In the first half year, it is not optimistic for the macroeconomic which causes the consumption power of electronic products was weaker than expected. In the first quarter, the computer and television had a low demand, the mobile phone market is relatively optimistic, but did not exceed the expected performance. It is off-season trade In the second quarter, the estimated demand of consumer electronic products is low.This year, orders and shipment volume of semiconductor equipment this year increase slowly, we expect orders and shipment volume growth of semiconductor equipment in the second half in the North American and Japanese will continue to fall. As capacity utilization is good, we believe that the release of the current industry capacity is in a reasonable situation.
Low demand will continue to make the industry be in a period of adjustment.
Currently, the global macroeconomic still faces a little uncertainty,market research agencies also tend to lower demand for electronic products.End demand is not satisfactory to make the industry boom is still in an adjustment period. Recent Taiwan foundry TSMC and UMC admits mobile phone market is far from the expected, and IDM is now in the inventory adjustment phase after the earthquake in Japan, the part of the orders will be  moved to the fourth quarter, making the market in thrird quarter had no expected effects.We believe that the domestic electronics industry is in a mixed situation.
1:the policy is still good to develop of electronic components. In the first half of this year, China has promulgated a number of policy to support emerging industries (including the information technology industry) development.
2:Profit growth of electronic components in the first quarter was low which is far from expectations ,because the current industry boom is not clear, it is obvious that the growth of the whole industry is low.
3:Inflation is expected to fall in the second half, industry profits are expected to be improved, but we expect wage increases will continue, and because wage increases are often irreversible, impact on the profitability of the business is difficult to overcome.
Overall, we believe that the the boom of electronic components industry in the second half is not clear enough, and the valuation is still high, so the overall investment opportunities are not obvious and maintain the industry "neutral" investment rating.