There are as many as 27 well-known Tsinghua chip companies. Among the top ten IC design companies in China in 2019, Tsinghua contributed 4 seats.
From Chen Datong, who went to the United States to establish Haowei Technology, to Zhao Weiguo, who bought and bought all the way, entrepreneurship, investment, mergers and acquisitions, upgrades, mutual support and mutual achievement, are this generation of Tsinghua people The main line of the story. They raised 100 billion yuan from the National Big Fund and A-shares to create a Tsinghua chip circle with a market capitalization of more than 600 billion. Yu Renrong, Zhao Weiguo, Zhang Xuezheng, and Zhu Yiming successfully made it into the New Fortune 500 list.
Compared with European and American counterparts, Tsinghua-based chip companies have obvious shortcomings, and the gap is huge. Can Tsinghua’s “chip”, which gathers the anxious eyes and expectations of the Chinese people, become a Chinese “chip”?
This article is from WeChat official account:New Fortune (ID: newfortune)< span class = "text-remarks">, author: Chenghua Qiu child, the original title: “600 billion market value! Twenty-seven Tsinghua scholars, carrying half of the Chinese chip industry… Tsinghua’s most powerful semiconductor company has surfaced? “, the head picture comes from: Visual China
The history of China’s domestically produced chips cannot bypass the Tsinghua Department.
Under the background of the game of big powers and the blockade of technology, the domestic substitution of the semiconductor industry is in full swing. The chip company founded or at the helm of the graduates of the Department of Electronics and Physics of Tsinghua University is the leader among them. According to the incomplete statistics of New Wealth, only at the 85th level of the Department of Electronics of Tsinghua University, there have been Zhao Weiguo, Chairman of Ziguang Group, Yu Renrong, Founder of Weir, Zhu Yiming, Founder of Zhaoyi Innovation, Feng Chenhui, Co-founder of Zhuosheng Microelectronics, and Gekewei More than ten founders or executives of listed semiconductor companies, including Zhao Lixin, founder of electronics and Zhao Lidong, founder of Suiyuan Technology.
In addition, Wu Ping, Chen Datong, Deng Feng and other domestic first-generation semiconductor entrepreneurs also studied at Tsinghua University. They invested in industrial transformation, weaving a huge alumni network, and boosting the energy of Tsinghua Department to radiate the domestic semiconductor industry chain andCapital circle.
In a sense, Tsinghua University has become China’s “core-making incubator”. The development and strength of Tsinghua-based chip companies is a microcosm of China’s semiconductor industry. If measured by output, what is its status in China and how far is it from leading international companies? How is the Tsinghua chip circle formed? As China’s chip industry is moving from the low-end to the high-end market, what efforts have Tsinghua companies made?
New Fortune conducted a systematic in-depth inventory of 27 well-known chip companies in the Tsinghua Department.
Chip Tsinghua Department: Concentrated in the entrepreneurial field, 90% in the IC design field
Overall, my country’s chip industry layout has covered all aspects of “design-manufacturing-packaging and testing”, but its strength in manufacturing and equipment fields is relatively weak. The same is true for the distribution of Tsinghua-based chip manufacturers in the industry chain.
According to New Wealth statistics, there are 27 well-known Tsinghua chip companies, including domestic head companies such as Unigroup Zhanrui, Unigroup Guowei, Zhaoyi Innovation, Yangtze River Storage, Weir Shares, Zhuoshengwei, etc. Fei Ang Communications, Zonghui Xinguang, Quantum Microelectronics, Horizon Robotics and other start-up companies, most of the latter have completed C and D rounds of financing.
Their founders also showed obvious generational differences: Zhu Yiming, Shu Qingming, Yu Renrong, Wu Shengwu, Feng Chenhui and other listed company founders mostly studied in the Department of Electronics and Physics of Tsinghua University in the 80~90 level, and the new batch of The founders of unicorns mostly enrolled after the 1990s. For example, the three founders of Shenjian Technology, Yao Song, Wang Yu, and Han Song, are all senior brothers from the 2011, 1998, and 2008 levels of the Department of Electronics at Tsinghua University. In 2018, Shenjian Technology was acquired by Xilinx, and it was reported that the purchase price was between 300 million and 400 million US dollars.
Among the various departments of Tsinghua University, Electronics Department has naturally become the base of chip companies. Among the countable chip company founders, as many as 22 graduated from the department, and a small number came from the physics department, automation department and precision instrument department.
90% of these Tsinghua-based companies are concentrated in the upstream chip design field. Except for Shengmei and Wingtech, the other 25 companies are all in the IC design field and “specialize in the technical industry”. They are engaged in 5G baseband chips. (Tsinghua Unigroup), memory chip (Yangtze River Storage, Zhaoyi Innovation), CMOS image chip (Weir shares, Geke Micro), wireless communication radio frequency chip (Broadcom Integration, Huizhi Microelectronics), AI chip (Horizon Robot, Suiyuan Technology) and other designs (Table 1).
Tsinghua Department, who is the best?
In the field of vertical segmentation, many Tsinghua-based chip companies are already domestic leaders in this field.
Ziguang Zhanrui: Has a deep accumulation in the 5G and AI fields
Unisex Zhanrui is an important chip platform of the Unigroup. It has a deep accumulation in the field of 5G and AI. Its products mainly include 5G baseband chips and large SoC chips.( System-on-chip integrated with CPU, GPU, modem and other chips), pan-connect chip (including pan-connectivity such as radio frequency, Bluetooth, Internet of Things, etc.) Chip).
Unisex Zhanrui was formed by the merger of Spreadtrum and RDA. In 2000, Chen Datong, a 77-level alumnus of Tsinghua University, returned to China and founded the mobile phone chip design company Spreadtrum Communications (referred to as “Spreadtrum”), in 2007, Spreadtrum landed on Nasnak. In 2013, Ziguang Group spent US$1.78 billion to acquire Spreadtrum. In 2014, Ziguang Group spent another US$910 million to acquire RDA. RDA is an IoT chip design company, founded in Shanghai in 2004 and listed on NASDAQ in 2011. In 2018, under the control of Zhao Weiguo, Spreadtrum and RDA merged to form Ziguang Zhanrui, which opened up core chips in the two major fields of mobile communications and the Internet of Things.
Since then, Zeng Xuezhong(Level 92 in the Department of Physics, later founded Huixin Communication), Diao Shijing(Former Director of the Electronic Information Department of the Ministry of Industry and Information Technology) and many other students from Tsinghua University have served as the CEO of Ziguang Zhanrui. In terms of 5G, in September 2018, Ziguang Zhanrui released “Spring Vine” (5G baseband chip), “Tiger Ben” (5G SoC processor) The two major brands are accelerating the layout of mid-to-high-end product lines.
According to the 2018 China Integrated Circuit IC Design TOP10 list released by the China Semiconductor Industry Association, Ziguang Zhanrui ranked second, second only to Huawei HiSilicon. However, in the 2019 list, Ziguang Zhanrui has fallen to fifth place.
