Securities analysts Chen Guo and Xia Fanjie and others said in the report that domestic semiconductor consumption is large, accounting for one-third of the world, but China’s huge chip market has been dominated by overseas semiconductor giants, if China cannot If the realm is independent, then the national strategy, security, and economic interests will all be threatened.
However, it is optimistic that, from the past two semiconductor industry transfer point of view, China now has the conditions to become the new industry hegemony, the future of the semiconductor industry ushered in great development can look forward to.
Domestic industry pain points
In the report, Essence Securities stated that since the second quarter of 2016, DRAM memory chips have taken the lead in price increases. Demand from consumer electronics, automotive electronics, etc., and a favorable industry structure have made the entire semiconductor industry ushered in a wave of continuation. The high boom.
In the domestic market, China's semiconductor consumption has accounted for one-third of the world's total in 2016, and China's IC industry sales were 433.55 billion yuan, a year-on-year increase of 20.1%. The huge Chinese market has become the “next big cake†that the global electronics companies in the semiconductor industry are trying to share.
The report writes that China’s huge chip market has been dominated by overseas semiconductor giants, and they have almost monopolized all mainstream chip areas. Therefore, China has to import more than 200 billion U.S. dollars worth of chips from overseas every year, which is about double the amount of oil imported in 2016.
More worrying than the huge cost of chip imports, the chip relied heavily on the national information security and national strategic pressures brought about by Western developed countries. According to the report, a typical example is the sanctions imposed by the U.S. Department of Commerce on ZTE in 2013. ZTE subsequently settled with the U.S. Department of Commerce and paid a fine of approximately 890 million U.S. dollars.
The report believes that if China cannot achieve independence on the chip, it can be expected that similar incidents will continue to occur in the future and continue to undermine national strategic, security, and economic interests.
The third industrial transfer opportunity
The Essence Securities Report believes that in this context, China has now embraced the third opportunity for industrial transfer and is expected to become the new king.
According to the report, the first two rounds of transfer in the semiconductor industry are:
The first industrial transfer (US to Japan): mainly the assembly industry of the United States moved to Japan, and Japan, through the combination of technological innovation and the home appliance industry, consolidated the position of the Japanese home appliance industry and seized the rise of the PC industry in the 1980s. With the accumulation in the field of home appliances, mass production of DRAM is rapidly realized.
The second industrial transfer (Japan to Korea, Taiwan): It was due to the economic bubble of Japan in the 1990s. It is difficult for Japan to continue to support the DRAM technology upgrade and fab construction fund demand. At this time, South Korea seized the opportunity to continue its investment in DRAM under the financial support of large consortiums, established the leading position of PC, and seized the mobile phone market, and finally established it. Chip dominance in the market. Taiwan, on the other hand, used IDM to separate Fabless and Foundry and worked hard to develop Foundry. This resulted in the second transfer of semiconductors, namely, the United States and Japan to South Korea and Taiwan.
From the perspective of these two industrial changes, the report believes that the emergence of new semiconductor dominance must meet two conditions: application carriers with new technologies, such as Japan's round of home appliances, South Korea, Taiwan's round of computers, mobile phones, etc.; must have With strong financial support, we must be able to tolerate financial pressures and continue to invest heavily in the early stages. Looking at the current situation, China has exactly these two conditions.
First of all, in the upgrading of the new generation of smart phones with iPhone X as the wind vane, the chip market will meet a huge demand. At the same time, new technologies such as automotive electronics, AR/VR, and artificial intelligence will also open the next chip blue ocean market.
Second, the support of national policies is an effective guarantee for promoting the development of the semiconductor industry. On September 24, 2014, the State Integrated Circuit Industrial Investment Fund was established. As of 2016, the major funds have already decided to invest 43 projects covering the entire chip industrial chain. The cumulative project investment amounted to 81.8 billion yuan, and the actual investment exceeded 56 billion yuan. At present, the benefits of investment in industrial funds are beginning to emerge, and the second-phase funds will be ready for launch, which is expected to be launched in 2018, and the total funds will be close to 200 billion yuan.
The report also stated that "Made in China 2025" also proposed that China's chip self-sufficiency rate will reach 40% by 2020 and reach 70% by 2025. However, the current domestic self-sufficiency rate is still about 10%, so the next few years, semiconductors will welcome Great development
Therefore, the report concludes that the domestic demand is huge, the government strongly supports it, and the technology gradually matures. The Chinese chip industry is experiencing a wave of import substitution. In the third industrial transfer of the semiconductor industry that has already arrived, China will become the biggest beneficiary.
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