The development of China's chip industry faces challenges, and AI may become a breakthrough

Chip design is progressing rapidly, and it is urgent to break through to the high-end

IC design involves expertise in both hardware and software. Hardware includes the principles and applications of digital logic circuits, analog circuits, high-frequency circuits, etc. The software includes basic numerical logic description languages such as VHDL, Microcomputer Assembly Language, and C language. To put it simply, it not only designs the body of the chip, but also initially gives it a soul. It can be seen that in the entire field of chip manufacturing, IC design undoubtedly stands on the commanding heights, resulting in world-class giants such as Intel, Qualcomm, Samsung, Texas Instruments, Siemens, etc.

As we all know, in the era of PCs, Intel and AMD monopolized the PC chip market. Due to the rise of China (Julong, Datang, ZTE, Huawei) in the telecommunications industry, China has gradually begun to realize the autonomy of communication equipment manufacturing, and the rise of the communication equipment manufacturing industry has unexpectedly brought an unexpected ending to China, that is, China's chip industry has begun to sprout with the rise of China's communication industry.

Huawei's HiSilicon, ZTE Microelectronics, and Datang have all become one of China's largest chip manufacturers. In the era of mobile phones and tablets, due to the rise of local mobile phone manufacturers and tablet manufacturers in China, China's companies such as Spreadtrum, Allwinner, and Rockchip have also gained development opportunities.

According to ICinsight's report, among the top 50 pure chip design companies in the world, there was only one in China in 2009, and it was Huawei's HiSilicon that broke into the world's top 50 earlier, which increased to 11 in 2016, including HiSilicon, Unisoc Zhanrui, ZTE, Datang, NARI, BGI, Ruidico, ISSI, Rockchip, Allwinner, and Montage. It can be seen that the top nine, HiSilicon, ZTE, Datang are all born in the telecommunications industry, Nanrui is to provide chips for smart grids, and Allwinner, Rockchip, Zhanrui, etc. provide chips for mobile phones, tablets, etc.

In 2016, there were 160 chip design companies in China with sales of more than 100 million yuan, and it can be said that chip design is fully blooming in China. In 2015, HiSilicon was the sixth in the world, and UNISOC was the tenth in the world, and in the top ten, HiSilicon and UNISOC were growing rapidly.

In 2017, a new ranking report on the top ten integrated circuit design/manufacturing industries in China in 2017 released by the Semiconductor Association and the China Electronics Information Industry Development Research Institute of the Ministry of Industry and Information Technology showed that among the top ten integrated circuit design companies in China, Huawei HiSilicon Semiconductor ranked first with sales of 36.1 billion yuan, UNISOC ranked second with 11 billion yuan, and ZTE Microelectronics ranked third with 7.6 billion yuan. This was followed by BGI Semiconductor, Zhixin Microelectronics, Goodix Technology, Silan Microelectronics, Duntai Technology (Shenzhen) Co., Ltd., Geke Microelectronics and Zhongxing Microelectronics.

Although there have been significant breakthroughs in some chip products on the design side in Chinese mainland, the IP core still relies on ARM and other devices, and the EDA tools used on the design side are completely licensed by manufacturers such as Synopsys, Cadence, and Mentor.

In addition, the mainstream products of our country's chip design companies are still concentrated in the middle and low end, and have not yet fully entered the international main battlefield. In addition to making important breakthroughs in the field of communications, there are not many achievements in the field of major strategic products such as CPUs, memory, programmable logic arrays (FPGAs), and digital signal processors (DSPs). Although with the strong support of national science and technology plans such as "nuclear high base", the desktop CPUs and "Loongson" series CPUs developed by Shanghai Zhaoxin have been applied in batches in specific fields, but due to the lack of intellectual property rights, processing capabilities and basic design capabilities, our country enterprises have not yet entered large-scale mass production in the above fields, let alone fully participate in market competition.

Manufacturing is the biggest shortcoming, and the opportunity still exists

For decades, the global semiconductor industry has been obsessed with the miniaturization of transistors. The last time a new method was proposed was in 2009, known as FinFET. In 2012, the first mass production of the FinFET process led to the emergence of 22nm, 14nm, and 10nm processes in the years that followed.

Technological progress is directly changing the competitive landscape of major integrated circuit manufacturing enterprises. Intel said at its "Technology and Manufacturing Day" held in the first half of the year that its 14nm technology has high functional density, better than competitors, manufacturing costs are 30% lower than competitors, and will take measures to ensure that it is far ahead of Samsung in terms of performance and cost. According to public information, semiconductor chip Intel occupies about 80% of the market share of processors in the PC market and more than 90% of the market share in the server chip market, and it still has an unshakable market position in the PC and server chip market.