It is worth mentioning that Unisex has complete mobile phone chip technology from 2G to 5G, and Huawei HiSilicon are one of the only two mobile phone chip platform companies in China. Since Huawei HiSilicon’s mobile phone chips are not sold externally, Ziguang Zhanrui is the only third-party mobile phone chip supplier in China. In recent years, domestic mobile phone shipments have declined, and Ziguang Zhanrui’s performance has been affected, but it still has a relatively high strategic value. Currently, Ziguang Zhanrui is planning to land on the Science and Technology Innovation Board.
Tsinghua Unigroup: Focus on security chips, with a larger share of direct supply to military industry
Tsinghua Unigroup, which belongs to the Ziguang family, is the main provider of security chips. Its products cover aviation, aerospace, ground equipment, ships and other fields. The share of direct supply to military industry is relatively large. Its main business platform has threeBlock: Shenzhen National Microelectronics, Tongxin Micro, Unisplendour Co., Ltd.
Its core subsidiary, Shenzhen State Microelectronics, which specializes in special integrated circuits, is the largest source of profit for Ziguang Guowei. In 2019, Unisplendour National Microelectronics’ revenue increased by 39.54% year-on-year to 3.44 billion yuan, and its net profit attributable to its parent increased by 16.61% year-on-year to 406 million yuan, while China Microelectronics’ net profit was 506 million yuan.(accounting for 124.66%), even exceeded the overall net profit of Ziguang Guowei.
The other subsidiary, Tongxin Micro, is mainly engaged in smart security chips. Driven by downstream demand, its revenue increased from 332 million yuan in 2012 to 1.212 billion yuan in 2019, with a compound annual growth rate of 20.31%. However, due to the fact that most of the products are in the middle and low-end areas, the threshold is low, and the competition is fierce, its profitability has declined.
Tsinghua Unigroup, which holds 36.5% of the shares of Tsinghua Unigroup, is a domestic FPGA chip (developed based on programmable devices PAL and GAL, semi-custom , Programmable integrated circuits) leading enterprises. It is difficult to compile FPGA chips, and the market share is basically monopolized by Xilinx and Intel, which account for 51.1% and 35.8% of the global share, respectively, and the domestic share is 48% and 33%, respectively. The domestic market share of Chinese manufacturers is only 3%, and they are still in their infancy. However, they have achieved breakthroughs in technology and industrialization in recent years. For example, in 2015, Unigroup launched China’s first fully independent property rights Gate-level high-performance FPGA products “Titan” series of chips; In 2018, Unigroup’s PGT180H chip passed the test of ZTE and New H3C Group, for the first time, the mass production application of domestic FPGA chips in the communications market was realized.
In January 2021, Ziguang Guowei announced that it intends to issue convertible bonds with funds raised no more than 1.5 billion yuan for “new high-end security series chip research and development and industrialization projects”, “vehicle controller chip research and development and “Industrialization project” and supplementary working capital. At present, the matter has been approved by the Ministry of Finance and accepted by the China Securities Regulatory Commission.
Zhaoyi Innovation: Deeply explore the memory market, and work with Changxin Storage to promote self-developed DRAM
Founded in 2005, Zhaoyi Innovation is a leading domestic memory chip. Its main business is flash memory chips and their derivatives, microcontroller products andSensor modules, etc., are mainly used in the consumer market, and are currently entering high-end markets such as industrial control and automotive electronics. In 2019, memory chip business revenue accounted for 79.79% of Zhaoyi Innovation’s total revenue.
In the field of memory chips, there is a large gap between domestic and foreign companies, and the global market share of mainland Chinese companies is only 1%.
Memory chips can be simply divided into flash memory and memory, the memory is mainly DRAM(Dynamic Random Access Memory), and the flash memory mainly includes NAND flash And NOR flash memory (code-type flash memory chip), in order of market size, they are DRAM, NAND flash, and NOR flash.
At present, Zhaoyi’s innovative product line includes NOR flash memory, NAND flash memory, MCU, and DRAM products. In the small market of NOR flash memory, which is about three to four billion US dollars, Zhaoyi Innovation is one of the world’s major participating manufacturers. Other mainstream suppliers are China Taiwan Macronix, American Cypress, American Micron, and Taiwan Winbond.
DRAM, the most important semiconductor market segment, is the key point of Zhaoyi Innovation. In 2019, it signed a cooperation agreement with Hefei Industrial Investment and Hefei Changxin Integrated Circuit (“Hefei Changxin”) In the form of convertible bonds, 300 million yuan will be invested in the research and development project of the 19nm 12-inch wafer memory. Zhaoyi Innovation is mainly responsible for R&D and agency sales. After the success of self-developed products, Zhaoyi Innovation will hand over to Changxin 12-inch memory wafer manufacturing base (abbreviated as ” Changxin Storage”) OEM production, which can cut into the vast DRAM market, but also avoid the pressure of huge capital expenditures. In addition, Zhaoyi Innovation has basically established a consignment sales system for DRAM.
At present, the main DRAM manufacturers in China are Fujian Jinhua, Hefei Changxin, and Unisplendour Nanjing. However, the mass production of Unisplendour Nanjing is still in Taiwan Powerchip. Only Fujian Jinhua and Hefei Changxin are self-produced in the mainland. .
The DRAM memory technology of Changxin Storage is mainly derived from the bankrupt German Qimonda, which is a DRAM chip company spin-off from Infineon Semiconductor. Changxin Storage is part of the Hefei DRAM506 project, which is an Anhui provinceHefei is the key project in Hefei, and is also the largest single-investment industrial project in Anhui Province. It will build the first independently developed DRAM manufacturing base with the largest scale and the most advanced technology in China; the shareholder is Hefei Industrial Investment(investment 99.75%) and Hefei Industrial Investment Emerging Strategic Industry Development Corporation (investment 0.25%). At present, the monthly production capacity of Changxin Storage has reached 40,000 pieces/month, completely breaking the monopoly of foreign companies.
Yangtze River Storage: 128-layer stacked NAND flash memory chips, reaching the world’s leading level
Yangtze Storage’s model is similar to Changxin Storage. Tsinghua-based companies cooperate with local governments and the National Integrated Circuit Industry Investment Fund (referred to as “big funds”) Jointly established, but the two main attack directions are different.
Yangtze River Storage is a national memory chip base project jointly established by Ziguang Group and Wuhan Xinxin, focusing on the R&D and manufacturing of 12-inch 3D NAND flash memory. According to DRAM Exchange data, the main players in the NAND flash memory market are Samsung, Toshiba, SanDisk, Micron, Hynix and Intel. Among them, Samsung has a market share of approximately 36%.
The Yangtze River Storage team backed by Ziguang is strong. In May 2018, Diao Shijing, the former director of the Electronic Information Department of the Ministry of Industry and Information Technology, joined Ziguang Group as co-president, in charge of chip business including Yangtze River Storage. Prior to this, Peng Hongbing, the former deputy director of the Electronic Information Department, had served as the vice president of the Big Fund and chairman of the Yangtze River Storage Board of Supervisors.
