Has China's chip industry entered a winner-takes-all era?

Latest update time：2021-09-15

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Judging from the development trajectory of foreign semiconductor companies, the phenomenon of winners taking all in the semiconductor industry is not uncommon. Intel in the CPU field, Nvidia in the GPU field, TSMC, the unrivaled foundry, Arm, the mobile processor IP manufacturer, and the three giants of EDA design software have all demonstrated their strength. Of course, in addition to these main businesses, the development of these companies in other fields is also remarkable. In recent years, China's semiconductor development has been very fast, and many leading companies in subdivided industries have been born. These large chip companies have the potential to develop like foreign companies. On the basis of their main business, they continue to extend their tentacles and expand. Through acquisitions, intensive cultivation, and product diversification, they are gradually developing on the road to platform-based, comprehensive large enterprises. A situation where the strong always get stronger has begun to unfold in China.

Storage and computing + simulation, GigaDevice's competitiveness is highlighted

GigaDevice has developed rapidly in recent years, extending its reach from the initial flash memory and MCU to a diversified product layout of MCU, storage, sensors, and analog chips.

From the initial NOR Flash and NAND Flash to the current production of its own DRAM, GigaDevice has gradually completed its entire storage product line. According to a report by Web-Feet Research, in the 2020 Serial NOR Flash market sales ranking, the company's market share reached 17.8%.

Its MCU products are mainly based on the ARM Cortex-M series of 32-bit general-purpose MCU products. In August 2019, it also launched the world's first 32-bit general-purpose MCU product based on the RISC-V core. GD32 has also established its brand and become a mainstream product in China's 32-bit general-purpose MCU field. It is understood that there are now 360 products in 28 series. According to the IHS Markit report, in the Chinese Arm Cortex-M MCU market, GigaDevice ranked third in sales in 2018, with a market share of 9.4%. The top two are STMicroelectronics and NXP Semiconductors.

In May 2019, GigaDevice entered the sensor field through the acquisition of Shanghai Silead. According to CCID data, in 2018, the company's sensor business (Silead) had a global market share of 11.40% in touch chips, ranking fourth; the global market share of fingerprint chips was 9.40%, ranking third, with Goodix Technology and FPC ranking first and second respectively.

In recent years, GigaDevice has also opened up new fronts in the DRAM business. According to them, in recent years, with the vigorous development of various consumer electronic applications such as life entertainment, car audio and video, network communications, and smart homes, the demand for DRAM with DDR4 interface has risen rapidly. In the future, the birth of more emerging applications and products will further drive the market demand for DDR4. For this reason, in June this year, GigaDevice successfully launched the 4Gb DDR4 GDQ2BFAA series of products, which are aimed at set-top boxes, TVs, surveillance, network communications, tablets, smart homes, car audio and video systems and many other fields, fully meeting the mainstream demand for consumer electronic products.

Now, GigaDevice is expanding its application in the IoT field, targeting the billion-level TWS market. GigaDevice has set its sights on the power management chip, a subdivision of analog chips. Although it is a new field, the performance of its chips is not inferior at all. It is reported that GigaDevice's new power management chip GD30WS8805 series has achieved further breakthroughs in high efficiency and high integration, integrating six major functions such as charging, discharging, communication, protection, headphone detection, and LDO. Many indicators are in the leading position in the industry. With its high integration, GigaDevice's power management chip GD30WS8805 has gained wide attention from TWS industry customers, and some leading industry customers have begun to import and achieve mass production.

Companies like GigaDevice that have multiple product categories have their advantages fully demonstrated. Specifically, its latest power chip can be paired with the industry's mainstream Arm® Cortex®-M23 series GD32E230 series entry-level MCU, thereby providing a complete TWS headset charging case power management solution. GigaDevice 's "digital + analog" strategy is bound to capture a wave of OEM and ODM manufacturers downstream of the industry chain who prefer one-stop power management solutions, because such solutions can not only reduce R&D costs, but also accelerate product time to market.

GigaDevice launches GD32E230F-TWS solution

However, not every original manufacturer can provide this kind of packaged solution, and it is also a test of the original manufacturer's R&D capabilities. But this move will undoubtedly be a blow to small companies in the field of power chips. If the product performance of their power chips can be as good as or better than that of small companies, and with the support of MCU, they will definitely take some market share. According to statistics, among the top 60 power chip manufacturers, the number of Chinese companies exceeds 30, which shows the degree of competition in the field of power chips.

Through acquisitions, Weier shares have expanded in depth and breadth.

