.

The historic tight supply in 2021 is undoubtedly the main driver of the rise in the market value of semiconductor companies. Qualcomm benefited from Huawei being sanctioned, AMD relied on its competitors to set off its disappointment, and TSMC, TI and ADI really benefited from this round of market shortages. Of course, ADI’s merger with Maxim Integrated also contributed to the growth of market value.

Nvidia’s growth should be seen as an outlier. Although there is still a considerable gap between Samsung and Intel in terms of revenue, in terms of market performance and leading the trend, NVIDIA is undoubtedly the first brother in the current semiconductor industry, whether it is artificial intelligence, cloud computing, digital currency, high-end games. , or the “metaverse” concept that will be red to purple in 2021. NVIDIA is the main force or the biggest promoter. When the market rises and needs a concept, NVIDIA can always provide a suitable concept in time.

Lonely Intel

The past few years have undoubtedly been Intel’s most disappointing years. The progress of advanced technology is not smooth, and we have to revise the way of publicity to fight against competitors. The introduction of 7nm process has made mistakes again and again, and there has been no new technology on the market for a long time, so we have to fight with TSMC; the new investment direction has repeatedly misjudged, or it is like Mobileye It has been stripped away in the same way, or has not been heard from after being acquired by Intel. Except for traditional PCs and servers, other directions advocated by Intel have been difficult to get as high as NVIDIA. It is difficult to make a breakthrough in the short term, but it is more inclined to political speculation, and does not hesitate to stand in line with the “Xinjiang-related” bill in exchange for the targeted support of the US government.

From a purely revenue point of view, Intel is undoubtedly undervalued. Intel’s revenue in 2021 will still be about $75.5 billion, which is $7.5 billion less than Samsung’s $83 billion semiconductor business, but still tens of billions more than other manufacturers. Counting TSMC, there are only three semiconductor companies with a revenue of $50 billion, but Intel’s market value at the end of 2021 is only $209 billion, Nvidia’s market value ($735 billion at the end of 2021) is 3.5 times that, and TSMC’s market value (575 billion by the end of 2021) US dollar) is 2.75 times its market value, Broadcom’s market value is also higher than Intel’s, Qualcomm and Intel are comparable, and even the market value of old rival AMD and Intel’s market value gap is less than 20 billion US dollars.

Nvidia’s revenue is less than one-third of Intel’s, and AMD’s is only one-fifth more. Although AMD’s momentum is strong, it is still far from shaking Intel’s dominant position in actual market share.

The logic of secondary market speculation is to look at the future. Although it ranks second this year, no one has any doubts about Intel’s current strength. The reason why the market does not pay for Intel is that it is not optimistic about its future. Even though some powerful players have emerged in the industry to challenge Intel’s traditional territory, Intel is not in a hurry, and others are not so easy to catch up. Originally, I also had certain expectations for Intel’s re-emergence, but from the recent political speculation. From the point of view of the show operation, Intel executives have no confidence in relying on market means to defeat their opponents, so it is natural for the outside world to look down on it.

Frankly speaking, Intel is using its own power to maintain the final dignity of the vertical integration model (IDM), but the advanced technology is extended to the Ami level, and the drawbacks of the IDM model are getting bigger and bigger. Because manufacturing and design are shoulder-to-shoulder, it is impossible to share the high cost. In particular, Intel now only has two big markets, PC and server. The collapse of the mobile terminal business has resulted in no other large-scale applications to maintain the high-end chip shipments required for advanced process iterations. This is not due to Intel A trend that can be reversed.

The general trend in the development of information technology is always who will give profits to partners and customers first, and who will gain market advantages first. The reason why Moore’s Law has been continuously verified proves that buying better performance at the same price is the biggest driving force in this industry. This is the benefit of the entire semiconductor industry to the information technology industry and to the entire society. When Intel abandons Moore’s Law and focuses on political speculation or digging holes for competitors, it is no longer an industry leader.

write at the end

The new crown epidemic is raging in Europe and the United States again, and the number of confirmed cases in the United States and major European countries in a single day has set a new record. As stated in the “Nine Judgments on the Semiconductor Industry”, although the out-of-control epidemic in the United States and Europe may cause chip output to be affected again, it will also suppress consumer demand due to the raging epidemic, so forecasting and analysis is extremely difficult.

From a global perspective, 2021 will undoubtedly be a year of great harvest. Although the valuation of semiconductor stocks in the European and American markets is not as exaggerated as the Chinese market, it is still at a high valuation. If supply and demand reverse, this wave of excess capacity will be eliminated. Fluctuations may be extremely violent. The beginning of 2021 is the high valuation of global semiconductor companies in the past two or three years, or it is the beginning of the golden seven years as some analysts say, and the market needs to verify it by itself.

I took a few glances at the NFL yesterday. Even though the epidemic reported by the US media was fierce, and experts frequently reminded not to gather, the American people are still very happy to watch the games together without wearing masks. On the contrary, even if the next two or three years of the virus war are the most difficult, which is equivalent to 1941-1942 during World War II, you still have to have confidence to meet the final victory, right? Nothing is more important than faith, come, play and dance.