Fusion innovation promotes supply-side reform of China's integrated circuit industry - 2017 China Semiconductor Market Annual Conference and the 6th China Integrated Circuit Industry Innovation Conference were held in Nanjing today

The "2017 China Semiconductor Market Annual Conference and the 6th China Integrated Circuit Industry Innovation Conference" was held at Agile Yujintian Hotel in Nanjing Jiangbei New District from March 23 to 24, 2017. This annual conference was hosted by China Semiconductor Industry Association, China Electronics Information Industry Development Research Institute (CCID Group) and Nanjing Jiangbei New District Management Committee, and co-organized by CCID Consulting Co., Ltd., Nanjing Economic and Information Commission, and Nanjing High-tech Industrial Development Zone Management Committee.

On the morning of March 23, Song Xianzhu, Party Secretary of China Electronics Information Industry Development Research Institute, attended the conference and delivered a speech. Long Hanbing from the Department of Electronic Information of the Ministry of Industry and Information Technology, Luo Qun, member of the Standing Committee of Nanjing Municipal Party Committee and full-time deputy secretary of Jiangbei New District, Ni Guangnan, academician of the Chinese Academy of Engineering, Wei Shaojun, director of the Institute of Microelectronics of Tsinghua University, and Chen Nanxiang, executive vice chairman of China Resources Microelectronics Co., Ltd., respectively conducted in-depth analysis of my country's semiconductor industry from multiple dimensions such as current national policies, industry status, core issues and future directions. In the afternoon, the CEO Forum brought together senior executives of well-known companies in the semiconductor industry to conduct in-depth discussions on application hotspots, market opportunities, technology trends and industry investment.

The following are the main contents of the conference:

China's integrated circuit industry develops with innovation and integration

Long Hanbing from the Department of Electronic Information of the Ministry of Industry and Information Technology delivered a keynote speech entitled "Innovation, Integration and Development of China's Integrated Circuit Industry". In his speech, he pointed out that the annual China Semiconductor Market Conference has been successfully held for 15 years, witnessing the rapid development of my country's integrated circuit industry in the 15 years since the new century. At the same time, it has also developed into a semiconductor industry event with a certain influence at home and abroad.

Long Hanbing first introduced the development of China's integrated circuit industry in recent years. From 2001 to 2016, my country's integrated circuit industry and market developed rapidly. The market size increased from 126 billion yuan to about 1.2 trillion yuan, accounting for about 60% of the global market share.

At the same time, the industrial structure tends to be reasonable. From 2001 to 2016, the packaging industry, manufacturing industry, and design industry began to advance in parallel, the proportion of design industry and manufacturing industry continued to increase, and the industrial structure tended to be optimized.

The development environment is constantly improving. The National Integrated Circuit Industry Development Promotion Outline has important strategic significance, and various regions have responded. Beijing, Sichuan, Shandong, Anhui, Tianjin and other provinces and cities have successively introduced support policies to promote the development of local industries. The integrated circuit industry has ushered in a great opportunity for a new round of rapid development.

Driven by market demand and supported by national policies, my country's integrated circuit industry has made great progress and has initially established a foundation for participating in international market competition and supporting the development of the information technology industry. With the implementation of national strategies such as "Made in China 2025" and "Internet+" action guidelines, the inherent vitality of the market has been further stimulated, the development environment has been further optimized, and the industry has achieved stable and rapid development.

The core position of the integrated circuit industry is becoming increasingly prominent. Long Hanbing said that China's manufacturing industry is generally large but not strong. The main restrictive factors are the weak independent innovation capabilities, the core technologies and key components such as high-end integrated circuits are controlled by others, and most industries are still at the middle and low end of the value chain.

In the future, China will bring about leapfrog development of the integrated circuit industry through the implementation of the "Made in China 2025" strategy, and promote the realization of the strategic goals of "Made in China 2025" by enhancing the core capabilities of the integrated circuit industry.

New landscape and new challenges

However, we should also see the new patterns and new challenges that emerge in the development of the integrated circuit industry.

The new pattern is mainly reflected in the following aspects. First, the market-driven changes. On the one hand, the traditional PC business has further shrunk, and the demand for smart terminal market has gradually slowed down. In 2016, Intel's net profit fell by 10%, and the mobile businesses of Qualcomm, MediaTek and other companies have declined to varying degrees. On the other hand, the demand for cloud computing, big data, and industrial Internet is forming an explosive growth trend. In recent years, the basic role of the Internet in promoting economic and social development has become increasingly prominent, greatly changing the face of China's economy and society.

