Lookout | Competition on the spire of the manufacturing industry

The picture shows a server equipped with multiple Hanguang 800 accelerator cards. Each accelerator card has a Hanguang 800 chip.

The controversy for the top of the chip industry is not only an industry breakthrough, but also an assault initiated by China to a manufacturing powerhouse.

There is no shortcut to the development of the chip industry. It can only rely on continuous iteration. Investment in the chip industry cannot be expected to “eat a fat man with one bite.”

Industrial funds represented by the National Fund have played an important role in promoting the development of my country’s integrated circuit industry. However, international leading companies continue to invest huge amounts of innovation to consolidate their leading positions in the industry. my country’s industrial companies cannot rely on their own accumulation to complete the task of catching up and need a lot of External capital investment support

Text | Zhang Xiaolan, Huang Weirong, Tang Min and Dong Xue, reporter of “Liaowang” News Weekly

Modern industry caused a “grain shortage”.

Recently, many auto giants have suspended production due to a lack of cores. The chip shortage starting in the fourth quarter of 2020 has intensified, and mobile phones, games and other fields are also facing a chip inventory crisis. Data company IHSMarkit said that in the first quarter of 2021, global production will be reduced by nearly 1 million light vehicles due to chip shortages.

The economic department of Taiwan has received requests from the United States, Germany, Japan, and the European Union to increase the supply of chips. The American Semiconductor Industry Association (SIA) and large chip companies such as Intel and Qualcomm have jointly sent a letter to the President, hoping that the government will support the improvement of advanced process manufacturing capabilities.

The shortage of chips has ignited an investment war in the semiconductor industry. TSMC, the world’s largest chip foundry company, launched an equipment investment plan of up to 28 billion US dollars this year. The former giant Intel announced that it will return to the chip manufacturing market, and the global chip production capacity layout is facing a reshuffle.

Since the ZTE and Huawei incidents in 2018, the pain of China’s chip “stuck neck” has been in the throat. With strong demand, can China’s chip industry usher in overtaking opportunities while making up for its shortcomings? When will the high-end manufacturing puzzle of chip freedom be completed?

Contest at the tip of the pyramid

From mobile phone touch screen chips to water and electricity metering chips, from camera image chips to various communication interface chips, from home appliance control chips to Bluetooth chips… Thousands of chips, ranging from a few cents to hundreds of thousands The US dollar has propped up the super-trillion-scale semiconductor industry.

The World Semiconductor Trade Statistics Organization report pointed out that the total global semiconductor market sales in 2020 will reach 440 billion U.S. dollars, an increase of 6.8% over 2019. The total scale is expected to reach 488 billion U.S. dollars this year, an increase of 10.9%.

Take the mobile phone industry as an example. The global smartphone shipments have reached the level of 1 billion, which has greatly stimulated the development of the chip industry from quantity to performance. Judging from the recent new energy automobile industry favored by the market, the “new four modernizations” of electrification, intelligence, networking, and sharing have created a large-scale high-end chip market.

Looking back to China, according to China’s semiconductor industry calculations, my country’s integrated circuit sales revenue in 2020 will be 884.8 billion yuan, an increase of about 20%, three times the growth rate of the global industry. From the perspective of market entities, data from the professional version of Tianyancha shows that in the past five years, the number of registrations of Chinese chip-related companies has increased year by year, with an annual growth rate of more than 30%. There are currently about 265,000 chip-related companies in my country.

China, which has the most complete and largest market scale in the global manufacturing category and has become the world’s electronic information product manufacturing center, still suffers from the pain of chip “stuck neck”.

