Bosera Fund's Liu Zhao: Self-Controlled and Emerging Demand Resonance, Integrated Circuit Industry Upturn

The Shanghai Securities Journal reported (by Hu Yao, reporter Liu Yifeng) that recently, the first event of the third season of “China’s Science and Technology Innovation - New Quality Productive Forces Research Tour,” co-hosted by Shanghai Securities Journal and Bosera Asset Management, took place at Huicheng Co., Ltd., a constituent stock of the Sci-Tech Innovation Index. Liu Zhao, a fund manager in the Index and Quantitative Investment Department of Bosera Asset Management, stated during the exchange event that against the backdrop of continuous advancement in self-control and the accelerated release of emerging demands, China’s integrated circuit industry is ushering in a new development window and is in a critical upward cycle of high-quality development.

Liu Zhao believes that the core driving force behind the development of China’s integrated circuit industry currently mainly comes from the coordinated efforts of policies and markets. On one hand, the policy side has formed a comprehensive support system for the integrated circuit industry. The government continues to increase investment in special support funds and industrial guidance funds, setting clear goals for improving the self-sufficiency rate of core chips, and the collaborative innovation mechanism of industry, academia, and research is continuously improving, providing a solid foundation for breakthroughs in key technologies. On the other hand, market demand is continuously expanding, with emerging fields such as artificial intelligence, the Internet of Things, new energy vehicles, and industrial internet accelerating development, bringing vast and stable domestic demand space to support industry scale expansion and technological iteration.

At the application level, the integration of integrated circuits and the Internet of Things is deepening. “With technological advancements, integrated circuits, as the core hardware foundation of the Internet of Things, are continuously expanding their applications in scenarios such as industrial interconnection, smart hardware, smart homes, and vehicle networking. China’s vast end-user market and comprehensive consumer electronics manufacturing system provide a good foundation for the application of chips. At the same time, the demand for low-power, high-performance, and highly integrated chips in related scenarios is continuously increasing, driving the industry to evolve towards higher performance and better cost structures, further broadening application boundaries and activating emerging demands,” Liu Zhao admitted.

In terms of specific investment directions, Liu Zhao focuses on the following three main lines: First, the acceleration of AI applications landing. With the promotion of “lobster” (a reference to a specific AI application), AI is transitioning from “chat interaction” to “productivity tools,” driving the release of demand on the application side and in upstream and downstream sectors. Coupled with breakthroughs in lightweight models, edge devices such as AI headphones and AI glasses are accelerating to market, and related software and hardware companies are expected to benefit; Second, relying on the Chiplet technology path to balance performance and cost, domestic semiconductor manufacturing and design companies are continuously improving product performance, the software ecosystem is constantly being perfected, and with policy support focusing on intelligent computing clusters and computing power coordination, the domestic computing power industrial chain is expected to usher in a comprehensive prosperity improvement; Third, as self-control continues to advance, the penetration rates of key links such as semiconductor equipment and materials are increasing, resonating with the industry cycle recovery and AI demand, and related fields have room for performance and valuation recovery.