Semiconductor Investment and Financing Hotspot | Can semiconductor equipment and high-end chips become new opportunities in 2023 due to their popularity?

Editor's note: Against the backdrop of global economic recession and changes in trade situation, 2022 has been a year of ups and downs for China's semiconductor industry. After decades of rapid development, China's semiconductor industry has become an indispensable part of the Chinese economy. What changes and opportunities will semiconductor industry investment and financing face in 2023? This article follows the perspective of the Science and Technology Innovation Board Daily to take a look at the latest developments in semiconductor investment and financing.
From the wave of chip shortage to the tension in the industrial chain caused by capacity shortage, to capacity saturation, chip price decline, and order reduction, the focus of investment and financing in the semiconductor primary market has shifted to large markets, large tracks, and projects with predictable commercial landing. The semiconductor equipment/materials, CPU/GPU, automotive chips and other fields have received multiple projects with a financing scale of 1 billion yuan. However, the previously highly sought after chip design process has unexpectedly "cooled down", and the scene of large projects piling up is no longer the case.
Industry insiders expect that as inventory gradually dissipates in the first half of 2023, there may not be room for development in some niche areas until after the second half of the year. Meanwhile, the low-end chips that dominated the consumer market in previous years are unlikely to return to their former financing boom in 2023, with more opportunities in high-end chips, semiconductor equipment and components, materials, and more.
Semiconductor equipment/materials industry is highly sought after
Some listed semiconductor companies have idle newly purchased batches of equipment; The downstream consumer market demand is sluggish, and sales of products such as smartphones, computers, televisions, and home appliances continue to decline significantly; The new energy vehicle market has not been as hot as expected. The overall decline in demand for consumption and automobiles has led to a significant drop in the shipment volume of upstream chip design companies, with most companies shipping less than 50% of their chip shipments in 2022.
From the initial tension in the industry chain caused by the "chip shortage wave" and capacity shortage to the cold wave of capacity saturation, chip price decline, market value evaporation, and order reduction, Zhou Di, as an industry practitioner, bluntly stated that "the semiconductor industry has experienced a more thrilling year than Hollywood movies.
The above market trends quickly transmitted to investment decisions in the primary market during the same period. Turning points and differentiation have also become keywords for investors or analysts who closely monitor the development of the semiconductor industry, and their overall perception of last year's market. The hotspot and style of semiconductor investment in 2022 have undergone significant changes compared to the past.
According to data from Cailian News Venture Capital, in the domestic primary market investment and financing dynamics of the semiconductor industry in 2022, projects with financing amounts of around 1 billion yuan or even higher are mainly concentrated in the fields of semiconductor materials, semiconductor equipment, CPU, and GPU, which have received high attention and discussion enthusiasm from the market. Taking startups such as Xinxin Semiconductor, Lihao Semiconductor, Bi Ren Technology, Dongfang Jingyuan, and Xinchi Technology as examples, they easily obtained financing of 1 billion yuan in the B-round and even A-round stages.
However, the highly sought after chip design process in the past was unexpectedly "cold", and the scene of large projects piling up no longer exists.
Zhang Jinwei, Executive Director of Tianying Capital, told a reporter from Science and Technology Innovation Board Daily that the very popular chip design in the past has reached 2022