Global chip supply is tight
The global production and manufacture of chips is mainly concentrated in Southeast Asia. With the deepening of the new round of technological revolution, the application of semiconductor chips is becoming more and more extensive. The spread of the new crown epidemic has led to a sharp increase in the demand for terminal application products in the home and remote work mode, but since 2018, the global trade friction has continued to escalate, coupled with multiple force majeure factors such as enterprise shutdowns caused by the new crown epidemic, which have frustrated the supply side of semiconductor chips, and the increase in demand and supply reduction resonate, resulting in a tight supply of chips in downstream applications. External market risk is systemic risk and has a lasting impact on all enterprises in the industry.
Domestic upstream raw material enterprises are not mature
With the gradual transfer of touch industry production capacity from Japan, South Korea, and Taiwan to the mainland, the localization process of upstream raw materials is also accelerating. The electronics industry is mostly customized products, and the touch display industry is no exception, and there is a certain stickiness between the demand side of downstream products and the supply side of upstream raw materials. Due to the industry's upstream high added value, high technical content of raw material products have been monopolized by foreign countries for a long time, China's upstream raw materials enterprises developed late, in terms of technology accumulation, product competitiveness, brand awareness and other aspects and foreign enterprises there is still a certain gap, key raw materials still rely on imports a large part, which to a certain extent will be China's touch industry rapid development constraints.