Big Markets Breed Big Industries

- Sep 15, 2018-

At present, the world's major economic powers are focusing on strengthening manufacturing, accelerating the revitalization of the real economy and seizing the commanding heights of global economic competition.Under the new normal of economic development, China's real economy is undergoing profound transformation and transformation. Traditional industries are undergoing accelerated transformation and upgrading. A number of strategic emerging industries are accelerating growth.In particular, some emerging industries have grown from small to large and weak to strong in the international competition. Their development has attracted great attention and become a new highlight in the supply-side structural reform.From today, this newspaper launched a column titled "focusing on the new real economy", introducing the development of integrated circuits, biological medicine, display industry, domestic mobile phone and other industries.

28 nanometer scale growth, 14 nanometer successful debut, 7 nanometer start research and development..From 28 nanometers to 7 nanometers, China's integrated circuit industry and the international advanced level of distance is getting smaller.

"" China's integrated circuit market accounts for 62.8 percent of global demand and is the world's largest integrated circuit market." "Huo yutao, director of the institute of integrated circuits (IC), a think tank, told China economic daily that China's IC industry, driven by the market, has maintained rapid growth, its technological innovation capacity has been improved, the strength of key enterprises has been greatly enhanced, and the support capacity of industrial development has been significantly enhanced.

Rapid industrial scale growth

"With the support of market demand and relevant national policies, China's integrated circuit industry has maintained a high and steady development trend."Said ding wenwu, chairman of China high-end chip alliance and President of national integrated circuit industry investment fund.

In 2016, China's output of integrated circuits was 132.9 billion pieces, up about 22.3 percent year-on-year.Annual sales reached 43.35 billion yuan, up 20.1 percent year-on-year, far higher than the global growth rate of 1.1 percent.The regional agglomeration and development effect is more obvious. The three major industrial cluster areas of the Yangtze river delta, the pearl river delta and the beijing-tianjin ring bohai sea are developing rapidly, with sales accounting for more than 90% of the total national scale.

"On the whole, China's integrated circuit industry is developing in the direction of high technology content and its industrial structure is more optimized and reasonable."Huo yutao said.

A typical performance is the chip design industry has increased the proportion.According to huo yutao, closed testing has long been a high proportion of China's integrated circuit industry due to relatively low technical barriers, small investment and quick results.However, with the gradual enhancement of the strength of domestic chip design enterprises, the proportion of design industry in the industrial chain has increased steadily. Since 2015, the proportion of design industry in the industry has exceeded that in the closed testing industry.

The proportion of each link in the industrial chain tends to be reasonable.Driven by multi-level demands such as mobile intelligent terminals, IPTV and video monitoring, cloud computing, big data and intelligent hardware innovation, chip design industry achieved sales revenue of 164.43 billion yuan in 2016, up by 24.1% year-on-year.Benefiting from the growth of orders in the chip design industry, the capacity utilization rate of the chip manufacturing industry continued to be fully loaded, and the sales revenue reached 112.69 billion yuan in 2016, up 25.1 percent year-on-year.Due to the full capacity of the manufacturing industry and the impact of overseas mergers and acquisitions, the closed beta industry achieved sales revenue of 156.43 billion yuan in 2016, up 13% year-on-year.

"" the chip design industry, which accounts for nearly 40 percent, will bring a large number of orders for the downstream chip manufacturing and packaging testing, effectively promoting the coordinated development of the industrial chain.Many places, such as wuhan, shenzhen, hefei and quanzhou, are planning or starting to build memory chip production lines."Said xia yan, an analyst at the institute of integrated circuits, a think tank.

Capital operations are becoming more active

On March 28, 2017, China development bank and China core investment management co., ltd. respectively signed cooperation agreements with tsinghua unigroup, which will receive investment and financing support worth up to 150 billion yuan, focusing on developing integrated circuit related business sectors.

The investment in IC industry is large and the return is slow. It is an industry that "burns money", but the capital enthusiasm does not decrease. In 2016, the investment scale in China's IC manufacturing sector increased by 31.1%.

Huo yutao believes that the prosperity of the investment and financing market of the integrated circuit industry cannot be achieved without the financial and policy guidance of national and local governments.Since the outline of national integrated circuit industry development and promotion program was issued in 2014 and the national integrated circuit industry investment fund was established, local governments have set up local investment funds one after another, leveraging the investment of social capital in the integrated circuit industry.

It is understood that by the end of 2016, the national integrated circuit industry investment fund had invested more than 80 billion yuan to support the integrated circuit industry.Driven by national funds, local funds, social capital and financial institutions pay more attention to the integrated circuit industry, and the financing difficulties for the industry have initially eased.

According to ding wenwu, there is a strong desire to set up sub-funds in various regions at present. Industrial funds have been set up successively in Beijing, wuhan, Shanghai, sichuan, shaanxi, etc. The total amount of local funds announced by all regions at the end of 2016 has exceeded 200 billion yuan.

