On October 18th, the semiconductor sector once again experienced a surge. As of the journalist's deadline, the Wind Semiconductor Index had risen by 11.51%, leading the A-share market.

In terms of individual stocks, semiconductor companies across the board turned red, triggering a wave of price limits. Hualing Shares and Kaihua Materials saw increases of over 20%, while Jihua Technology, Fulude, Kaiwei Technology, Jingfeng Mingyuan, Cambricon, Jinghua Micro, SMIC, Fudan Microelectronics, and Jiejie Microelectronics all hit the "20CM" price limit, while Hengshuo Shares, HuiTong Technology, RuiXin Micro, North HuaChuang, JinHaiTong, Shanghai BeiLing, and Juxin Technology hit the "10CM" price limit.

In terms of news, TSMC's third-quarter report significantly exceeded market expectations, boosting confidence in the semiconductor industry. Analysts pointed out that after TSMC's quarterly performance exceeded expectations, it raised its revenue growth target for 2024, alleviating market concerns about the sustainability of global chip demand and the prosperity of artificial intelligence hardware. This reassured investors that demand for chips remains strong.

Looking at the third-quarter reports disclosed by A-share semiconductor companies, the performance of related companies is also recovering moderately.

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According to the journalist's statistics, among the 14 companies that have disclosed, Juxin Technology, TaiLing Micro, JingChen Shares, and 10 other companies have expected increases in performance, while QuanZhi Technology and SiTiWei have both turned losses into profits. However, XinLian Integration and XinYuan Shares continue to suffer losses.

Among them, a total of 7 semiconductor companies have seen their net profits increase by more than 100%, achieving double-digit growth. Among them, QuanZhi Technology leads with a net profit increase of 781.09% to 858.93%. JingHe Integration achieved a net profit of about 270 million to 300 million yuan in the first three quarters, a year-on-year increase of 744.01% to 837.79%. WeiEr Shares ranks third with an increase of 515.35% to 569.64%, achieving a net profit of about 2.257 billion to 2.467 billion yuan.

The recovery in performance is related to the recovery in downstream demand. QuanZhi Technology mentioned that the company seized the opportunity of the recovery in downstream market demand, actively expanded its product line business, and increased shipments, which led to a year-on-year increase in operating income of about 50%. The increase in operating income drove the growth of net profit. WeiEr Shares also stated that with the continuous recovery of market demand, the company's product penetration in the high-end smartphone market and the continuous penetration of autonomous driving applications in the automotive market have achieved significant growth in operating income and gross margin.

It is worth noting that AI demand has become an important driving force for the growth of the semiconductor industry.

TSMC stated that AI-related demand and smartphone-related demand drove the third-quarter revenue. In response to a question about whether there is an AI bubble, TSMC's management said at the performance exchange meeting that AI demand is real, and the current demand growth is "just beginning." "According to one of our customers, the current demand is crazy." TSMC's management also expects that the company's revenue from AI server processors will triple this year.

Many A-share listed companies have mentioned AI demand. XinYuan Shares stated in investor research that in the field of data processing, in response to the growing demand for massive computing power to support AIGC applications, the company has AI GPU IP, high-performance GPU IP, and GPGPU IP for high-performance computing, meeting customers' extensive artificial intelligence computing needs.CoreLink Integration has also recently stated in investor research that the company is continuously expanding its business areas and fully deploying in the high-growth field of AI high-speed servers. It provides complete power management chip and module contract manufacturing services for AI server power supplies, AI cluster communications, and other AI systems. It provides technical support and large-scale, high-quality delivery assurance for product companies to create domestic AI server power supply contract manufacturing solutions.

Jiang Gaozhen, Chief Analyst of the Electronic Industry at Zheshang Securities, said in an interview with a reporter from the 21st Century Economic Report on October 16, "The current rise in the semiconductor index hides two meanings. First, the market's judgment on the inflection point of semiconductor prosperity from the second half of this year to next year varies in different sub-industries. Second, the semiconductor index includes representative technology companies, which is consistent with the industrial direction of developing new quality productive forces advocated by the country."