Yangtze River Storage has invested more than 24 billion U.S. dollars in the first phase. Since 2018, it has continuously made technological breakthroughs, from the initial 32-layer stacked NAND flash memory to 64-layer and 128-layer technology. At present, the 128-layer stacked NAND flash memory has been mass-produced and shipped, and the yield rate is as high as 75. %.
In addition, YMTC also plans to achieve trial production of 192-layer 3D NAND flash memory in 2021. The most advanced level of flash memory chip giants Micron and SK Hynix is 192-layer stacked NAND flash memory, which means that YMTC has reached the world’s leading level.
Moreover, YMTC plans to increase the monthly output of memory chips by one by the second half of 2021.Times, to 100,000 wafers, accounting for about 7% of the world’s total output. It is reported that Samsung Electronics currently produces about 480,000 wafers per month, while Micron’s monthly production capacity is about 180,000 wafers. This will further reduce China’s dependence on imports of memory chips.
Weir shares, Gekewei: domestic CMOS leaders
In the domestic CMOS(image sensor) field, Tsinghua-based companies are in the leading position, which can be attributed to the first generation of Tsinghua-based semiconductors The company’s “talent incubation” role of the company’s (Omnivision). Weir shares and Gekewei are the beneficiaries.
In 2018, Weir shares under Yu Renrong took over the privatized Haowei Technology from alumni Chen Datong. In 2019, Weir shares completed the acquisition of mid-to-low-end CMOS companies-Spyco and CVV, thus mastering the high-, middle- and low-end technologies in the CMOS field, and became a domestic leader. After the completion of the acquisition, the performance of Weir shares exploded. In 2019, revenue increased 41% year-on-year to 13.6 billion yuan, and net profit attributable to the parent was 466 million yuan, an increase of 221% year-on-year.
In addition to Haowei Technology, Gekewei, the second largest CMOS chip manufacturer in China, is currently sprinting into the science and technology innovation board. Its founder, Zhao Lixin, is also from Tsinghua, and graduated from the Department of Electronics with Yu Renrong, Feng Chenhui, and Zhao Lidong.
However, Geke Micro has started in the low-end market. In September 2003, Zhao Lixin, who had worked overseas for 8 years, returned to China and founded Gekewei, starting with a computer camera. After launching new products that cost 20% lower than competitors in 2008, Gekewei’s share of the domestic mobile phone image sensor market has changed from third to first, becoming the world’s largest supplier of low-end image sensors. It is worth mentioning that Zhang Xuezheng, the founder of Wingtech Technology, holds a 0.79% stake in Gekewei through Wentianxia.
He Xinping (Electronics Department 80), who served as COO of Howell Technology, also chose CMOS in the entrepreneurial field. In 2011, He Xinping, who has worked at Howe Technology for 15 years, founded Crystal Phase Light. Jingxiangguang is one of the few companies in the CMOS field that specializes in the security surveillance market. It also focuses on biochips and successfully developed gene sequencing chips. In 2018, it was established in Taiwan, China.Listed.
Zhuo Shengwei: Deeply cultivate RF front-end chip
Feng Chenhui, also from Tsinghua Electronics Department 85, founded Zhuo Shengwei in 2006.
Zhuosheng Micro’s initial business is digital TV and mobile TV chips. After 2010, LNA(RF Low Noise Amplifier) and RF switch As an entry point, we began to transform the R&D and sales of RF front-end chips. After 2012, a complete layout was formed. Products including GPS LNA, WiFi switch, antenna FM switch tuner, and RF communication LNA were gradually introduced into Samsung, Xiaomi, The supply chain of major Android brand manufacturers such as OPPO, vivo, and Huawei has become the largest RF front-end supplier in China and the fifth largest RF switch company in the world.
RF switch is the traditional core business of Zhuosheng Micro. In the first half of 2020, its related business revenue was 853 million yuan, an increase of 93.04% year-on-year, accounting for 85% of total revenue, and successfully achieved full coverage of Android’s first-line terminal brands.
Zhuo Shengwei’s competitiveness lies in its technological innovation allows different series of RF switches to share the underlying mold during the production process, which greatly shortens the stocking cycle and reduces R&D costs.
The difficulty in the development of RF modules is that they support 4G/5G full-band high-complexity modules at the same time. The core of high-complexity modules lies in the design capabilities of high-performance filters and multiplexers. In October 2020, Zhuo Shengwei plans to add 3 billion yuan to the research and development of layout filters and duplexer modules, of which the total investment in the filter project will reach 2.274 billion yuan, which is close to three times the funds raised from its listing.
The local replacement of RF front-end is a golden opportunity. What domestic manufacturers need is not track innovation, but technological research. Through independent research and development of high-performance filtering technology and PA design technology, they can realize the productization and miniaturization of 4G/5G RF chips. , Modularization. Even with confidence in the process of domestic substitution, the capital expenditures of leading international semiconductors start at tens of billions of dollars. The size and investment scale of domestic manufacturers are still difficult to compare, and there are many obstacles on the road to domestic substitution.
Fion Communication, Suiyuan Technology: The Rise of New Talents
TsinghuaA chip start-up company-Fionance Communications is worth looking forward to, it is expected to fill the gap in the domestic high-end optical fiber chip market. In 2014, Mao Wei and Bai Yun, who graduated from the Department of Electronics of Tsinghua University, returned to China and founded Fei Ang Communications, focusing on the research and development of integrated circuits in the field of optical fiber and wired communications. In 2017, Fion Communications became the first domestic company to mass-produce 25G/100G high-speed optical interconnect transceiver chips, breaking the monopoly of high-end optical communication chips by foreign manufacturers.
Another rising Tsinghua-based chip company is Suiyuan Technology, which makes AI chips. Its founder, Zhao Lidong(Electronics Department 85) once worked at AMD China, and later went to RADIK as the president, and founded Suiyuan in March 2018 Technology. Suiyuan Technology’s entrepreneurial team is mainly from AMD, which launched China’s first self-developed artificial intelligence high-end training chip.
Suiyuan Technology is well-known in the chip industry: In 18 months, the AI training chip with the highest technical threshold was successfully taped out at one time. In December 2019, the “Yunsi” cloud training accelerator card “Yunsui T10” was released to the outside world, directly PK the NVIDIA Tesla V100, which has a monopoly in this field.
On January 15, 2021, Suiyuan Technology announced the completion of the C round of 1.8 billion yuan in financing. This is less than 8 months after its last round of 700 million yuan financing. It is worth mentioning that, less than 3 years after its establishment, Suiyuan Technology has accumulated more than 3.1 billion yuan in financing. And in every round of investment institutions, there is Tencent.
On the whole, Tsinghua-based chip companies have contributed a lot to the domestic chip design industry. According to the statistics of the China Semiconductor Industry Association, among the top ten IC design companies in China, Tsinghua-based companies occupy a full 4 seats, namely Howe Group (No. 2), Ziguang Zhanrui (5th place), Gekewei(8th place), Zhaoyi Innovations (10th place) (Table 2).
