Shanghai Securities: Mainland China remains the world's largest semiconductor equipment market, Micro LED welcomes a new growth opportunity

According to the Zhitong Finance APP, Shanghai Securities released a research report stating that the SEMI report shows that the global semiconductor equipment shipment value reached USD 33.07 billion in Q2 2025, a year-on-year increase of 24%. The sales in mainland China reached USD 11.36 billion, a year-on-year decline of 2%, but a quarter-on-quarter increase of 11%, maintaining approximately 34.4% market share as the world's largest semiconductor equipment market. The launch of key products will gradually drive the market value of Micro LED chips, which is expected to reach USD 461 million by 2029. Micro LED is gradually achieving commercialization in various fields, from televisions and smartwatches to automotive displays, with each key product launch symbolizing a technological breakthrough. The firm believes that the electronic semiconductor industry may be on the verge of a comprehensive recovery by 2025, with the competitive landscape expected to accelerate clearing and recovery, and the industry profit cycle and related company profits likely to continue to recover. The electronic industry maintains an "overweight" rating. Key Points from Shanghai Securities: Global semiconductor equipment shipment value in Q2 2025 increased by 24% year-on-year, with mainland China maintaining its position as the top market. On September 8, according to institutions citing the International Semiconductor Association (SEMI) in its latest "Global Semiconductor Equipment Market Report," the global semiconductor equipment shipment value reached USD 33.07 billion in Q2 2025, a year-on-year increase of 24%. Driven by advanced logic processes, HBM-related DRAM applications, and increased shipments in Asia, sales in Q2 2025 increased by 3% quarter-on-quarter. In terms of specific regional semiconductor equipment sales in Q2 2025, mainland China's sales reached USD 11.36 billion, a year-on-year decline of 2%, but a quarter-on-quarter increase of 11%, maintaining approximately 34.4% market share as the world's largest semiconductor equipment market. Ajit Manocha, President and CEO of SEMI, stated: "The global semiconductor equipment market is expected to reach a record USD 117 billion in sales in 2024, with a strong performance in the first half of 2025, generating over USD 65 billion in revenue. Chip manufacturers continue to invest in capacity to support advanced logic and memory innovations driving the AI wave, as well as key projects to strengthen regional supply chain resilience." Benefiting from the launch of key products, the Micro LED market value is expected to rise rapidly. On September 9, according to TrendForce, the penetration rate of Micro LED in consumer electronics is accelerating. Following Samsung's launch of a 140-inch Micro LED TV in 2023, Garmin's Fenix 8 Pro smartwatch will also introduce related technology in 2025, along with the expected launch of the Sony Honda Afeela 30-inch automotive display by the end of the year, marking the beginning of Micro LED's coverage in major fields. TrendForce stated that the launch of these key products will gradually drive the market value of Micro LED chips, which is expected to reach USD 461 million by 2029. Micro LED is gradually achieving commercialization in various fields, from televisions and smartwatches to automotive displays, with each key product launch symbolizing a technological breakthrough. With advantages in high brightness and high contrast, Micro LED has already been adopted by some new smart glasses brands, and in the future, as international manufacturers join and Micro LED light source suppliers promote it, this technology will gradually emerge in near-eye display devices This helps to enhance the overall output value of the industry. TrendForce also pointed out that the market's acceptance of the current high power consumption and high price of Micro LED is still a major challenge, making it difficult to compete with more mature and cost-effective OLED technology in the short term. However, Micro LED can meet the extreme brightness requirements of smartwatches in outdoor environments and has the potential for highly integrated sensing components, paving the way for future product innovation and differentiation. Investment Recommendations Maintain an "Overweight" rating for the electronics industry. The firm believes that the electronic semiconductor sector may be on the verge of a comprehensive recovery by 2025, with the industry competitive landscape expected to accelerate clearing and recovery, and the industry profit cycle and related company profits likely to continue to recover. Currently, it is recommended to focus on: certain oversold stocks in the semiconductor design field with real performance and low PE/PEG, AIOT SoC chips such as Zhongke Lanyun (688332.SH) and Juchip Technology (688049.SH); for analog chips, focus on Meixinsheng (688458.SH) and Nanxin Technology (688484.SH); for driver chips, focus on Fengcai Technology (688279.SH) and Xinxiangwei (688593.SH); for key semiconductor materials, focus on domestic substitution logic, and recommend leading electronic materials platform companies such as Tongcheng New Materials (603650.SH), DING LONG (300054.SZ), and Anji Technology (688019.SH); for the silicon carbide industry chain, focus on Tianyue Advanced (688234.SH, 02631). Risk Warning Escalation of Sino-U.S. trade frictions, terminal demand not meeting expectations, and domestic substitution not meeting expectations