As a rising star, Samsung continues to seek breakthroughs in the flash memory market, mobile phone chips and other battlefields. The first-generation 10nm chip developed by Samsung has been used in its Galaxy S8 released this year, and the Qualcomm Snapdragon 835 chip is also manufactured by Samsung's existing 10nm factory. In recent years, the development of the PC market has shown signs of stagnation, which has hit Intel, and at the same time, boosted by the increasing demand for mobile phone chips and flash memory in the market, Samsung sold more chips than Intel in the first quarter of 2017.

China's chip manufacturing process is two generations behind its international counterparts, and it is expected that in January 2019, China can complete the manufacturing of 14nm products, and in the same period, foreign countries can complete the manufacturing of 7nm products; production capacity is seriously insufficient, and 50% of chips rely on imports; At the same time, China's production capacity and demand are structurally mismatched, and the products that can actually be produced do not match the market demand; The long-term OEM model leads to a mismatch between design and manufacturing capabilities, and the lack of core technology. Problems such as investment chaos, R&D investment and lack of talents have led to China's integrated circuit industry as a whole, which is still in a state of "core technology is controlled by others and products are in the middle and low end", and cannot be fundamentally changed for a long time.

SMIC is a large-scale and technologically advanced chip foundry in Chinese mainland. SMIC undoubtedly represents the high level of China's semiconductor chip manufacturing technology, but its advanced process is only 28nm, and there is a clear technical gap in the face of Intel's mature 14nm process and the 10nm process that Samsung and GlobalFoundries have put into production, even compared with TSMC's 16nm process. Today, with the release of 5nm new technology, the gap in technical level is still widening, and China's chip manufacturing level needs to be improved urgently.

The reason is that the biggest obstacle in front of China's chip manufacturing industry is not materials, nor technology, but a complete set of lithography machine equipment, and only Japan's Nikon, Canon and the Netherlands' ASML company in the world can master the manufacturing of high-end lithography machines, and the excellent is the Dutch ASML company, whose lithography machine is priced at as high as 100 million US dollars. In contrast, the better domestic lithography machine can only achieve a 90nm process, while Japan's can achieve a process of less than 28 nanometers, and the accuracy of the Netherlands can be as high as 14 nanometers. Then you may ask why China doesn't buy from them, the question is, because high-end chip manufacturing is firmly in the hands of several countries in the United States, Japan and Europe, and they have blocked China's technology and equipment, resulting in China's chip industry not being able to break through so far.

Although the gap between Chinese integrated circuit manufacturing enterprises and foreign and even Taiwanese enterprises does exist, there are also some favorable factors.

First of all, the Chinese government has begun to pay attention to and actively support the development of China's integrated circuit manufacturing industry, and has issued a number of relevant policies and guidelines, the "Made in China 2025" policy document clarifies China's goal of increasing the self-sufficiency rate of integrated circuits to 40% in 2020 and 70% in 2025. The realization of this goal directly requires the improvement of the technical level of semiconductor manufacturing enterprises.

Second, the slowdown in technological development has provided Chinese companies with time to catch up. There is no doubt that the new silicon nanochip transistor technology released by IBM, Samsung, and the GlobalFoundries alliance has laid the foundation for the development of 5nm chips, but with the reduction of the size of the transistor, the channel between the source and the gate is also constantly shortening, when the channel is shortened to a certain extent, the quantum tunneling effect will become extremely easy, in other words, even if there is no voltage, the source and drain can be considered interoperable, then the transistor loses the role of its own switch, Therefore, it is impossible to implement logic circuits. From now on, the 10nm process has been realized, and 5nm can also be realized, while below 5nm is close to the physical limit of the existing semiconductor process. The slowdown in technological development will provide some catch-up time for Chinese companies.

Finally, the world's integrated circuit industry transfer trend provides opportunities for Chinese enterprises. The first industrial transfer in the late 70s of the 20th century was transferred from the United States to Japan, creating the world's top integrated circuit manufacturers such as Fujitsu, Hitachi, Toshiba, and NEC. The second time, in the late 1980s, South Korea and Taiwan became the beneficiaries of this transfer, with manufacturing giants such as Samsung and TSMC rising. At present, with huge market demand and low labor costs, China is likely to relay South Korea and Taiwan to become a key area for industrial transfer in the next five years.

From this point of view, although China's integrated circuit manufacturing industry is backward as a whole, it has advantages in the industrial structure, the government attaches great importance to the support of related industries, the development of new technologies will slow down, and China's integrated circuit manufacturing industry still has the opportunity to change the unfavorable and backward situation.