Weakness in the middle and lower reaches: Tsinghua’s semiconductor equipment “single seedling” Shengmei shares
At the same time, Tsinghua-based companies are relatively weak in the fields of manufacturing, packaging and testing in the middle and lower reaches, and have neither emerged unicorns nor produced giants among the top ten in the industry. However, it also has contributions that cannot be ignored. For example, domestic leaders in the field of chip manufacturing-SMIC and Hua Hong Semiconductor, the previous CEOs and directors cannot bypass Tsinghua.
As the largest integrated circuit foundry in China, several CEOs of SMIC are from the Department of Electronics of Tsinghua University, including Jiang Shangzhou.(Level 78) , Zhang Wenyi(Level 78), Zhao Haijun(Level 83) . Hua Hong Semiconductor’s current CEO Zhang Suxin comes from the 82nd level of the Tsinghua Thermal Engineering Department. The largest shareholder of Hua Hong Semiconductor is Shanghai Hua Hong International Co., Ltd. (27.09% shareholding), and the actual controller is Shanghai SASAC.
In addition, Dong Haoran, chairman of Huada Semiconductor, one of the top ten IC design companies, is also an alumnus of Tsinghua University. Huada Semiconductor is a state-owned enterprise China Electronics Information Industry Group Co., Ltd. (CEC) integrated integrated circuit companies formed.
It is noteworthy that, at present, the largest domestic semiconductor cleaning equipment manufacturer Shengmei shares, its founder and actual controller Wang Hui is from Tsinghua Precision Instrument Department 78, passed the American ACMR(ACMR.NSDQ) holds 91.67% of shares in Shengmei. ACMR earlyIt was listed on Nasdaq in November 2017. The current market value is US$1.4 billion, but it is only a holding company and does not engage in any specific business. In addition to holding shares in Shengmei, it also holds ACM Research. (Cayman) 100% equity.
Currently, there are few companies in Mainland China that can provide semiconductor cleaning equipment, and cleaning equipment is indispensable in wafer manufacturing, and advanced photolithography machines are the two key components for the microfabrication of integrated circuits. Semiconductor cleaning equipment, which is the core product of Shengmei, contributed 86.27%, 92.91% and 84.10% of its main revenue from 2017 to 2019.
The customers of Shengmei shares include Hua Hong Group, Yangtze River Storage, Jin Ruihong, SMIC, Changjiang Electronics Technology, etc. Its products are used in wafer manufacturing and advanced packaging. In the field of advanced packaging wet equipment, its counterparts in China mainly include North China Chuang, Xinyuan Micro, Zhichun Technology, etc.; overseas counterparts are international giants such as Applied Materials, LAM, TEL, DNS, and related products of Shengmei Co., Ltd. It is at the same level as its Chinese counterparts as a whole; Compared with its counterparts in the world, the market competitiveness of other equipment is weaker except for the glue application equipment. According to the statistics of China Semiconductor Industry Association, in 2019, Shengmei shares ranked fourth among Chinese semiconductor equipment companies(Table 3) .
Currently, Shengmei shares have been listed on the Science and Technology Innovation Board, and it is the first US stock market to spin off the IPO of the Science and Technology Innovation Board. However, on October 8, 2020, Shengmei shares were accused of fraud by the controlling shareholder ACMR, transfer of profits, and suspected financial fraud by J Capital Research, a short-selling agency.
How to shape the Tsinghua chip circle
The reason why Tsinghua companies can grow into the local hegemon in the field of chip design is not only due to the high-quality educational resources of Tsinghua University itself, but also benefiting from the mutual investment and mutual support of the same teachers and brothers, and the full linkage in the capital market. The power of the circle formed.
To make chips, one requires technology and talents, and second, capital investment. Chinese chip giants are mostly state-owned, while the vast majority of Tsinghua-based chip companies are private enterprises. New Wealth has further reviewed the growth history of these Tsinghua-based chip companies, and conducted research on their important founders and important strategic shareholders. It has found that a group of Tsinghua students who have studied in the United States have been called by the times to return to China to start their own businesses. Funds are channeled into the next generation and become the mainstay of the industry.
Entrepreneurship, investment, mergers and acquisitions, upgrades, and finally realize domestic substitution, or the mission of this generation of Tsinghua people.
The first generation of semiconductor entrepreneurs in Mainland China: Wu Ping and Chen Datong
In 1956, my country proposed to “scientific march” and listed semiconductor technology as a development focus. The following year, the Department of Radio Electronics of Tsinghua University established the Semiconductor Teaching and Research Group. In 1980, Tsinghua University established the Institute of Microelectronics on this basis, and in 2004 established the Department of Microelectronics and Nanoelectronics.
Chen Datong and Wu Ping are the first batch of Ph.Ds graduated from the Department of Electronics at Tsinghua University. They are 77 and 79 respectively. However, when they graduated with a Ph.D., the domestic industrial technology was still very backward, without funds and equipment, it was almost impossible to focus on the microelectronics major. In the daze of “learning something but not using it”, they have all left the country with the big world.
Chen Datong, a postdoctoral fellow at Stanford, joined Howe Technology in 1995 and became the founder. Chen Datong described the team at that time, “80% are Chinese, 80% of the Chinese are international students, and 80% of the international students are Tsinghua graduates.” In the entrepreneurial soil in the United States, Howe, a member of the Tsinghua team, became the first company to turn CMOS into a product and landed on Nasdaq in December 2000.
In 1999, the state issued “Several Policies to Encourage the Development of Software Industry and Integrated Circuit Industry” (known as “Document 18” in the industry) to encourage Overseas high-tech talents return to China to start their own businesses. After Howe went public, Chen Datong resigned and returned to China. What attracted him was the blank domestic market.Rong> And it is the “Alumni Network” that helped him to enter the domestic market.
Under the recommendation of Tsinghua student Ji Weiwei(Level 77 of the Radio Department), Chen Datong and Qu Weizhi, then Deputy Minister of Information Industry We met and learned about the industry’s dilemma-China, which has the most mobile phone users in the world, has to import all core mobile phone chips from the United States and Europe.
The core chip of a mobile phone is one of the most complex integrated circuits. It not only requires ultra-high integration of tens of millions of doors, but also requires ultra-low power consumption to meet long standby time.
At that time, there was a shortage of engineers with semiconductor design experience in China, and there were almost no high-end talents. The domestic TD-SCDMA standard has been conceived for 5 years, but the industrial development is stuck in a bottleneck. Whether it is T3G with the background of “National Brand” Datang Telecom or Kamin with the background of Putian Communication, none of them can make a commercial TD-SCDMA core chip. The development of domestic 3G is facing the embarrassing situation of “standards exist, chip vacancies”.
Based on the logic of “in the tide of mobile communications, the market for mobile phone chips will be several times that of computers”, Chen Datong, who is not familiar with 3G, found his alumnus Qiao Peng(Tsinghua Electronics Department 81, co-founder of Meitong Wireless and LingXun), the direction is to develop 3G mobile phone core chips. After that, Chen Datong returned to Silicon Valley to recruit troops and found Wu Ping, who was responsible for the development of 2G mobile phone core chips at MobileLink at the time, and Tsinghua Electronics alumni Lu Bin, Xie Fei, Kang Yi, and Zhao Tong; at the same time recruited 50-60 Engineers.
