Microchip is one of the world's leading supplier of microcontroller and analog semiconductors, semiconductor components used in the production of household appliances, computer network hardware to the automotive and other products, so the company is regarded as a measure of income industry needs a reference index. China as smart phones and other electronic products, the largest producer important, it is also the largest semiconductor manufacturers such as microchip market. But we through analysis, that is not much of Microchip Technology representation in the overall semiconductor industry. First, its main products microcontroller (MCU) was not actually representative of the electronics upstream products, currently used primarily in washing machines, air conditioners, microwave ovens, vacuum cleaners, refrigerators and other appliances as well as engineering and control, but we all know the most representative of the current demand for semiconductors consumer electronics. Moreover, according to company information, 70% of its revenue comes from less than 10% of customers, fluctuations in some large customers can easily lead to fluctuations in company revenue. The sharp correction in the semiconductor sector, mainly due to the decline in revenue the previous microchip semiconductor business cycle turning point there is 60% -70% of the coincidence degree, so some people treat it as a leading indicator of the semiconductor industry. However, we believe that it is only partially reflect changes in the semiconductor boom, rather than leading indicators. From our communication with the semiconductor industry chain related personnel situation, TSMC, Samsung, STMicroelectronics and other mainstream business orders abundant prosperity and high prices. The world's largest wafer foundry to TSMC for example, in September consolidated revenue 74.846 billion yuan, hit a new high, month by 8%, the growth rate is better than market expectations; third quarter consolidated revenue of 3,898.0 billion yuan, slightly beyond the earnings forecast high standard, even three quarters of rewriting a new record high single-season. IC packaging and testing director of domestic electricity, Hua Tian and other capacity utilization is high, basically did not feel the boom of the downward trend. Semiconductor Investment core logic mainly two things: first, the industrial chain transfer to the mainland trend is irreversible. With the accumulation of mature industry chain, technology and talent, the global semiconductor industry chain from Europe to Taiwan, Japan and South Korea trend of the mainland again shift more and more clear; Second, the state will support the localization of the next great background. State and government can guide the downstream procurement requirements, promote capital investment, accelerate the process of industrial transfer to the mainland. These two core logic at least there will be no significant change in the next three to five years, while the semiconductor industry is capable of large-cap companies of the industry, we determine a large market throughout the semiconductor industry has just begun, the future will be every short-term pullback is a buying opportunity.