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"Core Future" China's core development is gradually on track


According to a forecast, by 2020, 85% of China's semiconductor consumption will come from overseas, and only 15% will be manufactured locally; while US chip makers will be the main suppliers in the Chinese market, followed by Samsung Electronics (Samsung Electronics). The Chinese government hopes to reverse this situation and allow Chinese manufacturers to fill 50% of local semiconductor demand in 2020, with a view to playing an important role in the global smartphone supply chain by increasing domestic semiconductor production capacity.

In order to achieve the above goals, China needs to support several local semiconductor companies with revenues of up to US$10 billion in order to achieve the required US$150 billion in chip sales. But at present, there are only two semiconductor manufacturers with revenues of more than one billion US dollars in China-HiSilicon Technologies and Spreadtrum Communications.

China intends to expand semiconductor supply through the following strategies:

Between 2016 and 2020, invest US$100 billion to establish the domestic semiconductor industry ecosystem; these funds will help strengthen the competitiveness of China's fabless chip industry in IP and product design, and at the same time cultivate engineer talents to ensure graduation from universities The number of new engineers in colleges is sufficient for the industry. Participants in the investment include China's official investment institutions Tsinghua Unigroup and Shanghai Pudong Science and Technology Investment Co., Ltd. (ShanghaiPudongScienceandTechnologyInvestment).

The establishment of a fab aims to achieve a capacity of 1 million wafers per month in 2020; those fabs will support the manufacture of memory and non-memory products, and emphasize competitive process technology. The joint venture company will likely be part of the implementation of this plan.

China’s target of one million wafers per month, excluding those who manufacture chips in China; for example, Samsung in Xi’an, SK Hynix in Wuxi, and Intel (Intel in Dalian) ), and Texas Instruments (TI) with a plant in Chengdu.

It is estimated that in 2015, the shipment of Chinese branded smartphones in the global market will total 643 million units, while the shipment of non-Chinese branded smartphones will be 594 million units; this phenomenon of Chinese local brand shipments surpassing foreign brands This is mainly due to the huge Chinese market and the sales volume of highly competitive Chinese mobile phone brands also appearing in markets outside China such as India and South America.

Chinese local brand owners design and sell their own smartphones, and they are manufactured locally by manufacturers such as Hon Hai Precision, and the next stage is to allow local Chinese manufacturers to manufacture mobile phone chips. At present, Chinese chip manufacturers are already producing 4G modem chips and application processors, and mobile phone displays are also produced locally in China; local Chinese battery suppliers are also expanding production capacity.

Those Chinese manufacturers have a very positive attitude towards promoting market growth and are willing to invest in local markets and take risks; this is very different from international brands such as Nokia, Motorola Mobility and BlackBerry. At present, the main players in the smartphone market competition are Apple, Samsung and Chinese local brands. Other wars may also be launched, but through effective planning and integration, it will bring real positive influence to Chinese semiconductors.

Overall, while maintaining its focus on low costs, China is undergoing a shift to higher-level technology; China's automotive, base station, server and other product supply chains continue to strengthen, and LED lighting equipment production is also in a high-growth state. Although China still needs a lot of effort to achieve its goals, the local has a firm entrepreneurial environment and strong financial support from the government, and future development cannot be underestimated.

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