Just when the Tsinghua Alumni Meeting met, Spreadtrum was formally established in April 2001. The founder was Chen Datong(CTO), Wu Ping(CEO), Ji Jin(Tsinghua Radio Department 77 level) span>, Fan Renyong(Nanjing University Level 78), Zhang Xiang(Zhejiang University ,Resigned in 2004).
At that time, after the Internet bubble burst, it was not until June 2001 that Wu Ping received the first round of investment of US$6.5 million from Taiwan Fuxin and MediaTek Chairman Cai Mingjie, at a cost of more than half of the shares.
Spreadtrum Communications, which incorporates foreign investment, is registered in the Cayman Islands. The dilution of the holdings also paved the way for Wu Ping to lose control of Spreadtrum and turn to investment after exiting.
At that time, the equity issue of the entrepreneurial team was difficult to solve. Because of the law at that time, the use of intellectual property rights to buy shares can only account for up to 15% after professional evaluation. Obviously, this ratio cannot effectively attract a large number of high-end talents to join. However, the aggressive Spreadtrum still launched chip products in 2003.
At this time, Spreadtrum’s competitors are all predators such as Texas Instruments, Motorola, Siemens, and Philips, and it is difficult to receive orders from major international brands such as Nokia, Ericsson, and Motorola. However, there are a large number of domestic manufacturers who do not have the technology and experience but want to produce mobile phones. Spreadtrum can provide them with a complete set of “total solutions” from chip to software, to printed circuit board and chassis design, and certification testing. “Become an OEM manufacturer of “cottage” mobile phones. The cooperation between Spreadtrum and the early Wingtech Technology is a typical case.
It is worth mentioning that MediaTek, which invested in Spreadtrum, later became Spreadtrum’s biggest competitor. It paid more attention to market and customer development, and played fiercely, almost dominating the knockoff market in Mainland China.
In 2007, Spreadtrum landed on Nasdaq and was acquired by Tsinghua Unisplendour in 2013 under the control of Zhao Weiguo. (Picture 1) .
Senior brothers invest in younger brothers: the cyclical wealth creation of the semiconductor “circle”
In addition to Chen Datong and Wu Ping, other Tsinghua brothers who started their businesses in Silicon Valley have also succeeded in the chip circle. There are many examples of benefiting from “senior brothers investing in their younger brothers”. Zhu Yiming of Zhaoyi Innovation is one of the representatives.
After graduating with a master’s degree from Tsinghua University in 1994, Zhu Yiming’s doctoral studies at Tsinghua lasted only halfway, and he entered the State University of New York with a major in electronic engineering. Halfway through his Ph.D. study in the United States, Zhu Yiming’s passion for entrepreneurship made Zhu Yiming go to Silicon Valley, and later worked as a storage device at Silicon Valley Monolithic System Technology Company (MST) Many years of chip development work.
Before and after 2004, the storage market was monopolized by American and Japanese companies. To be a memory means to design related chips, and memory chips have always been a pain point for domestic semiconductors. “China is already the world’s largest integrated circuit market, but there is no memory design company of its own, and more than 90% of its chips rely on imports.” Zhu Yiming, who is optimistic about the domestic market, firmly returned to China to start a business.
Fortunately, with the help of Tsinghua’s alumni circle, Zhu Yiming’s financing is much easier than imagined.
As early as 2001, Tsinghua University alumni engaged in high-tech entrepreneurship founded an organization TEG in Silicon Valley (later TEEC , Tsinghua Entrepreneurs Association),specially provide support for potential entrepreneurs who graduated from Tsinghua University. Zhu Yiming found his senior and one of the TEEC initiators Li Jun, and got the first $100,000 venture capital with the storage design scheme.
Under Li Jun’s introduction, Zhu Yiming also met Xue Jun, an 83-level alumnus who was then the deputy general manager of Tsinghua Science Park Venture Capital. Xue Jun promised to help Zhu Yiming raise $1 million in start-up capital. He found Luo Zhuo, an 80-level alumnus of the Engineering Department. Luo Zhuo was the general manager of Tsinghua Science Park Incubator Co., Ltd., and he readily agreed to invest 2 million yuan. In addition, Deng Feng, an 81-level student in the Department of Electronics, invested US$50,000, and Li Jun and others’ funds invested US$100,000…Finally, Zhu Yiming raised a total of US$920,000.
With this money, in 2005, Zhu Yiming returned to China to establish Zhaoyi Innovation, and successfully developed the first mobile high-speed memory chip in China, becoming the first domestic company to mass-produce mainstream memory. In 2016, Zhaoyi Innovation landed on A-shares with an issue price of 23.26 yuan/share. After listing, there were 18 consecutive one-word daily limits, and the opening price was 174.99 yuan/share. With the 1st lottery winning a net profit of 150,000 yuan, he became the “new king” of the year.
When Zhu Yiming stood at the center of the capital stage, he relayed his support to the next Tsinghua fellow. In 2018, Zhaoyi Innovation acquired 1.7 billion yuan, a premium of 19 times, and acquired the optical fingerprint recognition chip maker Si Liwei, the latter is Tsinghua alumnus Cheng Taiyi(Level 90 of the Department of Electronics)
From industry to investment: The constraints of the times have become a call
From the Silicon Valley entrepreneurship to the return to China, these pioneers of semiconductor marketization, because of the particularity of the industry, entrepreneurship is inevitably intertwined with national development and policy orientation, and follows the tide of the times.
The development of China’s semiconductor industry is divided into four stages: the closed development period from 1958 to 1979; the difficult transition period from 1979 to 2000; the barbaric growth period led by the market from 200 to 2014; and the government and the market since 2014 A period of rapid development jointly promoted.
Corresponding to this, the chip investment field has experienced three rounds of upsurges, namely the entrepreneurial wave of overseas returnees driven by the rise of US dollar VCs in the Chinese market around 2005, the semiconductor entrepreneurial fever promoted by RMB funds after the opening of the ChiNext in 2009, and the country in 2014 After the establishment of the big fund, the large-scale development of the industry brought about by the entry of government funds in a market-oriented manner.
The first batch of Tsinghua Semiconductor entrepreneurs also followed the tide of the times to enter the investment track. For example, Chen Datong, who founded Haowei Technology and Spreadtrum successively, joined Northern Light Venture Capital as a partner, and then successively established his own investment management institutions-Huashan Capital, Huachuang Capital, and Yuanhepu Hua (table 4).
The Northern Light Venture Capital, founded by Feng Deng who graduated from the Department of Electronic Engineering of Tsinghua University, is an important incubation platform for Tsinghua startups. In 2001, the firewall software Netscreen that Deng Feng participated in was listed on the Nasdaq. In 2004, Netscreen was acquired by Juniper Networks for US$4.2 billion.
In 2005, Deng Feng returned to China with his first pot of gold to establish Northern Lights Venture Capital and set up the base in Tsinghua Science and Technology Park. Most of the founders of the companies he invested in were his Tsinghua alumni and Silicon Valley friends. The most typical one was Chen Datong.
