Semiconductor's new breakthrough in China's new entry point

Relevant data show that the growth of the global semiconductor market from 2010 to 2012 showed a continuous downward trend, from 31.8% in 2010 to 0.4% in 2011 and -2.7% in 2012, with a compound annual growth rate of -2. %. However, the global mobile Internet chip market has grown significantly during this period. In 2012, the global communications chip market reached US$90 billion, accounting for 30.6% of the US$291.6 billion in the global semiconductor market over the same period.

It is estimated that the global communications chip market will exceed 100 billion U.S. dollars in 2013 and will reach 114.4 billion U.S. dollars in 2014, thus surpassing the total output value of computer chips. This means that the driving force of the global semiconductor industry has shifted from PC to mobile Internet. This trend of change will be particularly strong in the next seven years. The global semiconductor industry is facing a major transformation.

Global IC giants actively respond to mobile changes

In recent years, Intel has been trying its best to seek the right to speak in the mobile Internet era. Through a series of layouts on mobile devices, Intel’s growth rate has become apparent.

Among the global IC giants, Intel is the global processor leader, and Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) in Taiwan is the global leader in foundry. They have always been ahead of the global semiconductor industry in their respective fields. Here is the development strategy of the two giants during the major transformation of the global semiconductor industry, observe the coping strategies of the global IC giants.

Since the nature of Intel's x86 architecture is aimed at computers, and the ARM architecture is aimed at wireless mobile terminals, Intel's transition to the mobile Internet from 2005 has been very difficult. However, in recent years, Intel has been striving for the right to speak in the mobile Internet era. 2012 can be regarded as the first year of Intel's mobile Internet, and its AMD Atom chip with its "Medfiled" series was launched into the smartphone and tablet market. A total of 7 mobile phones were launched. On January 7, 2013, Intel introduced its first Atom processor chip for smartphones and tablet PCs with 4-core 3D transistors and 22nm manufacturing process at CES2013. Although ARM-based mobile phones currently account for 95% of the market, rarely see Intel x86-based chips, but its growth rate is obvious through a series of layouts on mobile devices. In addition, Intel also has outstanding performance in chip foundry. As in early 2013, Intel and Altera signed a 14-nm Finfet FPGA foundry contract, which clearly took away important TSMC customers.

TSMC has for a long time been a non-manufactured processor chip and has been lagging behind Intel in advanced process technology. At present, in order to meet Intel's potential competition in the chip foundry market, and at the same time to meet the urgent needs of advanced technology based on ARM-based Qualcomm, Broadcom and other major customers, they are determined to overtake Intel from a high starting point.

At present, the market value of TSMC is NTD 2.8 trillion, ranking the second largest market value semiconductor factory in the world. In terms of capital expenditures, TSMC’s investment in 2013 was US$11 billion, which was higher than Intel’s investment of US$9.5 billion to US$10 billion. In terms of technology, Intel will implement 22nm (Finfet) and 14nm (Finfet) technologies from 2013 to 2014. Production; and TSMC plans to achieve conversion from 20nm (Finfet) technology to 16nm (Finfet) technology mass production from 2014 to 2015. In particular, on the 10nm process technology node, TSMC has announced its goal of mass production at 10nm in 2017 when Intel has not released a production timescale of 10nm, fully demonstrating its determination to pursue Intel in full.

China's mainland integrated circuit industry has three major challenges

With regard to the accumulation of resources including talents, technology, intellectual property, and markets, China lacks effective systems and mechanisms to support enterprises in achieving sustainable development.

From now to 2020, it is an important strategic opportunity period for the development of China's integrated circuit industry. Especially during the major transition period of the global semiconductor industry, the “12th Five-Year Plan” is an important stage for the “Innovation Drive, Transformation and Development” of China's IC industry. It should be noted that whether it is the current rise of the smart phone, tablet computer market, or the rise of the smart home, mobile health care, smart cities, new energy automotive electronics and other fields. At this stage, there is a big gap between China's IC industry and foreign countries. There are three major problems:

First, the status of the enterprise as a major carrier for achieving technological advancement and promoting leap-forward development of the industry has not been formed. Among them, in the global IC design industry, in 2012, the United States ranked first in Qualcomm’s sales of US$129.76 billion, and in China’s Taiwan region, MediaTek’s number was US$3.395 billion, while China’s No. 1 Hess semiconductor was RMB7.450 billion. Yuan (about 1.192 billion U.S. dollars) is only 9.2% for Qualcomm and 35.1% for MediaTek. In addition, in terms of the aggregate energy levels of the top five IC design companies in the aforementioned countries and regions, the United States accounted for 41.16% of the global Fabless industry, while Taiwan, China accounted for 11.26%, while China accounted for only 3.9%.