Domestic enterprises and capital have stepped onto the international m&a stage.For example, qingxin huacheng led the acquisition of haowei technology in the United States, wuyue feng capital led the acquisition of smic semiconductor in the United States, jianguang capital acquired NXP's radio frequency and standard products division, smic acquired LFoundry, the Italian foundry, changdian technology acquired Singapore xingke jinpeng, and tongfu microelectronics acquired AMD's closed testing plant.In the past two years, the amount of international mergers and acquisitions led by domestic capital has reached 13 billion us dollars.

The increasing activity of capital operation has greatly boosted the confidence of industrial development.A batch of major chip manufacturing projects started one after another: TSMC initiated a 12-inch advanced logic process production line project with a total investment of 3 billion us dollars in nanjing, which is expected to be put into production in the second half of 2018, with a monthly production capacity of 20,000.The first-phase investment of jinhua memory project in fujian is 37 billion yuan, and it is expected to produce 60,000 DRAM (dynamic random access memory) chips per month in 2018.Total investment of $24 billion wuhan memory project started..

"The development strategy of transnational large enterprises in China has also been gradually adjusted, with the shift from sole proprietorship to technology authorization, strategic investment, advanced production capacity transfer, joint venture and other modes, and the accelerated transfer of international advanced technology and capital to China."Xia Yan said.

The level of international cooperation continues to improve, high-end chip and advanced technology cooperation has become a hot spot.Smic, huawei, qualcomm and IMEC of Belgium formed a joint venture to jointly develop advanced manufacturing processes for 14 nanometer chips.Intel and qualcomm signed agreements with tsinghua university, lanqi technology and guizhou province to conduct in-depth cooperation in the field of server chips.Qualcomm set up a joint venture with guizhou provincial government, huaxintong, to develop high-performance server chips based on ARM architecture.Tianjin haiguang was authorized by AMD company X86 architecture to set up a joint venture to develop server CPU chips.

Close to the global no. 1 camp

Spreadtrum has launched a 14-nanometer 8-core 64-bit LTE chip platform for the mid and high-end smartphone market worldwide.The chip was manufactured by Intel, which for the first time commissioned a Chinese integrated circuit design company.

"A series of policies and measures to encourage industrial development have been introduced, effectively relieving the investment and financing bottlenecks, further optimizing the development environment, stimulating the inherent vitality of the market, and bringing industrial development to a new level."The ministry of industry and information division deputy director peng hongbing said.

Peng hongbing points out, our country integrated circuit industry innovation ability is remarkable enhancement.The performance of high-end general chip such as CPU continues to improve, the design capability of system-level chip is close to the international advanced level, the 32/28 nanometer manufacturing process realizes scale mass production, and the memory realizes strategic layout.Through the integration of international resources, the packaging and testing capabilities of the middle and high-end have been greatly improved, and the equipment and materials industry has gradually gained a firm foothold.

"" the strength of China's backbone integrated circuit enterprises is close to the world's first camp." "Huo yutao said.

In 2016, the number of domestic design enterprises entering the top 50 in the world reached 11, and two of them entered the top 10.Smic has been profitable for 19 consecutive quarters with record earnings, gross profit and profit.Unisplendour has entered the top 10 global integrated circuit design companies, with a design level of 16/14 nanometers.Changdian technology after the acquisition of the xingke jinpeng industry ranking to the world's third closed testing industry.Significant progress has been made in the integration and serialization of equipment of north China semiconductor and China micro semiconductor.

Peng hongbing pointed out that China's innovative integrated circuit technology and product reserves are insufficient, the situation that the core technology is subject to human is still not fundamentally changed.The pattern of single product structure, mostly at the middle and low end, and mainly relying on import for high-end products has not changed fundamentally, which has seriously affected industrial transformation and upgrading and even national security.

"China is the world's largest integrated circuit market, but not the largest producer of integrated circuits.""Chinese IC has always been dependent on imports, mainly because the structure of domestic independent chip products at the middle and low end has not been fundamentally changed, and the self-supply rate of Chinese chips is only about 8 percent," said huo yutao.

Ye tianchun, director of the institute of microelectronics of the Chinese academy of sciences, summed up the strategic significance of developing the integrated circuit industry: "solving China core and supporting China's development in the next 30 years."It can be said that integrated circuit is the core of information technology industry.

Peng hongbing revealed that the ministry of industry and information technology will pay more attention to resource integration, strengthen top-level design, focus on key enterprises, key nodes and major projects, promote coordinated development of the industrial chain, and create a manufacturing innovation center.At the same time, with the application demand as the traction, the soft and hard collaboration is strengthened to create the ecosystem large platform.

"We will continue to promote differentiated product development, further strengthen demand traction, use terminals to define chips, upgrade the level of chips in consumer and communications products, improve product price performance, step up industrial control, automotive electronics, sensors and other chip development, and promote supply-side structural reform of chip products."Xia Yan said.