According to the plan, China aims to achieve a semiconductor self-sufficiency rate of 70% by 2025. However, one ban after another reminds us that if we lag behind, we will be beaten. In less than two years, the United States has strangled Chinas high-tech enterprises represented by Huawei and pressed Chinas semiconductor industry step by step, which has made China firmly determined to overcome the difficulties of advanced semiconductor industry in any case. In the foreseeable long-term complex international situation, even if we have the largest semiconductor consumption and application market in the world, we should more soberly examine our own development and shortcomings.
The development and trend of IC industry in Chinese mainland
Decline in growth rate:
According to the latest statistics of WSTS, the global semiconductor market will reach US $412.3 billion in 2019, and the proportion of Chinas semiconductor market in the world will rise to 34.97%, which is already the largest and most active semiconductor market in the world. Taiwan Institute of international policy development pointed out that 2018~2019 was affected by the Sino US trade war and the growth of mobile phone and PC demand slowed down, which affected the global semiconductor market. Chinese mainland was the main driving force for the growth of the global semiconductor market, but the growth of the global market environment was slowed down. In 2019, Chinas IC industry output value was 760 billion 900 million yuan, an annual growth rate of 16.1%, compared with 20.9% in 2018, and this year it is expected to further decline to 14.1%.
The proportion of IC design industry has made a breakthrough:
The chip design industry has become one of the most dynamic fields in the domestic semiconductor industry. In recent years, driven by factors such as improving self-sufficiency rate, policy support, specification upgrading and innovative application, Chinas chip design industry has maintained a trend of rapid growth. According to the data, the sales revenue of chip design industry increased from RMB 13.25 billion in 2015 to RMB 294.77 billion in 2019. It is estimated that the market size of Chinas chip design industry will exceed 350 billion yuan in 2020.
In the past, the proportion of IC sealing and testing industry in mainland China was the highest, reaching 48% of the highest point in 2012. Since 2016, the proportion of IC design industry (37.9% in that year) surpassed that of sealing and testing industry for the first time (36.1%), and exceeded 40% in 2019, accounting for 40.5%.
Development of top 10 IC design companies in mainland China in 2019
According to the data of icinsights, the top ten IC design companies in mainland China in 2019 are Hisilicon, Ziguang group, howay technology, bitcontinental, ZTE microelectronics, Huada integrated circuit, NARI smartchip, ISSI, Zhaoyi innovation and Datang semiconductor. Among them, only Hisilicon (22%), howay (18%) and Beijing Zhaoyi innovation (39%) achieved growth, with double-digit growth. The rest of the companies had different degrees of decline compared with 2018.
As the third largest CIS supplier in the world, howays CIS product revenue accounts for more than 90% of its business. Thanks to the rising price of CIS shortage since the second half of last year, howays revenue in 2019 has also been greatly increased.
The business layout of Zhaoyi innovation includes three parts: memory chip (norflash, nandflash), MCU and sensor. The proportion of revenue in 2019 is 80%, 14% and 6% (sensor and others).
In 2019, Zhaoyi acquired 100% equity of siliwei, a leading supplier of capacitive touch chip and fingerprint identification chip in the mainland market, actively promoted the integration with siliwei, actively optimized lens type optical fingerprint products in terms of optical fingerprint sensor, and launched optical fingerprint products under LCD screen, ultra-small encapsulation lens optical fingerprint products, ultra-thin optical fingerprint products and large area TFT light Learn fingerprint products.
On the one hand, thanks to the increase of market demand, the company continues to expand new customers and new markets, introduce new products, optimize and adjust the product structure. In 2019, the sales of memory chips will increase by about 717 million yuan, and the revenue of MCU in 2019 will increase by about 39.2 million yuan compared with that in 2018. In addition, it completed the acquisition of siliwei, which contributed 203 million yuan in revenue.
In the IC Design of advanced technology, Hisilicon and Ziguang zhanrui are in the forefront of the industry.