Chen Datong became acquainted with Deng Feng during his work in Silicon Valley. After returning to China to start the exhibition, Deng Feng entered the exhibition with his personal investment in 2002. In 2008, Chen Datong withdrew from Spreadtrum and joined Northern Light Venture Capital as a partner.
Luo Dongping, who participated in the NetScreen startup with Deng Feng, (Electronics Department 88), returned to China from Silicon Valley in 2006 and founded a network security product Mountain Stone Net Branch. As both a Tsinghua brother and a comrade-in-arms of NetScreen, Deng Feng is optimistic about the team of Hillstone. Aurora Borealis became the first investment institution to support Hillstone in 2007.
Of course, this investment has a sentimental and emotional side. Because Deng Feng realized at the beginning of the investment, “From a rational judgment, this investment will be very long.” Twelve years later, Hillstone.com launched on the Sci-tech Innovation Board on September 30, 2019, which also confirmed Deng Feng’s judgment. Northern Light Venture Capital’s initial $15 million has already exited through existing stocks, realizing several times the cash return. After the company went public, it still held more than 1.8 billion yuan of unpaid book returns.
After Northern Light Ventures completed the transition from entrepreneur to professional investor, Chen Datong became the manager of an overseas high-tech investment fund of China Investment Corporation in 2009, and an alumnus who was also an entrepreneur Yang Lei founded Huashan Capital, a fund management company.
In the fission of entrepreneurship and investment circles, those big bosses who initially had technical skills and international vision, and were familiar with the rules of the venture capital game, finally chose the capital track. And investment has also become a link for the continuous growth of Tsinghua’s chip circle.
The main attacker of the National Fund
Relying on the deep cultivation in the semiconductor industry and joining forces with big funds,This is a major feature of these Tsinghua investors.
Following the establishment of Huashan Capital, a VC organization, Chen Datong and Walden Capital (founded in Silicon Valley in 1987, focusing on the global electronics industry chain, especially the semiconductor industry Investment) In cooperation with Tsinghua Holdings, Huachuang Investment was established to be entrusted with the management of the Beijing IC Industry Fund in the packaging and testing part of the fund. Today, Huachuang Investment has changed its name to Puhua Capital.
In September 2018, the Puhua team led by Chen Datong cooperated with Suzhou Yuanhe Holdings, Big Fund, and Jiangsu Provincial Government Investment Fund to establish Yuanhe Puhua(formerly known as “Yuanhe Huachuang”). Yuanhe Puhua’s first fund has a scale of 3.28 billion yuan, focusing on industrial investment in integrated circuit design and related applications.
Wu Yuefeng Capital, led by Wu Ping, has won the National Fund to become its LP. Wu Yuefeng Capital was established in 2011, mainly in the field of chips, and has established more than 10 sub-funds with a management scale of more than 3 billion US dollars. Among the Tsinghua-based chip companies alone, Wu Yuefeng Capital has invested in star listed companies such as Zhaoyi Innovation, Wingtech, Beijing Junzheng, Broadcom Integration, and domestic IC design giant Rockchip and Semiconductor Silicon that went public in February 2020. Chip manufacturer Shanghai Silicon Industry, consumer electronics chip platform company Aojie Technology (Sprint Technology Innovation Board), and also invested in Zonghuixin For start-up companies such as Optoelectronics and Inflextech, only some of the listed companies hold a stock market value of more than 20 billion (Table 5).
In December 2015, Wuyuefeng Capital and other institutions completed an agreement with the US DRAM chip design company Chipeng Semiconductor (ISSI), the main body of the acquisition is Beijing Sicheng.
ISSI is mainly engaged in integrated circuit memory chips and analog chips with high integration density, high performance quality, and high economic value. Its products cover automotive and industrial applications. Its memory chip products maintain a global leading position in the fields of DRAM and SRAM(static random access memory).
It is worth mentioning that the ISSI is still alumni from Tsinghua University. In February 2017, Zhaoyi Innovation, which went public for less than a month, issued a transaction plan to issue shares to acquire 100% of Beijing Sicheng for 6.5 billion yuan, but the merger has not been approved. More than 5 months later, Zhaoyi Innovation announced that it would stop the acquisition. And Liu Qiang of Beijing Junzheng, a Tsinghua alumni who failed to bid for Haowei Technology before, did not miss this time. In November 2018, Beijing Junzheng indirectly acquired a 51.59% stake in Beijing Sicheng for 2.64 billion yuan. After a lapse of one year, in November 2019, Beijing Junzheng’s application for acquiring ISSI was approved by the Committee on Foreign Investment in the United States (CFIUS). For 7.2 billion yuan.
The primary and secondary markets received hundreds of billions of financing
The rendezvous of Tsinghua-based entrepreneurs and investors, combined with the favor of large funds and the enthusiasm of the secondary market, has made Tsinghua-based chip companies increasingly comfortable in financing. When the first phase of the large fund was established, about one-third of the funds went to Tsinghua-based companies.
As of the end of 2018, the first phase of the big fund investment has basically been completed, with a total investment of about 104.7 billion yuan, of which the chip manufacturing field has the largest investment, reaching 50.014 billion yuan, accounting for 47.8%; the second is the IC design field, investment Reached 20.59 billion yuan, accounting for 19.7%(Figure 2). The company with the highest investment amount is Yangtze River Storage in the field of IC manufacturing, with an investment amount of 19 billion yuan and a shareholding ratio of 49.22%. Big funds have also given great support to Ziguang Group, which focuses on IC design, and promised to invest more than 10 billion yuan within 5 years.
According to the statistics of Guosen Securities, only Tsinghua-based companies have invested more than 30 billion yuan in large funds(Table 6). The second phase of the Big Fund is expected to raise more than 200 billion yuan, and it is clear that it will provide strong support to enterprises with existing layouts in the fields of etching machines, thin film equipment, testing equipment, and cleaning equipment. This may mean that Tsinghua chip companies such as Shengmei Semiconductor have further opportunities for capital injection.
In recent years, the concept of chip stocks has become popular, and the market value of related companies has skyrocketed, which has also opened a green channel for refinancing. New wealth statistics show that in the secondary market, the IPO financing and equity refinancing of Tsinghua-based chip companies totaled 66.804 billion yuan (Table 7). /span>. This means that only from the primary and secondary markets, the equity financing of 9 Tsinghua-based chip listed companies has exceeded 100 billion yuan.
On the road of domestic substitution and upgrading, Tsinghua-based companies make full use of their own capital and network resources to break the ice. The capital market also gave them rich rewards. Weir shares Yu Renrong, Wingtech Zhang Xuezheng, Ziguang Group Zhao Weiguo, Zhaoyi Innovations Zhu Yiming and other Tsinghua chip companies were put on the New Fortune 500 list. Among them, Yu Renrong and Zhang Xuezheng, with their wealth growth rates of 500% and 344%, earned 49.3 billion yuan and 17.95 billion yuan respectively, becoming the first and third among the 50 fastest growing wealth in China in 2020.(Table 8).