In the global chip-generation industry, in 2012 both SMIC and Hua Hong-Hongli (merger) under Hua Hong Group entered the top ten. Their sales were US$ 1.702 billion and 6.04 respectively. Billion US dollars, but in the same period in the first Taiwan Semiconductor Manufacturing Co., Ltd., 10.06 times and 26.36 times, a difference of the second GlobalFoundries 2.47 times and 6.95 times, a difference of the third UMC2.12 times and 5.96 times. In addition, in terms of mass production process nodes, SMIC's current 40nm technology lags behind 28nm/22nm world advanced technology levels in two generations.

Second, the situation of China's dependence on imported chips has not improved. According to relevant data, in 2012, the total IC market in mainland China reached as high as 855.85 billion yuan (about 136.28 billion US dollars), which accounted for 46.7% of the semiconductor market with a global total of 291.56 billion US dollars in the same period, and it has become the world's largest integrated circuit application market; however, During the same period, the entire IC industry in mainland China, including IC design, chip manufacturing, and packaging and testing, was only 215.84 billion yuan, accounting for only 25.2% of market demand. In other words, about 75% of the IC market in mainland China has been occupied by foreign IC suppliers, especially in high-end microchips (CPU, GPU, MCU, DSP, etc.), mass storage, automotive electronics, and SoC standard for communication chips. The application-specific integrated circuits (ASSP) and analog circuits (high-reliability ADCs/DACs, high-power devices, and sensors) are basically imported.

Third, the effective mechanisms and development models for scientific and sustainable development such as “combination of production, study, and application”, “chip-to-machine linkage”, and “interaction between chip design and chip manufacturing” for IC development and industrialization have not yet formed. At present, in the field of information technology, although China has emerged as an industry chain alliance such as TD-SCDMA and AVS, it has played an important role in promoting the rapid development of IC design companies such as Hass and Spreadtrum; however, the IC and Leading IT companies co-sponsored and based on the development needs of cross-industry, cross-sector new markets, new technology standards, new core technologies (chips and their process technologies, software and their operating systems, terminals and their applications), and long-term agreement frameworks The two major industrial and technological cooperation alliances established under the IT and IC with clearly defined reference points of competition are almost absent in China; thus, in China's existing numerous IT and IC industry chain alliances, there are the following defects: First, in the industry In the three links of the ecological system, R&D support system, and industrial space layout, there is a lack of overall positioning targets, planning, and deployment that lead China’s IC and IT technologies with Chinese market characteristics and clear international reference points. Second, it includes talents and technologies. There is a lack of effective systems and mechanisms for sustainable development in the accumulation of resources such as intellectual property, markets, and markets; and third, government policies. Holders, the lack of a supportive policy framework and solid measures include government funding, tax breaks, etc.,.

Digital analog hybrid circuit should be the entry point

The positioning of China's IC industry should be based on digital analog hybrid circuit technology, new market solution platform tool technology and industrialization.

Up to now, China's integrated circuit industry has been unclear in its orientation and has not escaped the extensive follow-up development model. As a result, the overall layout including technological innovations and intellectual property rights accumulation, including major national projects, is not clear. At the same time, IT and IC industries are two major industries. The correlation between supply and demand is small, and there is no strategy and strategy for constructing an innovative development value chain system with Chinese characteristics IC and IT products.

In order to make China's IT and IC industries no longer become the followers of the global new generation of information technology development, we believe that before 2020, the positioning of China's integrated circuit industry should be based on digital analog hybrid circuits (SoC or SiP) technology, The complete solution platform for the application of new market technology and its industrialization as the basic positioning, as the fundamental entry point for industrial leapfrogging development.

First of all, based on the current China's integrated circuit industry foundation, by 2020 China's integrated circuit technology should fully reach the 16nm-10nm process level, even close to the silicon limit of 7nm the world's top advanced level of technology and to achieve such as Intel, TSMC, Qualcomm, etc. Advanced design and semiconductor process technology levels and their economies of scale, even with the support of national will industrial policies, forming a strong financial and other industrial environment, tracking and development in the next seven years is unrealistic and difficult to achieve.

