CITIC Securities: The global semiconductor equipment boom cycle continues to be confirmed, focus on price increases and going global.

CICC research report stated that SEMI revised upward its full-year expectations, SK Hynix's production capacity will triple by 2034, and the global semiconductor boom cycle has been firmly established. SEMI released a report on June 11, raising its growth forecast for the global front-end semiconductor equipment market in 2026 from the previous 16.5% to 23.5%, reaching $152.2 billion. Global semiconductor equipment shipments in Q1 reached $36.55 billion, up 14% year-on-year, setting a new record for a single quarter. Following the announcement of SK Hynix's plan to double its production capacity in five years earlier this month, SK Group Chairman Choi Tae-won recently disclosed in an interview that if all plans proceed as expected, SK Hynix's production capacity will be three times that of the current level by 2034. The components sector is the most resilient direction in this wave of market activity. The global semiconductor equipment components are currently experiencing a rare and significant price hike throughout the entire supply chain. Pricing power in the semiconductor industry chain is shifting structurally from chip terminals to equipment and components sectors. Component companies have smaller scales and higher fixed costs, so price hikes directly profits. At the same time, the production expansion cycle for component lines is as long as 12-18 months, with the lowest supply elasticity. The demand for domestic alternatives and price hike logic arising from extended delivery times from overseas suppliers of crucial components such as valves, ceramic parts, RF power sources, and GAS BOX, is gaining significance.