How to seize the new energy wave with Taiwan's IGBT concept stocks? Analysis of industry chain investment opportunities

What Role Does IGBT Play?

In the wave of upgrading the new energy industry, IGBT (Insulated Gate Bipolar Transistor) is becoming a key factor determining the overall industry performance. This power semiconductor chip is hailed as the “CPU of power electronics,” second only to batteries in importance, and is the second-largest expense in electric vehicle cost structures.

The core function of IGBT is energy conversion—through a “non-conducting or conducting” switching mechanism, capable of performing tens of thousands of switches per second, converting DC to AC power. This enables electric vehicles equipped with such chips to accelerate to 100 km/h within 3 seconds. In fields like rail transit, smart grids, new energy equipment, and consumer electronics, IGBT has become an indispensable core component.

Global Industry Landscape: Oligopoly Control and Taiwan Opportunities

From a global perspective, the IGBT market is highly concentrated. Infineon, Mitsubishi Electric, Onsemi, Fuji Electric, and ABB hold over 70% of the global market share. The high technical barriers give companies mastering core processes a bargaining advantage.

However, with the surge in demand for new energy vehicles and photovoltaic wind power, these international giants may outsource more advanced technology foundry services, creating opportunities for Taiwanese power semiconductor manufacturers to share the market. According to data from Donghai Securities, the global IGBT market size grew from $3.2 billion in 2012 to $7.09 billion in 2021, with a compound annual growth rate of 6.6%. Looking ahead to 2027, the market is expected to expand to $9.3 billion.

Taiwan IGBT Concept Stocks: The Latest on Three Major Companies

MOCON( 2342): A Player in Automotive Chips

MOCON has been actively expanding into the automotive power component market in recent years. In 2022, revenue increased by 10.22% year-over-year to NT$2.151 billion, reaching an 11-year high. Supported by annual reports, the stock price surged in mid-March 2023, reaching a peak of NT$47.96 per share, with a monthly increase of nearly 30%. However, subsequent corrections were significant, and by mid-year, the gains had been exhausted. It then traded in the NT$38-42 range, falling to around NT$33 at year-end, showing a weak overall trend.

Qiangmao( 2481): Adjustment in Volatility

Qiangmao mainly engages in manufacturing and sales of power semiconductors and precision electronic components. In the first half of the year, due to weak consumer demand and potential order reductions, it faced pressure. After July, the stock rebounded sharply, rising from NT$65 to a high of NT$81.7 within two weeks, an increase of over 25%. However, after August, the industry cooled down, and the stock fell below NT$60, with signs of recovery only appearing at the end of 2023.

Fuding( 8261): From Consumer Electronics to New Energy

Fuding provides comprehensive electronic solutions for consumer electronics, calculators, displays, and other fields. In the first half of 2023, its stock price hovered around NT$100. After July, it entered a downward cycle, declining to around NT$80, with continued sluggishness for four months before rebounding at year-end.

U.S. Stock IGBT-Related Targets: Global Chip Giants

Besides Taiwan stocks, several U.S. stocks are also related:

AMD performed remarkably in 2023, with its stock doubling from around $60 at the start of the year to $140 at year-end. The market still considers its valuation to have room for upward adjustment.

Intel(INTC) shows signs of recovery after years of downturn, with its stock rising from about $30 to nearly $50, an increase of over 70%. The trend was stable throughout the year with no drastic fluctuations, making it a relatively valued choice.

Broadcom(AVGO) rose from less than $600 to over $1,000, an increase of nearly 70%. Its stock gradually increased throughout the year with moderate volatility, suitable for long-term holdings.

Why Are Taiwan IGBT Concept Stocks Worth Watching?

Industry Growth Potential

Electric vehicles and industrial control are the main application fields for IGBT, accounting for 28% and 37% of demand respectively, followed by new energy generation and home appliance inverter markets. As countries worldwide support electric vehicles and green energy policies, this industry is growing fastest, with demand continuously increasing.

Technological Barriers Create Competitive Advantages

IGBT is a high-end component with high technical barriers. Companies that master core technology are scarce, giving related manufacturers a strong market position and bargaining power.

Policy Incentives Drive Demand

Under the stimulation of various countries’ electric vehicle policies, related applications are growing rapidly, significantly boosting IGBT demand and providing long-term support.

Risks to Consider When Investing in IGBT Concept Stocks

1. Technology Dependence Risk: Advanced IGBT processes are mainly controlled by Europe, America, Japan, and South Korea. If supply chain division weakens or geopolitical tensions escalate, Taiwanese manufacturers may face technological bottlenecks or material shortages.

2. Generational Substitution Risk: Emerging semiconductor technologies like silicon carbide and gallium nitride are maturing. If Taiwan’s industry fails to adopt these technologies in time, the current IGBT market position could be eroded.

Multiple Ways to Invest in Taiwan IGBT Concept Stocks

Direct Purchase: Taiwan IGBT concept stocks are listed on the Taiwan Stock Exchange and can be traded with a local account.

Derivative Instruments: Investors can use CFDs (Contracts for Difference) to go long or short, with leverage, offering greater flexibility.

Index Funds: Conservative investors may choose ETFs that include related concept stocks, such as those tracking Taiwan’s electronics or semiconductor indices.

Summary

The global new energy industry continues to grow rapidly, with demand for power semiconductors in electric vehicles and photovoltaic wind power increasing steadily. Although Taiwan IGBT concept stocks have experienced recent gains, some valuations are reasonable, and corrections may present good entry points. In the long term, the fundamental industry demand remains unchanged, allowing investors to position themselves during market fluctuations.