The chip industry or the integrated circuit industry has many categories. The wide and long industry chain includes raw materials, design IP cores, chip manufacturing, equipment materials, packaging and testing, system design and other links, forming a pyramid system. Nearly 300,000 chip companies in China are catching up, mostly concentrated in the low-end market; at the head or even the spire, there are a few US and European countries such as general-purpose CPU/GPU, memory, advanced digital circuit process, high-power devices, etc. Leading Japanese and Korean companies lead and control the industrial chain. Under the current Sino-US economic and trade frictions and the intentions of countries to quickly get rid of the downturn in the economy, competition in integrated circuits is becoming increasingly “hot.”

In 2020, China’s total imports of integrated circuit products reached 350 billion U.S. dollars, reaching the highest level in history; exports amounted to 116.6 billion U.S. dollars, an increase of 14.8% year-on-year, which was slower than the 20% growth in the same period in 2019. As the world’s largest chip importer, and the trade deficit of integrated circuit products continues to expand, it is increasingly urgent to strengthen the cornerstone of the integrated circuit industry.

From the perspective of economic and social development, new applications and scenarios such as cloud computing, big data, 5G, AI, and industrial Internet are constantly emerging, and the multiplication effect of integrated circuits is significant. The data shows that the output value of 1 yuan integrated circuit will drive the output value of electronic products about 10 yuan and the national economic growth of about 100 yuan. In recent years, the supply-side structural reforms have been deepened. The demand for emerging applications has gradually replaced the demand for traditional applications. Integrated circuit products have become an important driving force for the conversion of old and new kinetic energy. Occupying the top of the tower, having the right to speak and control the industry, has become the peak that China’s integrated circuit industry must climb.

The battle for the top of the chip industry is not only an industry breakthrough, but also a passport for China to become a manufacturing power.

Turn on touch high jump

Recently, Glory CEO Zhao Ming announced that the new Glory company has completed the integration. Back in 2020, Huawei was sanctioned by the United States, and its mobile phone business subject to chip manufacturing was the first to bear the brunt. More than 30 companies in the Honor-related industry chain launched an unprecedented self-rescue operation.

From a broader perspective, the strategic sprint of China’s chip industry has been extensively advanced.

Reshape the supply chain.

The reporter learned from interviews that many chip manufacturing companies have increased the proportion of localized procurement of materials and equipment. “As of 2020, the localization of materials has exceeded 60%.” said Cai Huijia, general manager of Jinghe Integration. In 2020, Jinghe Integration has achieved its goal of leading the market share in the field of mobile phone panel driver chip foundry.

BGI, which is deeply engaged in chip design software EDA tools, is innovating the value chain in the global supply chain. The company’s deputy general manager Guo Jiwang said that the company’s business and technical capabilities are showing rapid growth. At present, it has achieved more than 20 commercialized products, accounting for more than half of the mainstream EDA tools, serving nearly 400 customers worldwide, and forming a close relationship with leading companies in the industry. Strategic partnership.

Consolidate the foundation and fill the gaps.

SMIC, which represents the most advanced level of independent research and development of integrated circuit manufacturing in mainland China, was forced to suspend the research and development and capacity construction of advanced processes of 10 nanometers and below due to the embargo. For the next step of development, Zhao Haijun, the co-CEO of SMIC, introduced that one is to actively expand the production capacity of mature process nodes of 28 nanometers and above; the other is to actively promote supply licensing to ensure that the chemical materials, gases, and accessories required for production will not be interrupted in the short term. ; The third is to respond to the diversified demand for chips in the post-smart phone era and explore a more suitable sustainable development path.

Teng Ran, head of CCID Consulting’s IC Research Center, said that mature processes represented by 28-nanometer processes will continue to be the basis for many manufacturers to maintain profits and participate in the research and development of advanced semiconductor processes in the future; SMIC is currently actively expanding 28 Nano mature process, by continuously improving product yield, enhancing product stability, consolidating the foundation, and then conquering the advanced process of 7nm and 5nm, it is a relatively benign development.

In the field of advanced processes, SMIC announced that it will strengthen the development and deployment of the first and second generation FinFET multi-platforms, and expand the reliability and competitiveness of the platforms.

