American companies have been banned from selling components to ZTE in the next seven years. The long-term inability of China's key electronic components to control themselves has become a pain for Chinese people. Due to its important position in national defense security and the relatively closed nature of its supply system, military chips are characterized by their relatively closed nature. Its domestic substitution and independent control are expected to usher in rapid development.

Orient Securities pointed out that military chips have greatly affected the operational effectiveness of information technology equipment, and have become the bottleneck for the development of our military's information-based combat capability, which will be given priority and rapid development. At present, the informationization construction of our army is dominated by the technological revolution, focusing on the development of information weaponry, and the core lies in the electronic and computerized equipment. As the electronic hardware foundation, military chips are regarded as the "nerve center" of information equipment, which largely determines the operational effectiveness of information weaponry. In view of the core position of information equipment, military chips will be given priority and rapid development.

Due to the late start, China's military chip self-sufficiency rate is insufficient, coupled with the foreign chip blockade, the localization of military chips is urgent. It is estimated that China's military chips have more than 20 billion domestically replaced space each year, and military research institutes and other institutions are implementing localized replacement by model, such as “reverse design + independent research and development”, in military CPUs (Godson, Feiteng, etc.). GPU (Jingjia micro-made GPU), DSP (38 soul core, 14 Huarui series) and other fields have made some breakthroughs. In the future, with the advancement of semiconductor technology and manufacturing processes, the localization of military chips will be faster.

Oriental Securities pointed out that the integration of military and civilian has risen to the national strategy. As a military-civilian dual-use technology, military chips will usher in great development. First of all, the core technology of the chip is dual-use, and the military and civilian fields can promote each other. Secondly, the development of civilian semiconductor technology is relatively fast. Some IC design companies are close to the world-class level in the field of SoC, and the civilian technology military is gradually becoming the mainstream trend. Finally, most of the civil commercial fields use forms such as architecture authorization. Because military performance requirements are slightly lower than civilian and military procurement, military components can become a breakthrough for independent control, which in turn drives the development of the entire semiconductor industry. .

Based on the current domestic situation, Orient Securities has a short-term optimistic view of the military supply system companies and sub-sectors with large segmentation and deep technical accumulation, such as aerospace chips. In the medium and long term, it is recommended to pay attention to the high-tech companies that can change the amount of FPGA chips and technology to qualitative change and realize independent control in many fields.