Hottest semiconductor beware of resource mismatch

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Semiconductor beware of resource mismatch. Integrated circuit design resources are still accelerating the dispersion.

most links of the integrated circuit industry need more than a decade of accumulation to achieve results. The influx of funds can not comprehensively improve the technology and industrial competitiveness of the industry in the short term. On the contrary, more and more enterprises are beginning to feel the suffering of capital "overheating"

after standing on the "tuyere" for nearly three years, China's integrated circuit industry is still popular with capital. Moreover, after the ZTE incident, more and more local governments and social capital have been involved in the integrated circuit industry. After the 2018 two sessions, 30 major cities in China have proposed to develop the integrated circuit industry, of which many governments have established integrated circuit industry development funds, and the scale of the funds raised is expected to exceed 300billion yuan

however, most links of the integrated circuit industry need more than a decade of accumulation to achieve results. The influx of funds can not comprehensively improve the technology and industrial competitiveness of the industry in the short term. On the contrary, more and more enterprises are beginning to feel the suffering caused by the "overheating" of capital

"many new companies have been established and companies with accumulated experience will also expand. High price poaching can be seen everywhere." At the 2018 Jiwei semiconductor summit held recently, a number of integrated circuit enterprises told the 21st Century Business Herald, "suddenly I felt the rapid rise in talent costs, especially key talents. The talent cost of mainland semiconductors has exceeded that of Taiwan, and the salary of semiconductor talents in Shanghai is approaching Silicon Valley."

the long-term backwardness has made China's integrated circuits maintain a relatively decentralized pattern, and the industrial concentration is far behind that of the United States and Taiwan, China. It is the only way for the development of the domestic integrated circuit industry to guide the concentration of talents, capital, technology and market share to advantageous enterprises. But now, the relatively dispersed capital that has gradually poured in has gradually deviated from the main channel

"herd" resource mismatch

according to the data of China Semiconductor Association, in 2017, the total revenue of China's top ten integrated circuit design companies was 78.82 billion yuan, accounting for 38% of the total industry revenue of 207.35 billion yuan, basically the same as 36% in 2013. Although major investments in the industry have been staged frequently since 2013, the industry concentration has not increased. In contrast, among American semiconductor enterprises, the top ten design companies account for more than 90% of the total industry revenue, and in Taiwan, China, this proportion also exceeds 80%

however, the resources of China's integrated circuit design industry are still further dispersed. At the end of 2015, the number of integrated circuit design enterprises in China was 736, but by the end of 2016, it had reached 1362. The integrated circuit industry development policies successively issued by various regions not only attract leading enterprises to land, overseas talents to start businesses, and the transformation of technological achievements, but also disperse industry resources

"regions with conditions should be supported to develop the integrated circuit industry, and the wolf tactics of rushing into mass action should not be adopted." Wang Huilian, general manager of Xiamen semiconductor Investment Group Co., Ltd., said in his speech at the 2018 Jiwei semiconductor summit that "excessive capital speculation is not conducive to the accumulation of talents and technology, and is prone to serious problems such as the wear and fracture of the dynamometer piston belt, which seriously violates the law of industrial development."

at present, only Xiamen has set up a special semiconductor investment company to take charge of the investment and planning of the integrated circuit industry. Local governments such as Nanjing, Hefei, Chengdu, Hangzhou, Xi'an, Wuhan and so on rely on the advantages of local leading enterprises and school talent resources to carry out ecological supporting construction. However, more and more local governments that do not have an industrial foundation have also begun to participate in this "semiconductor battle"

"capital is very important, but patience is more important. In fact, many local governments do not understand the integrated circuit industry, so it is difficult to put 'patience' into the industry as a resource." An industry personage who has contacts with most domestic enterprises and local governments analyzed the 21st century economic report, "Government personnel often have high mobility, and all regions hope to see market results during their tenure when attracting investment. However, any challenging technology in this industry can not be solved within a tenure, and most of it can be effective quickly. Most of it is domestic mature and highly competitive products, or some projects with patent risks. These are not conducive to the development of the industry."

for integrated circuit enterprises, after the initial loneliness suddenly incarnated in the star industry, more and more enterprises began to suffer from loss and frustration, "many enterprises could not resist the temptation to accept the overvalued value, but the performance could not meet the expectations of investors. As a result, the next round of financing could only be forced to lower the value, and the enterprises suffered great harm." Sunyuwang, President of SMIC Juyuan, who focuses on investment in the integrated circuit industry, introduced at the summit, "I have seen several such cases. Now the so-called stars and unicorns may become naked swimmers in five years. I hope that enterprises and investors can be rational, refuse and be able to measure and control inflated valuations according to any preset mode."

however, it is becoming more and more difficult for enterprises to maintain rationality. The influx of capital has indeed eased the financial constraints of enterprises, but it has also broken the "long-term patience" that the integrated circuit industry needs more

low profit and low R & D ratio

in fact, long-term low-end competition has made Chinese integrated circuit enterprises deeply involved in a price war, making it difficult to impact high-end technologies and products

according to the financial reports recently released by Chinese chip enterprises, the 2018 semi annual reports of 15 listed companies, including Changdian technology, Tongfu wechat, huiding technology, Shilan wechat, Weill Co., Ltd., Ziguang Guowei and Zhaoyi innovation, are counted. The total revenue of 15 companies is 49 billion yuan, the profit is about 2.29 billion yuan, and the net interest rate is about 4.67%; The total R & D expenditure is 2.969 billion yuan, and the R & D revenue accounts for about 6%. Among them, only huiding technology, Ziguang Guowei and Quanzhi technology accounted for more than 20% of the R & D revenue, and the rest were less than 10%. The profit margin and the proportion of R & D revenue are far lower than that of the United States and Taiwan

"take the RF chip of as an example, domestic enterprises have made RF chips for a long time, but it has been low-cost competition for a long time, which has been the case in the era of 2G, 3G and 4G." A senior rf industry source said, "take 4G RF as an example, the RF of all flagship machines of Huawei, oppo and vivo in China are skyworks and qrovo imported from the United States."

a RF chip contains hundreds of components. Skyworks can package all RF components into one module. Each one costs $30, while many domestic enterprises mostly produce a small number of components, and the comprehensive price of all components is less than $4. Skyworks, qrovo and Broadcom have almost monopolized all 4G RF high-end markets, while dozens of domestic enterprises are fighting in the low-end market. "However, the annual salary of an engineer who is able to design RF chips has been raised to 500000, compared with only 10000 before, and only 200000 or 300000 in Taiwan. The price war is too fierce, and the talent cost is too high. How can we afford to make 4G high-end chips? Not to mention 5g."

in fact, from the most basic resistance and power components to the core chip design and manufacturing, China is still in the middle and low end of the global industry for a long time, and only packaging and testing can be close to the international leading level

this environment is very similar to the domestic manufacturing industry a few years ago. Before 2010, the top ten manufacturers in the world almost never had Chinese manufacturers. After more than ten years of low price and homogeneous competition during 2G and 3G, Chinese manufacturers finally began to break out under the promotion of the overall industrial chain, long-term technology accumulation, the rapid development of 4G market and other multiple accumulation. Then they solved the problems of international brand building, market development, patent barriers and so on, and finally won three places in the world's top five

China's integrated circuit industry is bound to experience more and longer setbacks and hardships than the vibration test, which began to sprout about 4 or 510 years ago. Compared with the rush of seedlings, China's integrated circuit industry needs to think more about how to deal with the increasingly fierce price war and the upcoming patent disputes

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