On April 1, the domestic company that produces lithography machines, Xinqi Microelectronics, landed on the Science and Technology Innovation Board, and was called “the first stock of lithography machines in China”, although the lithography machine products it produced and marketed were not in integrated circuit manufacturing. Widely used mainstream category, but fills the gap in my country’s high-end chip industry chain, and the determination to become a world brand of lithography machines reflects the aspirations of Chinese chip companies.

Take another path and explore characteristic craftsmanship.

In the post-Moore era, the annual performance improvement of chips tends to be saturated, and a single advanced R&D process will become more and more difficult. The protagonist of technology that maintains “Moore’s Law” is fundamentally changing. The generational replacement of technology may shake the advantage of the leader and bring opportunities for Chinese chip companies to catch up.

A number of companies representing new forces in the global chip industry said that under the oligopoly of various chip industries, the needs of many small and medium-sized customers have not been met. Innovative, lightweight, and characteristic solutions can create new value for the market.

Start the high jump, seek and run in subdivision areas.

The domestic emphasis on the chip industry is increasing day by day. Thanks to the continuous increase in policy support, it not only maintains a leading edge in the field of communication chips, but also achieves varying degrees of development in multiple subdivisions including memory chips, decoding chips, and security chips. progress. In particular, many AI chip start-ups have entered the emerging segment to catch up with international giants. For example, Shangtang Technology and Pingtou have ignited the passion and dreams of more Chinese chip travelers.

In a few areas, domestic manufacturers have begun to enter the global mid-to-high-end application market. Such as Huawei HiSilicon’s Kirin mobile phone chip and Howe Technology’s image sensor chip.

In the manufacturing and material equipment fields that are still far behind the international advanced level, such as the semiconductor equipment of China Micro Semiconductors and North China Huachuang have realized a certain proportion of domestic substitution; 8-inch and 12-inch wafers, domestically produced proportions Is constantly improving.

Cluster breakthrough.

Recently, Shanghai Lingang New Area released a special plan for the integrated circuit industry (2021-2025). It is expected that by 2025, the scale of the integrated circuit industry will exceed 100 billion yuan, and breakthroughs will be made in the industrialization of key “card neck” technologies such as EDA tools, photoresist, and large silicon wafers, and more than 5 leading domestic and foreign chip manufacturing companies will be introduced and cultivated. 5 equipment and materials companies with annual revenue of more than 2 billion yuan, and cultivate more than 10 listed companies.

On March 24, the Northern Integrated Circuit Technology Innovation Center project in Beijing Economic Development Zone officially started construction, which will accelerate the construction of an integrated circuit industry ecosystem centered on Beijing. Beijing Economic Development Zone is one of the regions with the highest concentration of integrated circuit industry and the most advanced technology in the country. Currently, the Beijing Economic and Technological Development Zone has a monthly production capacity of 120,000 to 140,000 12-inch wafers. With the construction of multiple new projects, the Beijing Economic and Technological Development Zone will have a monthly production capacity of 500,000 12-inch wafers. The production capacity of the country has become the largest area of ​​12-inch wafer production capacity in the country. Data show that in 2020, the new generation of information technology industry in Beijing Economic Development Zone represented by the integrated circuit industry will achieve a total output value of 83.5 billion yuan.

In catching up, China’s chip industry has significantly improved its manufacturing process, packaging technology, and key equipment materials. A number of leading companies that can create new value for the global supply chain have emerged in the industrial chain of design, manufacturing, packaging and testing.

Haipu Nano Technology Co., Ltd. has realized the chip miniaturization of hyperspectral imaging, and has achieved breakthroughs in MEMS (micro electromechanical) chips and new image sensors

Construct high-end manufacturing collaborative thinking

In the next step, how do you view the development path of China’s chip industry and the development space for domestic substitution? A number of interviewees pointed out that one is capital and talents, the other is time, and the third is the coordination of the industrial chain.