Hisilicon released its high-end application processor Kirin 9905g in 2019. At that time, it was the first 5g baseband SOC successfully integrated in the world, which was carried on Huaweis mate 30 series. Kirin 990 is manufactured by TSMCs 7 nm EUV process. This year, Hisilicon released its second 5g chip, Kirin 820, using TSMCs 7-nm process, mainly targeting the high-end mobile phone market.
Ziguang zhanrui, the second largest IC design company in mainland China, also released the latest second-generation 5g chip Huben t7520 in February this year. It is expected to mass produce by the end of 2020. For the 5g middle end mobile phone market, TSMC 6 nm EUV process is adopted.
60% of IC manufacturing comes from foreign-funded wafer plants, and the storage industry is facing crisis and opportunity
As one of the most valuable integrated circuit products, memory chip industry is a national strategic industry, which is directly related to the development of electronic information industry. In order to reduce the dependence on imports, the state has been investing heavily in the layout of domestic memory chips in recent years.
Changjiang storage successfully produced 64 layer 3dnandflash in 2019. In April 2020, it announced that it had successfully developed 128 layer 3dnandflash, but it still lags behind Samsung, Meguiar and other manufacturers. At present, it mainly produces 92 / 96 layers of 3dnandflash and increases 112 / 128 layers of 3dnandflash. At present, the enterprises cooperating with Changjiang storage include guokewei, jiangbolong, Weigang, qunlian, Lianyun technology, Huirong and other high-quality partners to jointly promote the application of Changjiang storage 64 layer TLC products.
Changxin storage also officially produced DDR4 chip in September 2019, and has been adopted by 56 brand manufacturers including Weigang, Qicaihong and Guangwei.
Although facing many tests, domestic memory chips have achieved an important breakthrough from 0 to 1. However, this is only the beginning. Capacity improvement is a long-term process, and profitability is a distant goal. There is still a long way to go to occupy a place in the storage market. The first thing to do is to develop a competitive local memory chip industry, and first of all, to meet the domestic demand for memory chips.
IC packaging test results are remarkable, but the gap of advanced packaging is still large
In 2019, affected by the Sino US trade war, the depression of the semiconductor industry and other environmental factors, the revenue of Changdian and Huatian decreased by 4.3% and 19.6% respectively compared with that in 2019, and only Tongfu micro power achieved a growth of 9.8%. However, with the transfer effect brought by domestic substitution, domestic manufacturers will benefit substantially. Since last year, the three major packaging and testing manufacturers in mainland China have been actively expanding advanced packaging capacity, and capital expenditure has entered the upward period, which indicates that the mainland sealing and testing manufacturers are optimistic about the future growth and the signs of industry recovery are clear.
With the development of foundry and IDM manufacturers such as TSMC, Intel and Samsung, as well as the incremental layout of OSAT enterprises and the continuous growth of market demand, the competition for advanced packaging will become more and more fierce. Whether the local packaging manufacturers can win in this competition is very important for the mainland packaging industry and even the whole semiconductor industry.
Policies and funds boost the flames and vigorously support the domestic semiconductor industry
The second phase of big fund has started to invest in recent years. The first project is mainly invested by the second phase of big fund together with Shanghai Guosheng group to inject 4.5 billion yuan into Ziguang zhanrui. In July, SMIC international science and Technology Innovation Board issued a strategic placement of 24.261 billion yuan, and the second phase of national large fund was allocated more than 3.5 billion yuan, making it the largest investor.
According to the International Institute of Obstetrics, Taiwan Institute of technology, with the development of IC design and packaging, the next step is to move towards IC manufacturing, including wafer foundry and memory chips.
Secondly, in addition to Hisilicon, Ziguang zhanrui and other local IC design leaders, mobile phone brands also want to go abroad to develop their own chips and master the key technologies in their own hands. However, the key technologies and funds are huge challenges. Entering the 5g era, the technical threshold is higher and talents are scarce.
Finally, in spite of the increasingly severe crackdown from the United States, the government is still firmly increasing its efforts to support the industry and improve the chip self-sufficiency rate. Although the target process has slowed down, we should firmly believe that these setbacks will not in any way reduce our determination to develop semiconductor autonomy.