How far is it from world-class?
A-share investors’ optimism about the future of China’s chip industry has given Tsinghua-based chip companies a better financing environment and helped them enrich their capital strength.
Data released by the State Council shows that China’s chip self-sufficiency rate in 2019 is only about 30%, and the goal is to reach 70% by 2025.
Although capital and the market have given directions, it is hard to be optimistic that the technology can really successfully upgrade and iterate. Although Tsinghua-based chip companies are the leading domestic chip companies and have grown through mutual assistance within the circle, from the status of the industry chain to the scale of market value, and then to the performance of revenue and net profit, it is still very close to the world’s top chip companies. There is a gap that needs to be bridged.
The status of the industry chain is very disparity
Take the Tsinghua Department’s best-performing IC design field as an example. Except for AP/BP(mobile processor), the gap is relatively small. The technological gap in several other core subdivisions is still wide, and the cityThe market is basically monopolized by foreign giants, and domestic products are mainly used in the low-end market (Table 9).
The gap between Tsinghua-based companies and their overseas counterparts also indirectly reflects the overall shortcomings of China’s chip industry. According to CICC’s research report, as the demand for import substitution heats up, a number of Chinese companies have emerged in almost all semiconductor categories, although most companies are far behind American companies in technology and market share. It is still relatively large, but its existence has provided the possibility for China to shorten the gap.
From the perspective of chip categories, domestic chips have made breakthroughs in discrete devices, sensors, wireless communication chips, application processors and other subdivisions, with a global market share of more than 5%; but in CPU, GPU, FPGA, memory Other fields are still almost blank, and the current localization rate is close to zero.
37 times of revenue and 66 times of net profit: Tsinghua is crushed by US stock chip companies
The relatively weak position in the industry chain also determines the fundamentals of Tsinghua-based chip companies. Let’s take the 10 listed companies that have been born in Tsinghua’s chip circle as an observation sample.
Among them, the top two companies in terms of revenue and net profit are Wingtech and Weir. Since 2019, their stock prices have both risen. The current market value has exceeded 100 billion yuan, and Weir has exceeded 200 billion yuan (Table 10).
The two hottest A-share chip companies are M&A-driven growth. Wingtech, in particular, has spent more than 30 billion yuan to win Anshi Semiconductor. The latter has the world’s largest market share in the automotive power semiconductor field and successfully transformed from a mobile phone manufacturer to a semiconductor company. (For details, please refer to New Fortune’s August 2020 article“Xingui Wentai Remarks Counterattack”). After the consolidation of Anshi Semiconductor in 2019, Wingtech’s net profit increased 18 times from 72 million yuan to 1.379 billion yuan.
Zhao Weiguo, another famous alumnus of the Department of Electronics of Tsinghua University, is also known for being good at capital operation. Zhao Weiguo successively served as general manager and chairman of Ziguang Group in 2010, and concurrently served as senior vice president of Tsinghua Holdings, the parent company of Ziguang Group in June 2013, and has since initiated a series of mergers and acquisitions.
In 2013, Tsinghua Unigroup spent US$1.78 billion to acquire Spreadtrum. In 2014, it spent US$910 million to acquire the Internet of Things chip design company RDA. In May 2015, Tsinghua Unigroup (subsidiary of Tsinghua Group) once again took over 51% of the shares of New H3C Group for US$2.5 billion. New H3C Group is HP’s China business.
In 2015, Tsinghua Unigroup launched a huge acquisition plan to acquire Micron Technology for USD 23 billion. Micron Technology is an American DRAM, NAND flash memory, and CMOS chip design company, as well as its own wafer manufacturing plant. Due to strict inspections in the United States, the final transaction was rejected. In June 2020, Ziguang Guowei (subsidiary of Ziguang Group) sold 18 billion yuan to acquire French Linxens(Intelligent Security Chip Company)’s plan, the Securities Regulatory Commission pressed the “pause button”.
Nowadays, subject to drastic changes in the external environment, I want to copy the path of “buy, buy, buy instead of R&D”, goIt has been difficult to acquire overseas high-quality and scarce semiconductor targets. Zhao Weiguo once threw the olive branch of mergers and acquisitions to TSMC, but Guo Taiming once publicly stated that Zhao Weiguo is just an investor in stocks. How can he ask TSMC chairman Zhang Zhongmou, a world semiconductor godfather, how much does the company cost Sell! “You can’t buy it with money today.”
Aside from these merger-driven companies, the endogenous growth of Tsinghua-based chip companies as a whole is relatively small, such as Zhaoyi Innovation and Ziguang Guowei’s revenues are maintained at around 3 billion yuan , The net profit is about 400 to 600 million yuan. IC equipment leader Shengmei shares revenue of 757 million yuan, with a net profit of only 135 million yuan. Because the gap between Wingtech and Weir shares is too large with other companies, the median can better reflect the actual profitability of Tsinghua-based chip listed companies: the median revenue of these 10 companies is 2.342 billion yuan, and the median net profit is The number is 380 million yuan.
The top ten chip companies in the US (in order of revenue)’s median revenue and net profit reached 87.769 billion yuan. 25.14 billion yuan, which is 37 times of Tsinghua’s revenue and 66 times of net profit (Table 11).
In terms of profitability, the gross margins of Tsinghua-based chip companies and US stock chip companies are also far behind.
The gross profit margins of Qualcomm and Texas Instruments are both above 60%, and the midstream gross profit margins of the top 10 chip companies in the US stock market are all above 50%. The midstream gross profit margin of Tsinghua-based chip companies is around 36%.
For example, Gekewei, which “wins with the price ratio”, has a gross profit margin of only 26%. In order to gain market share, Zhao Lixin reduced the cost to half of other companies’ product performance with almost no difference in product performance. Such competitiveness has allowed Gekewei to rapidly expand its revenue scale. It is currently in the global graph.The image sensor market ranks eighth.
Huge shipments have led to rapid revenue growth of Gekewei in recent years, but its net profit is not high: From 2017 to 2019, its net profit attributable to the parent was -8.717 million. From January to March 2020, its net profit will be 197 million yuan, 500 million yuan and 359 million yuan. The fierce competition in the low-end market has brought high levels of debt and inventory. The prospectus shows that Gekewei’s interest-bearing liabilities in the first quarter of 2020 will reach 1.77 billion yuan, and the inventory will reach 1.55 billion yuan.
In contrast, Zhuoshengwei has the highest gross profit margin, reaching 52.47%, which is twice that of Gekewei.
The success of Zhuo Shengwei lies in the process of domestic substitution of technology has been initiated. The radio frequency front end of mobile phones, especially in the field of radio frequency filters, has always been a shortcoming in the domestic mobile phone industry chain. The BAW filter in the high-end market(bulk acoustic wave technology) ) The market is basically monopolized by a few foreign manufacturers such as Skyworks, and other manufacturers only account for about 3%. Zhuo Shengwei began mass production of SAW filters in 2019 (surface acoustic wave technology), especially after Huawei was sanctioned, it further accelerated The process of domestic substitution. From January 1 to November 17, 2020, Zhuo Shengwei’s stock price rose by 140.7%; and since its listing in June 2019, its stock price has risen 27 times.
