Core Viewpoint - Nintendo's stock experienced a significant decline due to concerns over rising component prices, particularly memory chips, which may erode profit margins for the upcoming Switch 2 console [1] Group 1: Stock Performance - On December 10, Nintendo's stock fell by 4.7%, reaching its lowest level since May of this year [1] - The stock has seen a downward trend, with seven out of eight trading days in December resulting in losses, leading to a market capitalization loss of approximately $14 billion [1] Group 2: Component Cost Increases - The price of the 12GB RAM modules used in the Switch 2 increased by 41% in the current quarter, according to market research firm TrendForce [1] - Additionally, the price of NAND storage, which is also utilized in the new console, rose by nearly 8%, impacting the cost of supplementary storage cards [1] Group 3: Market Sentiment - The escalating memory supply crisis has dampened investor optimism regarding the Switch 2, contributing to the stock's decline [1]

Investment Rating - The report maintains an investment rating of "Outperform the Market - A" for the electronics industry [6]. Core Insights - The semiconductor product origin recognition rules have been clarified, accelerating the domestic substitution process for chips, which may benefit local manufacturers of analog and RF chips due to increased tariffs on U.S. imports [1]. - The electronics sector experienced a decline of 3.89% in the past week, ranking 13th out of 31 industries, with the semiconductor sub-sector showing a slight increase of 0.56% [3][37]. - The report highlights significant investment opportunities in various segments, including supply chains related to Apple, NVIDIA, and semiconductor ICs, as well as silicon carbide [4]. Summary by Sections Industry Performance - The electronics sector's performance in the past week saw the Shanghai Composite Index drop by 3.10%, the Shenzhen Component Index by 5.13%, and the CSI 300 Index by 2.87% [3][37]. - The electronics index's price-to-earnings (PE) ratio stands at 52.6, with a 10-year PE percentile of 67.61% [42]. Investment Recommendations - Key companies to watch include Luxshare Precision, GoerTek, and Lianyi Intelligent Manufacturing in the Apple supply chain; NVIDIA-related companies such as Shenghong Technology and Industrial Fulian; semiconductor IC firms like Haiguang Information and Longxin Zhongke; and silicon carbide companies like Tianyue Advanced and Sanan Optoelectronics [4]. Market Data Tracking - The semiconductor industry is seeing increased investment in advanced packaging and third-generation semiconductors, with significant projects being signed in China [16]. - The 8-inch silicon carbide substrate has entered large-scale application, promising higher yields and lower manufacturing costs [24].