Since its establishment in 2007, Will Semiconductor has been engaged in the design and distribution of semiconductor products. Since then, the business scope has continued to expand through acquisitions. In August 2019, it acquired Beijing OmniVision Technologies and Sipix; in April 2020, it acquired the Asia-based single-chip liquid crystal touch and display driver integrated chip (TDDI) business from Synaptics Incorporated to lay out the under-screen optical business. By 2020, the company's semiconductor design business revenue accounted for 87.42% of its main business. Semiconductor products include image sensors, touch and display driver integrated chips and semiconductor device products.

It is worth mentioning that with the two major businesses of CIS and TDDI, under the synergy of the two, Will Semiconductor is expected to continue to make breakthroughs in under-screen optics and launch under-screen optics integration solutions. In addition, Will Semiconductor's design business and distribution business go hand in hand. The distribution business is mainly technology distribution, and the scale of the distribution business ranks among the top in the industry, which can further highlight the company's platform advantages. In the future, Will Semiconductor will have the opportunity to become a leading platform semiconductor company.

In terms of segmentation, image sensor products include CMOS image sensor chips, silicon-based liquid crystal projection display chips (LCOS), micro-imaging module packaging (Camera Cube Chip), and application-specific integrated circuit products (ASIC). Among them, CMOS image sensor chip product models cover various specifications such as 80,000 pixels to 64 million pixels. Subsidiary OmniVision Technologies has long been one of the world's three leading image sensor suppliers.

Semiconductor device products mainly include discrete devices (including TVS, MOSFET, Schottky diode, etc.), power management IC (Charger, LDO, Switch, DC-DC, LED backlight driver, etc.), RF devices and IC, MEMS microphone sensor and other product lines, and have cooperated with the supply chain of well-known domestic mobile phone brands. Will shares have domestic leading strength in TDDI, analog, RF and other fields.

Will Semiconductor, which has always been operating in a fabless mode, started working on the "wafer testing and wafer reconstruction production line" project as early as 2018 in order to achieve independent control of the industrial chain. The project began in December 2019, with an estimated construction period of 30 months. In July this year, the company announced that after the project change, the wafer testing and wafer reconstruction production line (Phase II) will achieve an additional 12-inch wafer test volume of 420,000 pieces/year and 12-inch wafer reconstruction volume of 360,000 pieces/year. After the project reaches full production, it is expected to achieve an average annual sales revenue of 741.8981 million yuan and an average annual net profit of 205.1649 million yuan. As of June 30, 2021, the company has partially completed the project. According to the adjusted investment plan, the company will add 180,000 pieces/year of 12-inch wafer testing capacity and 12-inch wafer reconstruction capacity.

At the same time, part of the raised funds will be used for the "wafer color filter and micro-lens packaging project", "high-performance image sensor chip test expansion project" and "silicon-based liquid crystal projection display chip packaging and testing expansion project". The construction of these new projects will enable Will shares to have the production capacity of wafer color filter and micro-lens packaging, and can further control the company's product costs and production cycle, ensure the company's supply chain security, and enhance the company's overall competitiveness.

Goodix Technology's products are not only fingerprint chips, but also

Goodix Technology, which previously made its fortune with fixed-line chips, has achieved great success after entering the capacitive fingerprint chip market. It has taken the lead in the field of optical fingerprint chips and has occupied an absolute market share. In order to cope with the weak demand in a single track, Goodix Technology is currently in the transition period from a single product to diversified products, and is on the road to becoming a comprehensive IC design company. Based on its success and accumulation in the field of fingerprint chips, Goodix Technology has begun to be confident in its continued high R&D investment and the company's future. In recent years, it has gradually accumulated strong technical experience in the fields of biometrics, human-computer interaction, sensors, etc., and has begun to expand into the field of automotive electronics.

In February 2020, Goodix completed the delivery and integration of NXP's voice and audio application solutions business, enriching the company's product line of acoustic business and enabling the company to have a comprehensive technical layout in the three sensing fields of sound, light and electricity; in August 2020, the acquisition of Germany's Dream Chip Technologies GmbH (DCT) enabled the company to have the world's leading visual processing technology and automotive-grade SoC design capabilities.

In terms of biometric products, Goodix Technology has made a number of under-screen optical fingerprint technologies standard for mobile phones. For example, lens-type under-screen optical fingerprints have gradually become standard for OLED screen smartphones; ultra-thin under-screen optical fingerprints will continue to be the preferred solution for flagship models in the future. In addition, capacitive fingerprints are gradually leading the market and becoming a standard feature of smartphones. The market share of side capacitive fingerprints is expanding rapidly. PC fingerprint solutions are popular with Windows business notebook customers and are widely used by international brands such as Dell and ThinkPad.