With the continuous increase of national policy support, especially after the launch of the science and technology innovation board, the capital and talent situation of the chip industry has been significantly improved. At present, the domestic chip industry has attracted a large influx of funds, and the wealth effect has attracted the return of overseas talents.

However, there is no shortcut to the development of the chip industry. It can only rely on continuous iteration. It is very likely that the development cycle of a chip will not keep up with the rate of return of capital. In Teng Ran’s view, investment in the chip industry cannot be expected to “eat a fat man in one bite.”

Many industry insiders pointed out that the lack of cores once again demonstrated the importance of supply chain autonomy, but the chip manufacturing process is complex and highly dependent on the global supply chain. While building an independent industrial chain, China Chip still has to strengthen its awareness of jointly building a chip industrial chain on a global scale.

If China wants to gain control in this high-end manufacturing field, it needs to further break the barriers to the input of resource elements, mainly to increase funding and talent support for the integrated circuit industry.

One is to maintain long-term and high-intensity investment of funds. According to official U.S. listed company data, the R&D investment and capital expenditure of U.S. chip companies in 2019 totaled 71.7 billion U.S. dollars. From 1999 to 2019, the total capital investment of U.S. chip companies was nearly 900 billion U.S. dollars. However, the first and second phases of the China National Big Fund add up to about 300 billion yuan, which is an order of magnitude difference.

The industrial financial support represented by the National Large Fund (Phase I and Phase II) has played an important role in promoting the development of my country’s integrated circuit industry, but the leveraging effect of the national large fund industry is difficult to show in the short term. In the long run, larger-scale, higher-intensity, and more sustainable capital investment is still needed. At the same time, international leading companies continue to invest huge amounts of innovation to consolidate their leading positions in the industry. my country’s industrial companies cannot rely on their own accumulation to complete the task of catching up and still need a large amount of external capital investment support.

The second is to strengthen the construction of the talent training system. At present, there are about 500,000 employees in my country’s local integrated circuit industry. Compared with the total demand for talents of 745,000, the gap is relatively large. In particular, the shortage of high-end talents in the industry and the shortage of leading personnel cannot be effectively solved in the short term, and the talent training system has not yet been able to effectively meet the development needs of the “stuck neck” field.

Looking further, since the introduction of the National Integrated Circuit Industry Development Promotion Program in 2014 and the establishment of the National Integrated Circuit Industry Investment Fund (“National Fund”), my country’s integrated circuit industry has made great progress, but the industrial development system and mechanism still Many shortcomings.

One is the blurring of the power and responsibility boundaries between government, industry and academia. Some local governments ignore the laws of industrial development and scientific decision-making judgments and are racing to launch semiconductor manufacturing projects. Many domestic “100 billion” and “tens of billions” projects have been suspended and debt disputes have occurred; industrial enterprises have blindly expanded across regions in order to obtain more subsidies. The repeated development of low-level industrial production and low-level industries; research on administrative and commercial value orientation has led some scholars to “enter” innovation and entrepreneurship, and weaken the overall research power of the industry.

The second is the lack of collaborative innovation. Industry and academia have their own R&D investment, lack of overall coordination, one-sided pursuit of a single technological breakthrough, and neglect of industrial ecological construction.

Third, the development of long-term mechanisms is fragile. The evaluation system is imperfect, and the purpose and methods of technological innovation are inverted, making it difficult to form a sustainable development trend.

This is a new generation of 22nm high-precision positioning chip released by Hexinxingtong Technology (Beijing) Co., Ltd. at the annual meeting (photographed on November 24, 2020) by Tang Wenhao/this publication

Improve the nationwide system and mechanism for scientific and technological research

Many industry insiders suggested that relying on my country’s huge market advantages, firmly grasp the development windows of new infrastructure, new national system, etc., take the domestic cycle as the main body, and use product applications as the traction to promote the breakthrough development of the integrated circuit industry and ensure industrial supply The chain is safe.

