After the establishment of the “Semiconductor Alliance of America”, what impact will it have on Chinese chips?

I have to admit that now is the “best time” for domestic chips.

Earlier this month, the United States wooed 64 well-known companies in the semiconductor industry chain around the world to establish the “Semiconductor Alliance of America”, which included TSMC and other companies in Taiwan, while mainland semiconductor companies were all excluded. Obviously, the United States hopes to establish an alliance to contain Chinese companies in the semiconductor industry.

In the face of the big situation, Huawei HiSilicon once again set an example.

Data shows that Huawei applied for the registration of a new “Kirin processor” trademark on the 22nd of last month, which is classified as “9 scientific instruments” in the international classification, and the current status is “application for registration.”

After the establishment of the “Semiconductor Alliance of America”, what impact will it have on Chinese chips?

The chip is very likely to be a 3nm process mobile phone chip developed by Huawei internally, named Kirin 9010, and is expected to complete the chip design this year. If the chip can be produced smoothly, it will once again establish Huawei’s leading position in the chip field.

As Huawei founder Ren Zhengfei said: China’s chip design capabilities have entered the world’s leading level, and breakthroughs in this link have greatly enhanced the competitiveness of China’s semiconductors.

Foreign monopolies still exist

The localization of chips has always been an unavoidable topic.

From the ZTE incident to the complete blockade of Huawei, it directly reflects the most real situation of the current Chinese semiconductor industry-rapid and abnormal development.

In terms of design and packaging and testing, domestic companies have reached an internationally leading level, but other aspects, including wafer manufacturing, EDA software, and the machines and materials used in the production of semiconductors, are in a relatively backward stage.

As we all know, there are currently three major departments that determine chip hegemony, namely materials, EDA software, and semiconductor equipment.

Among them, materials are mainly monopolized by Japan, EDA software is monopolized by the United States, and semiconductor equipment is monopolized by the United States and Japan, and the dominant is the United States.

Among the 19 main materials used to make chips, 14 of Japan ranks first in the world, with a total share of more than 60%. Nearly 70% of the world’s silicon wafers are produced in Japan, which is the foundation of chip manufacturing. At present, the world’s three major EDA software (used in chip design) giants Keng Teng, Mentor and Synopsys are all American companies, and almost all chip design and manufacturing companies in the world cannot do without them.

In the field of production equipment, Applied Materials and Panlin are all American companies among the world’s three major giants, including etching, film deposition, and ecosystems. The United States also maintains a leading position.

As a latecomer in semiconductor technology and commercialization, the backwardness of China’s semiconductor industry has gradually fallen behind due to its own path, domestic production and research environment, and unfriendly industrial environment, and missed the best time to integrate into the industry. .

Since the invention of the first integrated circuit in human history in 1957, the center of global semiconductors has been in the Silicon Valley of the United States. Therefore, it has established its own semiconductor industry system, and the mainland of China has not started to undertake the transfer of the semiconductor industry until recent years, and began the road of localization.

In the past two years, China’s chip industry has blossomed, with continuous development in materials, equipment, EDA software, and continuous progress in key links such as design, manufacturing, packaging and testing.

However, American semiconductors have gradually fallen into a stagnant circle, and products have been constrained by foundries such as TSMC. This is also one of the reasons for the establishment of the “Semiconductor Alliance” in the United States.

In general, semiconductors are a huge industry that requires global cooperation.

Chip design will be a breakthrough

On November 10 last year, Huawei’s Xinsheng Community officially released a document called “General Manager Ren’s Speech at the C9 University President’s Visiting Symposium.”

In the document, Ren Zhengfei said: Our country must re-understand the problem of chips, and China has now become the world’s leader in chip design.

Compared with other links, China’s chip design has made rapid progress.

After the establishment of the “Semiconductor Alliance of America”, what impact will it have on Chinese chips?

Due to the accumulation of resources, most domestic companies focus on R&D and design of “asset-light” models. For example, HiSilicon, Spreadtrum and other companies are “fabless design companies”, that is, they are only responsible for the design process, and manufacturing, packaging and testing are left to Other companies. Since 2016, most chip companies that have doubled in growth also belong to the field of design.

As of December 2020, according to statistics from the China Semiconductor Industry Association, there are already 2,218 chip design companies in China, an increase of 24.6% compared to 2019. Among them, in addition to traditional design companies such as Beijing, Shanghai, and Shenzhen, there are more than 100 design companies in Wuxi, Hangzhou, Xi’an, Chengdu, Nanjing, Wuhan, Suzhou, Hefei, Xiamen and other cities. It can be seen that the growth rate of domestic design companies is still relatively fast.

At present, AI chips have formed new outlets. At present, Huawei HiSilicon is already on par with Qualcomm in mobile phone SoC chips; and in the latest AI chip field, HiSilicon, Cambrian and other companies are also highly competitive. The design level has also driven the development of domestic design.

But at the same time, most domestic enterprises are small companies, and 80% of them are enterprises with a scale of less than 100 employees, which also reflects the serious shortage of talents. Data show that my country needs 700,000 semiconductor talents in the future, but currently there are less than 300,000, with a gap of 400,000. Among them, there is a shortage of industry leaders in particular. However, the introduction of talents is not a long-term solution after all. If the domestic semiconductor industry wants to develop, it must be based on cultivating local talents.

The situation looks pessimistic, but the prospects are still bright

Although there are still various problems, we have to admit that now is the “best time” for domestic chips.

With the support of the country and the efforts of enterprises, we see that China’s chip industry is making great strides forward.

On the one hand, the general trend of the semiconductor industry’s transfer to China will not change. On the other hand, policies and capital have driven the improvement of China’s semiconductor industry chain.

Nowadays, good news for the chip industry is flooding in. In the past two years, Beijing, Zhejiang, Henan, Guangdong, Shanghai, Shenzhen and other places have issued implementation opinions and plans to promote the development of integrated circuits. Since 2017, the tax reduction policy for the chip industry has been promulgated once a year. Under the upsurge of lack of cores, various places have invested in the construction of chip factories.

In August last year, the State Council issued the “Several Policies to Promote the High-Quality Development of the Integrated Circuit Industry and Software Industry in the New Era”. The document actively promotes and accelerates the implementation of policies in three aspects: fiscal and taxation policies, investment and financing policies, and research and development policies.

It is the favorable external environment and the efforts of domestic chip companies that are pushing domestic chips to compete to the first-class level.

Under this general trend, the World Semiconductor Conference opened again in Nanjing. During the period, the “IC Design Developer Conference” sponsored by the Department of Industry and Information Technology of Jiangsu Province and undertaken by and Runzhan International will be held at the Conference Center of the Nanjing International Expo on June 10.

At that time, guests from well-known domestic chip companies, EDA software companies and investment institutions will discuss the future of domestic chip design together at this conference.

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