Secondly, the change of innovation elements. Relying on single point and single product innovation is shifting to multi-technology and multi-product innovation. The development of cloud computing and big data will lead to changes in computing architecture, which will breed huge changes.

Third, the competition landscape has changed. Long Hanbing pointed out that in 2016, global mergers and acquisitions in the field of integrated circuits were active, with transaction funds exceeding US$120 billion, and strong alliances and cross-border integration have become new trends.

In addition, there are changes in the external environment. The European Strategic Roadmap for Micro- and Nano-electronic Components and Systems recently released by Europe and the US Report to the President: Maintaining the US Leading Position in the Semiconductor Industry indicate that the major developed countries and regions in the world have further strengthened the government's emphasis on the development of the semiconductor industry.

Finally, the transformation of internal and external contradictions. The contradictions faced by China's integrated circuit industry are mainly manifested in the following points: Contradiction 1: the contradiction between the urgent need for leapfrog development of the industry and the insufficient capabilities of key enterprises. Contradiction 2: the contradiction between complex and diverse market demands and relatively single product structure. Contradiction 3: the contradiction between the rapid development of enterprises themselves and the shortage of high-end talent supply. Contradiction 4: the contradiction between active international cooperation and mergers and acquisitions and the increasing industrial supervision of various countries.

So how should China cope with the new situation and challenges and deal with the contradictions? We should do the following:

First, we should pay more attention to open development. While adhering to independent innovation and development, we should strengthen international cooperation, make full use of global technology, talents, markets, funds and other resources, and integrate into the global integrated circuit industry system.

Second, pay more attention to innovative development. Deploy the innovation chain according to the industrial chain and focus on cultivating corporate innovation entities.

Third, we should pay more attention to development. We should concentrate resources, focus on key enterprises, key technology nodes, and major products, organize and implement major national science and technology projects, industrial transformation and upgrading funds, etc., and make breakthroughs in key core technologies and major products.

Fourth, pay more attention to coordinated development. Focusing on major market demands, strengthen the organization and coordination of upstream and downstream resources in the industrial chain, and promote the establishment and improvement of the industrial ecological environment.

Fifth, pay more attention to the rational layout of development and focus on the layout of major productive forces.

Integration and innovation have become the core driving force for the development of China's information industry

Ni Guangnan, an academician of the Chinese Academy of Engineering, emphasized the role of integrated innovation in the development of China's information industry in his speech entitled "Integrated innovation has become the core driving force for the development of my country's information industry."

Ni Guangnan pointed out that integrated innovation is to creatively integrate various innovation elements so that they complement each other, thereby making a qualitative leap in the overall function of the innovation system and forming strong innovation capabilities and core competitiveness.

At present, integrated innovation is mainly reflected in the following areas.

Internet+: The integration of Internet and information technology with other technologies. "Internet+" means "Internet+ various traditional industries", which promotes the deep integration of the Internet and traditional industries and creates a new development ecology.

Industrial Internet: A new stage of integration of information technology and information technology. The Industrial Internet deepens the integration of information industry and traditional industry and is the engine for promoting the implementation of "Made in China 2025".

Military-civilian integration: the integration of national defense economy and social economy, military technology and civilian technology, and military and local talents. Military-civilian integration has two main meanings: one is "military-to-civilian", which means the use of military technology in the civilian sector; the other is "civilian participation in the military", which means the participation of private entities in the military industry market.

In addition, there is also integration of software and hardware and integration of disciplines.

In the field of network and information, China has been striving for decades and relying on independent innovation. At present, the overall level of network and information technology and industry is second only to the United States. In some aspects, we have developed from following to running side by side. In the future, if we can make super deployment and focus on key research, it is possible to achieve the change from following to running side by side to running side by side and leading.

Our biggest hidden danger is that our core technology is controlled by others

In Professor Ni Guangnan's view, being controlled by others in core technologies is our biggest hidden danger. Decades of practice in my country's cybersecurity and informatization field have shown that real core technologies cannot be bought or exchanged in the market. At this stage of China's development, even the more important technologies will not be given to you, let alone core technologies.

Win-win cooperation promotes sustainable development of the integrated circuit industry

In his speech, Chen Nanxiang, Vice Chairman of the China Semiconductor Industry Association and Executive Vice Chairman of China Resources Microelectronics Co., Ltd., first reviewed the domestic and international industrial development in 2016 and affirmed the development of China's integrated circuits.

