Methodology - The core of the electronic sector research is to "embrace change and capture the ends of the industrial chain (wafer manufacturing & terminal products)" [3] - The research divides into two main lines: "domestic production" (equipment, materials, IC manufacturing) and "market-oriented" (consumer electronics, automotive, communication) [3] - The focus is on "core focus + dual-line parallel + differentiated strategies" [3] - The ends of the industrial chain are the most valuable segments: wafer manufacturing is the core manufacturing link in the semiconductor industry, with the highest technical barriers and capital investment [3] - The dual-line parallel approach reflects the unique attributes of China's electronic semiconductor industry, where domestic production corresponds to policy-driven and import substitution logic, while market-oriented corresponds to demand-driven and global competition logic [3] - Differentiated strategies are necessary to avoid a "one-size-fits-all" approach, as different sectors have distinct driving logic [3] iPhone Case Study - The article uses iPhone sales and market share data to illustrate its four development stages: innovation and breakthrough, diversification and expansion, transformation and challenge, revival and leap [6] - It emphasizes that "technology changes life and production, and the essence of growth is the growth of demand" [6] - Four supports for demand growth are identified: consumer group expansion, increased payment willingness, desire for new features, and expanded usage scenarios [6] - Investment insights from the product lifecycle are discussed, highlighting different investment logic at each stage [6][8] - The "iPhone moment" is deemed replicable, suggesting that any electronic semiconductor sector's explosion requires a flagship product or technology to activate potential demand [6][7] Valuation Issues - The DDM model serves as a theoretical foundation, while relative valuation is the practical basis, emphasizing the logic of "capital expenditure → revenue → profit" corresponding to "PB → PS → PE" [18] - High valuation premiums stem from "growth certainty," where market expectations for long-term growth drive high valuations [19] - The article outlines the appropriate valuation indicators for different stages: PB during capital expenditure, PS during revenue growth, and PE during profit stability [18]

Core Insights - The integrated circuit industry is experiencing a significant recovery in gross margins, with leading domestic packaging companies showing improved performance in Q2 2025 compared to Q1 2025 [1][2] Group 1: Gross Margin Analysis - In Q2 2025, Yongxi Electronics (gross margin of 16.87%) and Tongfu Microelectronics (gross margin of 16.12%) outperformed the average gross margin of leading packaging companies (14.92%) [1][2] - Q1 2025 marked a relative low point for the gross margins of leading packaging companies, while Q2 2025 saw a recovery to levels near Q4 2024 [1][2] - Wei Ce Technology has maintained a significantly higher gross margin than its peers over the past six quarters, with a turning point reached in Q1 2024 [2] Group 2: Company Performance Highlights - ASE Technology is expected to achieve $1 billion in revenue from advanced packaging and testing services in 2025, with a mid-single-digit growth forecast for general business [3] - Anke's revenue in the computing sector grew by 18% in H1 2025, continuing its growth momentum from a record year in 2024 [3] - Tongfu Microelectronics reported a revenue of 13.038 billion yuan in H1 2025, a year-on-year increase of 17.67%, with a net profit of 412 million yuan, up 27.72% [3] - Yongxi Electronics achieved a revenue of 2.010 billion yuan in H1 2025, reflecting a year-on-year growth of 23.37%, and a net profit increase of 150.45% [3] Group 3: Capital Expenditure and Market Trends - Jingyuan Electronics reported a significant increase in capital expenditure, reaching 2.662 billion yuan in Q2 2025, a 149.64% increase quarter-on-quarter and a 474.34% increase year-on-year [4] - Wei Ce Technology has optimized its business structure and improved profit quality due to increased demand for advanced packaging testing and a strategic focus on high-end testing capacity [4] Group 4: Equipment and Technology Trends - The demand for TCB and SoC testing machines is growing strongly, driven by advancements in AI and high-performance computing [5] - ASMPT's TCB equipment orders increased by 50% year-on-year, with global installations surpassing 500 units [5] - Teradyne's semiconductor testing equipment, particularly for AI-related SoC chips, exceeded expectations with revenues of 2.832 billion yuan in Q2 2025 [5] Group 5: Investment Recommendations - The report suggests focusing on companies in the packaging sector such as ASE Technology, Tongfu Microelectronics, and Yongxi Electronics, as well as testing companies like Jingyuan Electronics and Wei Ce Technology [6]