If measured by market value, 9 (Ziguang Guowei, Weir shares, Beijing Junzheng, Zhaoyi Innovation, Broadcom Integration, Zhuoshengwei, Gekewei, Shengmei Co., Ltd., Wingtech)The market value of Tsinghua-based chip listed companies(including the valuation of companies that have passed the meeting) Span> totaled 647.145 billion yuan, only 1/8 of TSMC’s market value.
Even with the addition of national teams such as giants SMIC, Hua Hong Semiconductor and Shanghai Belling, their total volume is still only 1/3 of TSMC(Figure 3).
The relatively low gross profit margin and market value scale indirectly restrict the competitiveness and development space of Tsinghua-based chip companies. Let’s take a look at how the competitiveness of American chip companies is formed.
According to SIA data, the United States has a market share of 47% in the global semiconductor industry in 2019, and is in a leading position in the industrial chain of EDA software, IP, semiconductor equipment, and chip design. This kind of leadership comes from the business model of “high profits + high R&D investment + global layout”.
According to CICC’s calculations, in 2019, the gross profit of the US semiconductor industry exceeded US$120 billion, with a gross profit margin of 54%, and R&D investment was as high as US$40 billion, and the R&D expense ratio reached 18%. High revenue brings high gross profit, enabling companies to achieve high-intensity R&D investment, increase technical barriers, thereby gaining more market share and high gross profit, forming a virtuous circle(Figure 4).
Because of this, companies such as Intel, Nvidia, and AMD can maintain their global technological leadership for a long time and seize the potential of emerging markets. According to SIA and WSTS data, in China, US semiconductor companies have a market share of 48%. In 2019, Qualcomm, Microchip, Micron, Qorvo and other major manufacturers accounted for more than 50% of the revenue in the Chinese market.
In the various subdivisions of oligopoly, Tsinghua-based companies with insufficient market value and fundamentals should lead domestic chips to share a cupSoup, the difficulty can be imagined. However, they have no choice but to move on.
When the upgrade is in progress: from the low-end to the high-end, made by design testing
Generally speaking, when a new chip is launched, the manufacturer that is the first to launch a product has a higher pricing power in the market and a higher gross profit margin; when similar products are launched on the market, their gross profit will be compressed; once the product is launched Renewal, the rate of price decline will be more obvious.
Even if Zhuo Shengwei, with the highest gross profit margin, still competes fully in the low- and mid-range markets, other Tsinghua-based chip companies cannot escape this situation. Transition and breakthrough from the low-end to the high-end market is a problem that Tsinghua and even domestic semiconductor companies cannot avoid. One of the important channels is mergers and acquisitions.
Before the acquisition of Haowei Technology, the market has been arguing about whether Weir shares’ business model is “distribution-based, and design-assisted”. The prospectus shows that in 2016, its semiconductor design business revenue reached 711 million yuan, and its distribution business revenue reached 1.441 billion yuan, nearly twice the former. In order to prove that it has the “original” continuity and competitiveness of the arena, Weir shares extend upstream, In 2018~2019, it successfully acquired Howe Technology and Spyco and became a local integrated circuit. Design leading enterprises.
When the mid-to-low-end market is saturated, another transition path is to extend to the downstream manufacturing links. For example, Gekewei, which has a low gross profit margin, plans to raise 6.376 billion yuan to build a 12-inch wafer fab. The original Fabless (no Factory chip supplier) model is shifted to Fab-Lite(Light Fab) model. As a benchmark, the foundry TSMC has a gross profit margin of 46% and a net profit margin of over 33%.
In view of the various shortcomings of the chip industry, after the release of the “National Integrated Circuit Industry Development and Promotion Program” in 2014, the country has made a layout according to categories. For example, SMIC focuses on high-end logic chips, Ziguang and Yangtze Memory focus on 3D NAND, Hefei Changxin focuses on DRAM, and Huahong focuses on power devices. Over the years, domestic companies have gradually broken international monopolies in many sub-sectors. For example, in 2017, Hua Hong launched the third-generation Super junction(Super Junction Structure) technology has achieved phased results; Zhaoyi’s innovative 32-bit MCU chip has a performance comparable to the world’s top STM32(Developed by STMicroelectronics).
The existence of a huge gap is a huge opportunity for industry investment and entrepreneurship
Whether it is too concentrated in the field of IC design, or relative to the low gross profit margin and low competitiveness of American companies, the performance of Tsinghua-based chip companies is only a profile of the overall performance of China’s chip industry.
The international competitiveness of domestic chip companies in subdivided fields is ranked from high to low: packaging>chip design>chip manufacturing>wafer lithography machine and EDA.
The US “containment” of Chinese chips and the existence of a huge gap in the chip industry between China and the United States are more opportunities for domestic chip companies. A gap in imported products will undoubtedly force domestic manufacturers to develop high-end products. The biggest advantage of China’s semiconductor industry chain lies in the comprehensive coverage of categories and the high intensity of government investment. In addition, the degree of resource matching and the flexibility of social organizations are also a major advantage.
From the perspective of the four major parts of the semiconductor industry, China lags behind in the field of materials and equipment; manufacturing is one to two generations behind, that is, 5 to 10 years; in terms of design, the low-end can meet the enemy, and the high-end is still behind; only The packaging and testing aspects have caught up and are in the first camp.
The global semiconductor value chain may face tremendous changes under the external pursuit of China’s chip demand. According to the Boston Consulting Group’s forecast, under the scenario where the Sino-US trade frictions maintain the status quo, in the next 2 to 3 years, the global market share of US semiconductors will drop from 48% in 2018 to 40%, and its market share will mainly flow to China< span class="text-remarks" label="Remark">(+4%), Korea(+2%), In Japan (+1%), the self-sufficiency rate of Chinese semiconductors will also rise from 14% in 2018 to 25%. Under the assumption of “the Sino-US trade friction continues to escalate”, the global share of US semiconductors will drop to 30% in the next 2 to 3 years.g>China’s market share will rise to 10%, South Korea will rise to 31%, Japan will rise to 13%, and China’s semiconductor self-sufficiency rate will also rise to 40%(Figure 5).
In the past five years, China’s massive investment in the chip industry has achieved remarkable results. In 2019, the sales of the chip industry in mainland China increased by 10% year-on-year, and it was the only region that achieved positive growth. In contrast, Europe decreased by 2%, China’s Taiwan region decreased by 3%, and the United States decreased by 9%. Japan dropped by 24% and South Korea dropped by 32%(Figure 6).
Due to the rise of artificial intelligence and the Internet of Things, chips have entered an explosive period, coupled with limited supply, in the next 20 years, it is expected that chips will continue to be a sunrise industry in China. Chinese chip companies represented by the Tsinghua Department have undoubtedly gathered the most anxious eyes and expectations of the market. When will they grow into giants that match the industrial strength of the entire country?
This article is from WeChat official account:New Fortune (ID: newfortune) , Author: Cheng Huaqiu child span> p>