Secondly, in view of the characteristics of the industrial development stage, although China is lagging behind the world's advanced level in the digital logic integrated circuit process technology, China has entered the world advanced level in the digital simulation mixed process technology; not to mention the next seven years, High-voltage CMOS technology for automotive electronics and smart grids, control and drive IC technologies such as new display and semiconductor lighting, MEMS technology and storage control technologies for medical electronics, and application processor technologies such as multimedia will combine TSV-based 3D/2.5 D semiconductor technology will still use 180-55nm, 16-bit/32-bit CPU/MCU-IP and other applicable technologies.

Finally, China's IT industry, including communications, multimedia, information appliances and new displays, has formed a complete industrial chain that covers all aspects of chip and terminal, network construction and operation, among which Huawei's sales revenue reached 220.2 billion in 2012. Yuan (a growth of 8%) and net profit of 15.4 billion yuan (an increase of 33%) jumped to the top spot for the first time in the world and is expected to maintain a growth rate of more than 10% in 2013. Huawei has become an important force in leading the development of the global communications industry, and is gaining more and more right to speak in the international communications market.

Based on this, if in the areas of communication, multimedia, information appliances, new display, and automotive electronics and even rising smart homes, mobile health care, smart cities and other fields, rely more on the country's 01, 02 and 03 major special projects and governments at all levels The key projects established will bring together the expertise of “producing, researching and using” experts in the two major industries in China to jointly plan, formulate and deploy roadmaps with Chinese characteristics and the world’s most advanced digital analog mixed process technology and SoC or SiP product development roadmap. Creating a new "killer" digital analog hybrid circuit will also have a place in the world's integrated circuit industry.

Explore upstream and downstream virtual IDM patterns

The establishment of an upstream and downstream virtual IDM model is conducive to promoting the construction of China's IT and IC industry supply and demand value chain, and improving the ability to control the environment.

Today, global business competition has evolved from technology competition, product competition, enterprise competition, industrial chain competition development to business model competition. Its fundamental feature is that, from a strategic perspective, it can grasp new market opportunities, create a first-mover advantage in market competition, or build defensive barriers including independent intellectual property rights.

We believe that during the “Twelfth Five-Year Plan” period, the strategies and strategies for the technology development and industrialization business model of China's integrated circuit industry should be based on the requirements of the Ministry of Industry and Information Technology, set national will, fully and solidly explore and achieve upstream and downstream The virtual IDM model forms a good industrial ecological environment.

First of all, it is conducive to promoting the construction of China's IT and IC industry supply and demand value chain and improving the ability to control the environment. Through the exploration and implementation of the virtual IDM model, China will promote the establishment of a system and mechanism for “linkage between chip and machine” and “chip design and manufacturing linkage” in China, including the construction of two industrial value chain innovation systems, and make IT and IC leaders. And backbone enterprises have achieved unprecedented competitiveness, accelerated China's independent and controllable IC design and chip manufacturing capabilities, as well as the upgrading of support and support capabilities for important information systems and major informatization applications. Finally, in the product model, business model and operation model, a brand-new and win-win business model with mutual integration, benign interaction and coordinated development will be formed.

Secondly, it is conducive to creating a public policy and a legislative system that adapts to the interactive development of the two major industries that implement the virtual IDM model. It should be noted that in the exploration and implementation of the virtual IDM model and the formation and development of the two major industrial eco-environments, it will inevitably encounter bottlenecks such as mechanisms and systems, which will greatly exceed the existing national standards including State Council Document No. 4 Policy and regulatory limitations.

Finally, it is conducive to the formulation, improvement, and implementation of major national strategic plans for the IT and IC industries, as well as national advanced technology plans. In the planning and planning of scientific and technological R&D investment in major national projects, through the use of virtual IDM alliance entities as the core carrier, it will be more conducive to the formation of alliances between central and local governments, national research institutions and private research institutions, universities and enterprises. The development of institutions and mechanisms is more conducive to the construction of a national innovation system for the IT and IC industries. It is more conducive to the transfer of results to industries, the formation of commercialization and industrialization, and the enlargement and strengthening of the two industries.