Innovation Research Report | How to stimulate the development potential of Chinese semiconductor companies to gain a competitive advantage and lead a new round of growth?

In recent years, with the rapid development of networking, informatization, and intelligence, the application fields of semiconductors have continued to expand, and their importance in global economic and social development has increased day by day. At the same time, more and more countries have increased their semiconductors, and each country has different competitive advantages in the semiconductor value chain. At present, Chinese manufacturers generate more revenue in communication chips, analog chips and OSD design, mature process manufacturing and packaging and testing , while the front-end equipment and raw material markets are in their infancy and are gradually gaining market share.

It is worth mentioning that Chinese companies are stepping into the fast lane in terms of chip design , especially in memory chips and analog chips. CPU/GPU/ASIC are also in the fast-starting stage. Among them, cloud computing manufacturers (Alibaba, Tencent, Baidu, etc.) have a huge demand for computing and storage chips . From the perspective of customized performance and cost control, cloud computing manufacturers are also actively involved in chip design, which cannot be ignored. the power of.

In order to better demonstrate the market position of China's semiconductors in the chip design process, this white paper selects and presents company insights in different semiconductor fields, covering CPU/GPU/ASIC, SoC chips, memory chips, and analog chips.

Semiconductor industry value chain: The most upstream enterprises are responsible for the production of equipment, raw materials and EDA software required for semiconductor design and manufacturing. These equipment, raw materials, and EDA software are widely used in the manufacture of integrated circuits (ICs), optoelectronic devices, discrete devices, sensors and other fields.

On the whole, China started late in the semiconductor design and manufacturing chain, and its accumulation is relatively weak. It is worth mentioning that in the design of some chips, as well as in the packaging and testing process, representative Chinese companies are stepping up their efforts to catch up and have achieved certain results. After further analysis, we found that Chinese manufacturers have gained more revenue in communication chips, analog chips and OSD design, mature process manufacturing and packaging and testing .

In chip design, Chinese companies are stepping into the fast lane. Looking at the main chip categories, Chinese manufacturers have established a certain degree of competitiveness in memory chips and analog chips; CPU/GPU/ASIC are in the rapid start stage and face some supply chain and ecological risks.

Storage chip: From the perspective of internal structure, it includes NAND (flash memory chips) and DRAM (memory). The former is used in SSD solid-state drives and mobile phones, and the latter is used in PCs. The major manufacturers of these two chips have achieved mass production . In terms of technical capabilities, NAND is catching up to the world's leading level, while DRAM still has a gap with the world's leading level and is rapidly catching up. In terms of performance, NAND performance is close to that of the world, while DRAM still has a certain gap . Since memory chips have relatively low requirements for the manufacturing process, the supply chain risk is relatively small , and there is less dependence on the international ecosystem, such as X-tacking, the self-developed technology system of YMTC iterative optimization. In the future, with the gradual increase in production capacity of major Chinese manufacturers, it is expected that the market position of memory chips will rise to meet domestic storage needs.

Analog chips: widely used in consumer electronics, automotive and industrial electronics. In terms of technical capabilities, many manufacturers have achieved commercial use, and most manufacturers focus on the production of sub-category products. Therefore, the Chinese market provides fewer types of products. However, the performance of sub-category products that have entered mass production is close to the global level. Analog chips mainly use processes above 28nm. In the future, with the advantages of low prices and flexible services, if domestic analog chips continue to carry out functional innovation, it is expected to meet the huge domestic market demand.

CPU (Central Processing Unit). CPU is one of the main accessories of electronic computers, often used in servers and PCs. Gartner's 2020 global semiconductor terminal market share shows that in 2020, the global CPU market will be about 500 billion yuan, and Chinese chip design companies will account for 7 % of the total revenue.

GPU (graphics chip). Including graphics GPU and computing GPU. In terms of technical capabilities, a small number of manufacturers have achieved mass production, and only one product has reached the most advanced 7nm process, and it is still in the initial commercial stage. The GPU advanced process supply chain is facing certain challenges. The self-built ecology has not yet been established on a large scale , relying on the NVIDIA CUDA software ecology.

AI/ML ASICs . Mainly used in servers, it is divided into AI training and AI reasoning. In 2020, China's AI training chip market will be about 4.6 billion yuan, and AI reasoning will be about 2.5 billion yuan. In terms of technical capabilities, many Chinese manufacturers have completed mass production and realized commercial use. Among them, the most advanced products have reached 7nm, and the performance of a few players in the field of AI training and reasoning chips is close to the world's leading level . Similar to the situation of GPU, AI/ML ASIC relies on advanced manufacturing process, but the ecosystem is mainly self-built and less dependent on external. With the support of strong capital and technical capabilities, large-scale cloud computing service providers (CSPs) are actively participating in the development and application of ASIC products. Bain suggested that cloud computing service providers need to clarify their own customization requirements, so as to improve their ability in the field of self-developed chips. investment efficiency.

From the perspective of downstream applications, in China, consumer electronics and automotive electronics are the direction of most chip manufacturers. Looking forward to the future, Bain predicts that from 2020 to 2025, the two major markets will maintain a high growth rate of about 15-20%. situation.

From 2018 to 2021, Chinese SoC companies received a total of about 50 billion yuan in financing. According to Gartner's semiconductor forecast for the fourth quarter of 2021 and Yole Development data, because cutting-edge logic chips are the most profitable market segment, IoT and automotive SoC Attracted major investment. The financing amount of companies in the Internet of Things field has reached about 19 billion yuan, and many companies are still in the early stage of financing, and the automotive SoC field ranks second with 16 billion yuan. In addition, the mobile phone/tablet field and the security field are respectively behind.

China's semiconductor investment market is gradually shifting to mid-to-late-stage projects, and design is still the main investment link, including computing chips and automotive semiconductors.

Enlightenment for operators

Main players in the semiconductor market: actively carry out adaptation and collaboration, jointly promote the localization ecosystem, and create a more resilient local supply system; secondly, based on the first point, with the help of local advantages, respond to the needs of downstream customers in a timely manner, forging and international manufacturers Differentiated service capabilities; pay attention to potential acquisition opportunities, strengthen existing businesses through vertical integration, or make up for shortcomings and expand territory through horizontal acquisitions.

New forces in the industry: focus on, actively participate in, and semiconductor subdivisions that have strong synergies with their main business. As the second curve, grow into a new force in the industry.