中国半导体供应链

IC production/import unit growth lasting into 1Q26According to China Statistics Bureau,China domestic IC manufacturing volume reached a record high of 47.5bn units in March, +31% YoY, clearly higher than +21% YoY inJanuary-February or just low-single-digit percent YoY growth in 1H25. IC import volume(including logic, memory, analog, etc.) was 54.6bn units in March, +14% YoY (1Q26volume:+11% YoY, steady growth in 2H24/2025). March IC export volume also grew 13%YoY to 32.5bnm units (1Q26: +11%). Overall, in our view, 1Q26 semiconductor supply inChina (domestic manufacturing + imports–exports) should increase by about 20% YoY. EquityChinaSemiconductors Dai Shen>>Research AnalystMerrill Lynch (Hong Kong)+852 3508 7310dai.shen@bofa.com Simon Woo, CFA>>Research AnalystMerrill Lynch (Seoul)simon.woo@bofa.com Fabless inventory: No meaningful reduction in 4Q25 Based on the companies’2025 results (as of 20 April), we note that Chinasemiconductor fabless companies’inventory turnover period (DoI) in 4Q25 came in at150-200 days, still higher than the historical normal level (100-150 days). Among thesub-segments, MCU companies’average DoI continued to decrease–already near 200days in 4Q25 vs the 2023 peak of over 400 days, while non-MCU logic companies’DoIincreased from 148 days in 3Q25 to 177 days in 4Q. Other segments (i.e., memory,analog, power discrete, etc.) broadly maintained inventory levels at a stable level QoQ. Matt Shin>>Research AnalystMerrill Lynch (Seoul)matt.shin2@bofa.com ASP: Average selling price Asian mature foundries cautiously optimistic on pricingIn recent earning calls,China/Taiwan/Korea mature node foundry companies have BCD: Bipolar (analog), CMOS (digital),DMOS (power) integrated chip expressed a cautiously optimistic outlook on the 1Q26/2026 foundry price trend. Somechip categories (such as BCD, memory, etc.) are witnessing solid demand, leading to arise in foundry price. Foundry companies have seen improved or already full capacityutilization, and they are looking to enhance pricing/profitability through product-mixoptimization (Exhibit 10). However, we still believe the mature node foundry priceincrease in the China market will be limited in 2026–e.g., we expect only a 5-10% ASPincrease for Hua Hong Semi this year, due to persistent inventory pressure among localchip design/fabless companies. CXMT: Changxin Memory DoI: Days of inventory DRAM: Dynamic random-accessmemory chip IC: Integrated circuit Semis equipment March imports at US$3bn litho: lithography China’s semiconductor equipment imports in March were US$2.8bn (-3% YoY) vsUS$2.5bn/US$1.2bn (-19%/-24% YoY) in January/February. 1Q26 imports dropped 14%YoY from US$7.6bn in 1Q25 to US$6.5bn. We note that semis equipment imports toAnhui province regained momentum–March 2026 imports were US$226mn vs onlyUS$110mn/ month in 2H25. Lithography tools accounted for 57% of Anhui’s Marchimports. March import data suggests a new round of equipment procurement byChangxin Memory (CXMT), the key DRAM fab operator in Anhui province. MCU: Microcontroller chip semis: semiconductors Key charts Average inventory turnover period was 216 days in 4Q25, vs 242 days in 3Q DoI 107 days in 4Q, in line with the historical average of around 110 days Average DoI 157days in4Q25vs the previous average of c.100 days Exhibit10:Mature technologyfoundry companies’comments on pricing trendthrough their 4Q25 earningsMature tech foundries becoming more optimistic on pricing in 2026 but have not confirmed an immediate upcycle Exhibit12:Global foundry companies–Utilization ratioFoundries’ UTR recovered clearly; Taiwan mature node foundries reverted back to 70-80%; SMIC and Hua Hong’s UTR reached above 95% or even100%+ Mature node foundries’ gross margin broadly at 10-30% by 4Q25; nomeaningful recovery observed in 2024/25 vs the 2022 peak China semis equipment imports dropped 3% YoY in March; overall growthmomentum muted in 4Q25/1Q26 China semis equipment imports were US$2.8bn in March 2026, close to2H23/2025 average level of about US$3bn/month Valuation Exhibit20:A-shareBEequipment stocks’ average P/E (fwd-12m)Back-end (BE) equipment stocks trade at 70x P/E on average vs historical Exhibit19:A-share FE equipment stocks’ average P/E (fwd-12m)Front-end (FE) equipment stocks trade at 42x P/E on average vs historical mean at 54x mean at 79x Foundry suppliers’ valuation about 2.6-3x P/B Exhibit23:A-sharememorystocks’ average P/E (fwd-12m)Memory supply chain stocks’ average P/E at about 70x vs historical mean at Exhibit24:A-sharelogic semisstocks’ average P/E (fwd-12m)Logic chip stocks’ average P/E now 75x vs historical mean at 87x 62x DisclosuresImportant Disclosures BofA Global Research personnel (including the analyst(s) responsible for this report) receive compensation based upon, among other factors, the overall profitability of Bank of AmericaCorporation, including profits derived from investment banking. The analyst(s) responsible for th