Integrated circuit "Lack of core and soullessness" has caused fatal weaknesses and policy funds to double drive the speed of the industry.

Not long ago, Huawei Hass released the world’s first 10-nanometer AI chip. At the same time, the domestic third-generation Beidou chip achieves sub-meter positioning accuracy and chip-level security encryption. Previously, supercomputers equipped with home-made chips have won three consecutive titles in the world's super-computing field. These latest innovations highlight the tremendous progress China has made in catching up with the world advanced level in the integrated circuit field in recent years.

The fatal weakness of the "coreless soul"

A few years ago, the overall scale of China's telecommunications network, Internet, and electronic information manufacturing industry had ranked first in the world. However, the contradiction between large industries but not strong ones was prominent. The biggest weakness was the lack of core and soul. The "core" refers to the integrated circuit. For many years in a row, China’s chip imports have exceeded imports of petroleum and have become the largest importer of goods. The total amount spent each year exceeds US$200 billion. According to estimates of the National Strategic Committee for Manufacturing Powerful Countries, China's integrated circuit market accounted for one-third of the world in 2015, but more than 95% of the supply of products comes from foreign companies.

The integrated circuit industry is a strategic, basic, and leading industry. It is an important support for the development of the digital economy and has a prominent position in the field of information technology. At present, all countries in the world, especially the developed countries, are eager to seize the strategic commanding height of the integrated circuit industry. General Secretary Xi Jinping emphasized many times: "The core technology is subject to human beings is our biggest hidden danger. Even if an Internet company is even bigger and its market value is higher, if the core components are heavily dependent on foreign countries, the "Gate of Life" of the supply chain is in the hands of others. It's like building a house on the wall of someone else's wall. If it's big and beautiful, it may not withstand ups and downs, or even be overwhelming." "We must firmly grasp the core technology independent innovation this 'nose nose', and quickly break through the development of the network. Leading-edge technologies and key core technologies that are internationally competitive have accelerated the development of domestically-controlled alternative plans and built a safe and controllable information technology system."

In order to implement the spirit of the important instructions of the General Secretary of the Internship and speed up the revitalization of China’s integrated circuit industry, in June 2014, the State Council issued a new programmatic document “Outline for Promoting the Development of the National Integrated Circuit Industry” and proposed the realization of integrated circuits in China in a relatively short period of time. The strategic goal of leapfrog development of the industry. Followed by the establishment of the "big funds" jointly funded by 15 companies including Guokai Finance, China Tobacco, and China Mobile, it mainly provides financial support for key links such as design, packaging and testing, and wafer manufacturing in the chip industry chain. The initial size of the "large fund" is 120 billion yuan, and the actual fund-raising is close to 140 billion yuan. At the same time, the total scale of integrated circuit development funds established by local governments at various levels exceeded 200 billion yuan. Statistics show that in the next 10 years, China's total investment in integrated circuits is expected to exceed 100 billion yuan.

Policy funds double drive the speed of the industry

After the establishment of the “big fund,” it has invested heavily in a number of leading companies in the domestic chip field, including Ziguang, SMIC, ZTE, and Changjiang Electronics. By the end of 2016, the National Integrated Circuit Industry Investment Fund had made 40 investments, and the committed investment amount had also approached 70 billion yuan, of which about 60% was invested in semiconductor manufacturing. Under the dual drive of policies and funds, the pace of development of China's integrated circuit industry has accelerated significantly. According to statistics from the China Semiconductor Industry Association, sales of China's integrated circuit industry reached 433.55 billion yuan in 2016, a year-on-year increase of 20.1%. Among them, the high-end chip design industry in the industry chain continued to maintain rapid growth, with sales of 164.43 billion yuan, a year-on-year increase of 24.1%. Ziguang and Hass rank among the top ten chip design companies in the world, and among the top 50 global chip design companies, Chinese companies have 11 seats. Taking Spreadtrum as an example, its mobile phone tablet shipments exceeded 600 million units in the past year, accounting for 40% of the total global mobile phone chip shipments; Huawei also successfully used a large number of Hass Kirin chips in high-end models. , no longer subject to people.

As the "seed player" of China's integrated circuit industry, Ziguang's Spreadtrum and RDA have become the key supporters of "big funds." Its parent company, Ziguang Group, received a total investment of RMB 30 billion from the National Integrated Circuit Industrial Investment Fund and the China Development Bank in February 2015, and received another RMB 150 billion in investment and financing support in March 2016. This helped Ziguang fully use its capital levers in recent years. The frequent attacks on asset mergers and acquisitions have caused great concern in the global scientific and technological community. Ziguang Group once said two years ago that it will surpass MediaTek in five years and become the world's second-largest IC company and the first company in terms of shipment volume. It is reported that Spreadtrum has formed a team of hundreds of people to accelerate the research and development of 5G chips, and will soon launch chips in the second half of 2018, and is determined to achieve a greater breakthrough in the 5G era. At this year's Global Partners Conference held in Shenzhen, Spreadtrum’s CEO Li Liyou revealed that last year Spreadtrum invested 40% of its operating revenue in R&D, and its technological capabilities have increased by leaps and bounds.

With the initial investment in place, China's integrated circuit industry is currently entering a golden period of development. In addition to the design field, the field of packaging and testing is also moving forward. Changjiang Electronics has acquired the world's fourth-listed enterprise, Singapore Starcoop, for 780 million yuan, and has also received strong support from the "big fund." After the acquisition, Changjiang Electronics Co., Ltd. jumped in one fell swoop to become the world's third-largest maker of packaging and testing.

This is also true in wafer manufacturing. In March 2016, the “large fund” participated in a national memory base with a total investment of approximately 160 billion yuan in Wuhan. Four months later, the “Yangtze River Storage” group was formally established. The main product of the Yangtze River storage is the current hottest 3D flash memory. It will use the chip manufacturing process as a breakthrough to integrate memory product design, technology research and development, wafer production and testing, and sales. It is estimated that by 2020, the monthly production capacity will be 300,000. The scale of production will reach 1 million pieces per month by 2030.

"Since the establishment of the IC Fund in 2014, China has spent a great deal of money to build a strong chip country. This road is getting closer and closer, the ideals are getting closer. We have reason to believe that China's ambition in the field of independent chip industry will eventually come true. The words of Ding Wenwu, president of the National Integrated Circuit Industry Investment Fund Co., Ltd., showed firm confidence in China's chip industry.