Human-computer interaction products are mainly used in mobile phones, PCs, tablets, and in-vehicle fields. In the field of mobile phone touch, AMOLED touch solutions continue to be applied by mainstream terminal brands, with more than 20 commercial models in 2020; OLED soft screen touch technology has made a major breakthrough, and the touch solution supporting YOCTA soft screen has been commercialized on a large scale for the first time on the flagship models of leading customers. In the field of PC and tablet touch, a new generation of large-size touch products has been successfully developed, and cooperative relationships have been established with Lenovo and other more domestic and foreign customers; the touchpad business has grown rapidly; in the field of in-vehicle, the market share of automotive-grade touch products continues to increase, and they are widely used in mainstream models of many car manufacturers, and the cumulative shipments of automotive-grade touch chips are nearly one million pieces.

Goodix also provides innovative voice, audio and tactile solutions to smart terminals and automobile manufacturers. Smart audio amplifier products continue to maintain their leading position in the global shipment of Android products. The acquisition and integration of NXP's VAS business has also laid a solid foundation for this part of the business.

In the IoT field, many of Goodix's products have been commercialized on a large scale, among which the annual shipment of health series sensors exceeds 10 million pieces. The shipment of in-ear detection and touch two-in-one chips in the TWS headset market also exceeds 10 million pieces, and has been applied to national customers including head customers. The company's first active noise reduction audio codec chip (ANC Codec) has been commercialized on a large scale in the flagship TWS headsets of top domestic customers, and shipments have exceeded one million. BLE Bluetooth products are used in smart bracelets/watches, active pens and other products, and shipments on the client side exceed one million pieces.

According to reports, Goodix launched the GR551x series of BLE products in 2019. With its ultra-low power consumption, graphics driving capabilities and high-speed RF features, this series of products has been highly favored by customers in the wearable market and has been fully commercialized in smart bracelets/watches, active pens and other products. The shipment volume in the first half of the year increased nearly 5 times compared with the same period last year. In the market, it has established strategic partnerships with many well-known ODM customers and successfully entered the supply chain of first-tier terminal brands.

This year, Goodix will launch the new GR552X series. Judging from the market feedback, this series of products is bound to create new waves in the BLE SoC field.

The breakthrough of RF leader Zhuoshengwei

Zhuoshengwei started with mobile TV chips, and later turned to mobile RF front-end chips such as RF switches and LNA. With a small RF switch, Zhuoshengwei's market value reached a peak of 150 billion. To quote Master Zhong Lin, "There is no second place in domestic RF switches after Zhuoshengwei."

Zhuoshengwei only involved in the discrete RF switch and discrete RF low noise amplifier markets in the early days. In recent years, it has been working hard in the RF field. Now its products can fully cover the FEM module, discrete conduction switch, discrete RF low noise amplifier, antenna switch and WiFi connection module markets. In the field of RF switch and RF low noise amplifier, Zhuoshengwei has initially formed the ability to compete with world-class companies. At the same time, Zhuoshengwei has also reached the international leading technology level in antenna switch and high-performance low noise amplifier products.

Zhuoshengwei believes that the modularization of RF front-end is the trend of industrial development. RF module integrates two or more discrete devices with functions such as RF switch, low noise amplifier, filter, duplexer, power amplifier, etc. into one module, so as to improve the integration and performance and miniaturize the volume. The company's WiFi 5 FEM (WiFi connection module, integrating WiFi RF power amplifier, RF switch, low noise amplifier and other combinations) products have been mass-produced at the client end, and WiFi 6 connection module products have begun to be sent to customers.

Zhuoshengwei is also aware that with the gradual popularization and application of 5G communication technology, a series of new demands and challenges for RF front-end chips will be generated. If it wants to go further in the field of RF, more difficult and higher-order RF filters are the only way. Therefore, Zhuoshengwei has adopted the method of private placement to deploy high-end filter chip and module industrialization projects to form a complete product matrix.

In addition to the RF field, Zhuoshengwei has also begun to expand into the field of the Internet of Things. At present, the company has begun to provide low-power Bluetooth microcontroller chips to the outside world, extending its tentacles to electronic products such as smart homes and wearable devices. According to Zhuoshengwei, the low-power Bluetooth microcontroller chip integrates the BLE RF transceiver, memory, CPU and related peripherals into one chip to form a microcontroller with the function of transmitting and receiving Bluetooth RF signals.

Zhuoshengwei's main product categories

Conclusion

The above companies are just representatives of the "winner takes all" in China's semiconductor field. In my opinion, in the future, the expansion of leading companies will undoubtedly bring more severe challenges to small chip companies in the same track. China's chip industry now has many companies competing in almost every track. It is more difficult for small chip companies to survive, and the elimination of companies has never stopped. But no matter who it is, they are small companies at the beginning. Only those who break through the siege in this mighty and competitive environment can become the final winner.

*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.

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