Rockchip(SH:603893) Xin Lang Cai Jing·2025-08-14 00:59Core Insights - The Chinese semiconductor industry is experiencing a unique form of "non-typical involution," characterized by structural imbalances rather than traditional overcapacity, with a shortage of high-quality production capacity amidst excessive competition from low-level, homogeneous capacities [1][3] Industry Expansion and Capacity - According to SEMI, China's chip manufacturing capacity is expected to grow by 15% in 2024, reaching 8.85 million wafers per month, driven by the launch of 18 new semiconductor fabs [2] - TrendForce forecasts that domestic foundries will become the main contributors to mature process capacity growth by 2025, with a projected 6% increase in the capacity of the top ten global mature process foundries [2] Capacity Utilization and Quality Concerns - Despite rapid capacity expansion, effective supply growth has not kept pace, leading to competition excess primarily in low-level segments, while high-quality production remains critically insufficient [3] - Major players like SMIC and Hua Hong Semiconductor report high capacity utilization rates, indicating that qualified production lines are operating at full capacity [3] Market Dynamics and Price Pressures - The market for SiC substrates has seen a slowdown in growth due to weakened demand from the automotive and industrial sectors, resulting in a 9% year-over-year revenue decline for the global N-type SiC substrate industry in 2024 [4] - Companies like Tiantong Co. have paused projects in response to the competitive pressures in the SiC market [4] Strategic Responses to Competition - Companies are shifting from price wars to "differentiated innovation and ecological collaboration" as a strategy to overcome low-level competition [4] - Example of Rockchip shows a focus on core technological capabilities and innovation in audio, video, and perception fields, aiming to build a differentiated platform for new production capabilities [5] High-End Market Focus - Rockchip emphasizes high-end markets such as smart vehicles and humanoid robots, aiming to meet stringent requirements for safety and reliability while lowering innovation barriers for the industry [6] - The company's approach has resulted in maintaining a high net profit margin, even reaching a historical peak in Q1 of this year [6] Structural Optimization and Industry Collaboration - To address the non-typical involution, a structural optimization across the industry is necessary, focusing on distinguishing between market competition and low-end involution [7] - The proposed "dislocated competition" strategy suggests that state-supported entities should tackle high-tech challenges, while local governments can focus on regional market opportunities, allowing market-driven companies to compete in mature process markets [7][8]