20230908-招银国际-Solid_auto_CIS_growth_offset_by_weak_mobile_CIS_demand_10页_571kb

CIS Market Update: September 2023

Market Overview

CIS market revenue was US$21.3bn in 2022, stagnated with a 0.2% YoY decline, led by weakness in mobile and security sectors. Analyst maintains HOLD rating for Willsemi (603501 CH) due to ongoing inventory de-stocking and weak demand.

Key Trends

• Mobile CIS: Sales remained flat at US$13.5bn in 2022 due to smartphone shipment drop (-11.7%) but higher average selling price (ASP). Expected to decline ~5% YoY in 2023, remaining an overhang for Willsemi due to reliance on Android clients.
• Auto CIS: Grew 13.7% YoY to US$2.2bn in 2022, with double-digit growth expected as ADAS and electrified vehicle transitions drive demand. Market share consolidating to leaders like On Semi.
• Security CIS: Declined ~42.8% YoY, affected by macroeconomic pressures and halted government procurement; expected further slides in 2023 unless procurement resumes.

Company-Specific Analysis

• Willsemi: 1H23 revenue and net profit saw significant YoY declines (20% and -93%), highlighting ongoing inventory digestion and margin contraction. Rating remains HOLD into end of 2023.

Outlook

Overall CIS market expected to remain flat in 2023, with potential growth resumption in 2024 post-inventory clearance. Willsemi likely continues margin pressures from mobile CIS weakness until market conditions improve.