Speed ​​up the repair of short plates and forging long plates to improve the technical level.

One is to improve the level of integrated circuit manufacturing as the core development direction. The level of integrated circuit manufacturing is an important indicator to measure the country’s innovation capabilities. We should continue to maintain investment perseverance, determination and enthusiasm in the industry, especially in the manufacturing process; through policy support such as fiscal and tax incentives, credit incentives, etc., guide social capital into the integrated circuit manufacturing process , To ease the pressure on government investment.

The second is to strengthen the industry’s long-term advantages. In-depth review of the long-term field of my country’s integrated circuit industry, facing product fields with comparative advantages such as CMOS image sensors, optoelectronics, NORFlash memory, and AI chips, promote the realization of both technological level and market scale upgrades, and create industrial asymmetric checks and balances.

The third is to accelerate breakthroughs in key core technology shortcomings. Aiming at the “stuck neck” link of high-end chips, key equipment, production materials, design tools, etc., with leading enterprises, scientific research institutions and other innovative core entities, increase resource introduction and policy support, organize key core technology research in the industry, and strive to shorten and internationally advanced Level gap.

Improve the nationwide system and mechanism for scientific and technological research.

Strengthen the supervision and guidance of industrial development. Adhere to the principle of “main body concentration and regional agglomeration”, maintain investment in key core areas such as memory and advanced technology, promote the high-end development of mature technology, special technology, compound semiconductor and other manufacturing industries, and cultivate a manufacturing industry with certain technical strength and capacity scale Cluster. At the same time, with “window guidance” as the starting point, strengthen supervision and accountability of local governments, standardize the development order of the integrated circuit industry, and prevent and resolve major project construction and investment risks.

Establish an independent and open ecosystem. Focusing on industry, supplemented by academia, promoting the transformation from horizontal integration of industrial resources to vertical integration, establishing a system led by complete machine and system manufacturers, software and hardware enterprises, scientific research and innovation institutions, etc., to participate in independent products through product verification, upgrade and iteration, etc. The domestically-made ecosystem with rapidly increasing maturity realizes innovation and synergy.

Innovate the long-term cooperation model of industry, university and research. Through policy guidance, actively play the role of national key R&D plans and major national science and technology projects, explore the establishment of joint R&D projects involving leading integrated circuit companies, give technology commercial value in technology research and development, promote the commercial application of integrated circuits, and realize industrial science ,sustainable development.

Increase the tilt investment of industrial resources.

Give full play to the power of capital to promote industrial enterprises to become bigger and stronger. Start the third phase of the National Big Fund as soon as possible, learn from the successful experience of the first and second phases, adjust the industry investment leading method, target the memory, advanced process, compound semiconductor and other fields, and continue to increase the investment in key enterprises such as SMIC, Yangtze River Storage, Quanzhou San’an, etc. Capital investment to maintain the continuity of corporate support policies; for the integrated circuit industry, use central and provincial funds as guiding funds to promote the injection of funds, banks, venture capital institutions, and private capital into the industry, improve the multi-level capital market, and promote the development of the industry ; Build a unified informatization and credit investigation platform, continue to optimize the industrial financing environment, lower the threshold of industrial investment and financing, and reduce the pressure on government investment.

Build a fertile ground for active talents and ensure the efficient development of the industry. Facing integrated circuit equipment, materials, design, manufacturing, packaging and testing and other links, actively recruit international leading talent teams; make full use of the opportunity to implement the first-level discipline construction of integrated circuits, and face the “stuck neck” fields such as equipment, materials and manufacturing, comprehensively consider and Integrate the national strategic needs and the development needs of industrial enterprises, form a scientific discipline talent training goal, encourage universities to optimize the discipline layout, and strive to cultivate compound talents in basic research, engineering management and other fields to provide talent guarantee for industrial development.