In 2016, the global semiconductor market size grew slightly to US$338.93 billion, a year-on-year increase of 1.1%.

However, the regional market is polarized. In 2016, the global semiconductor market developed in different regions. Europe and the United States showed a downward trend, with the US market down 4.7% and the European market down 4.5%. Asia showed an upward trend, with Asia Pacific (excluding Japan) growing at 3.6%; Japan's semiconductor market size also saw a 3.8% increase after years of decline.

At the same time, China's integrated circuits also maintained rapid growth. In 2016, my country's semiconductor industry made a good start in the "13th Five-Year Plan" and continued to maintain a high-speed growth trend. According to statistics from the China Semiconductor Industry Association, China's integrated circuit industry sales reached 433.55 billion yuan in 2015, a year-on-year increase of 20.1%.

Development opportunities for China's integrated circuit industry

Chinese integrated circuit companies are actively integrating into the global integrated circuit industry. In the wave of integration of the global integrated circuit industry from 2015 to 2016, there was no shortage of participation from Chinese companies and industrial capital. The China Semiconductor Industry Association played an active role in the activities of the World Semiconductor Council.

当前中国集成电路产业面临着不少挑战，比如，整体实力不足，国内晶圆制造技术落后于世界领先水平达2代以上，集成电路设计业规模占全球的比例不足8%，集成电路产业的结构仍有待优化，缺乏有规模的IDM企业。资本未能有效利用，固定资产投入虽有增加但带来显著的投资分散问题。国际整合受限，参与全球产业资源配置与整合受到限制。

In addition, Chen Nanxiang also emphasized the fact that the current Chinese integrated circuit industry is receiving "excessive attention" in response to the frequent rejection of international mergers and acquisitions projects involving Chinese companies or capital.

Chen Nanxiang believes that in the nearly $200 billion global industrial integration from 2015 to 2016, Chinese companies and Chinese industrial capital successfully participated in less than 6% of the global M&A projects, but they are still labeled with various "labels". The scale and role of the National Integrated Circuit Industry Fund, which operates in a market-oriented and transparent manner, have been seriously distorted by the international media.

In order to deal with this problem, Chen Nanxiang pointed out that the main task of the China Semiconductor Association in 2017 will be to strengthen the organization of the association, strengthen international exchanges and participate in WSC activities, and promote international cooperation and win-win results.

Lu Chaoqun, chairman of the Taiwan Semiconductor Industry Association, briefly introduced the development of Taiwan's semiconductor industry in 2016. In 2016, Taiwan's semiconductor output value reached NT$2.4493 trillion, with an annual growth rate of 8.2%. It is estimated that it will grow by 5.8% in 2017.

Analysis of China's integrated circuit supply-side structure

According to Wei Shaojun, Vice Chairman of the China Semiconductor Industry Association and Director of the Institute of Microelectronics at Tsinghua University,

According to Professor Wei Shaojun, China's integrated circuit industry continued to grow rapidly in 2016. According to statistics from the China Semiconductor Industry Agreement, China's integrated circuit industry sales in 2016 reached 433.55 billion yuan, an increase of 20.1% over the previous year. From the perspective of major industrial chains, each link has achieved rapid growth, and the sales of each link exceeded 100 billion yuan for the first time. In terms of industrial structure, the proportion of chip design and chip manufacturing has gradually increased. The chip manufacturing industry continues to maintain a high-speed growth trend, with the highest growth rate among the three industries. The total scale of the design industry exceeded the packaging and testing industry for the first time, ranking first.

Overview of the development of China's integrated circuit industry in 2016: The chip design industry continued to maintain rapid growth, with sales revenue of the industry reaching 164.43 billion yuan in 2016, up 24.1% from 132.50 billion yuan in 2015, and its share of the global integrated circuit design industry increased to 27.82%.

Many data are based on the data of foreign companies in China. If the data of foreign companies are removed, the data may not be so good.

Professor Wei said that the proportion of China's electronics industry in the world continues to increase. From a global perspective, the Asia-Pacific region continues to grow. However, overall, China's integrated circuit products account for a very small proportion of the world. According to internationally accepted standards, only the output value of the design industry can be included in the sales of products. Therefore, in 2016, China's integrated circuit product sales accounted for only 7.3% of the world.

The import of integrated circuits continued to be high. In 2016, the import value of integrated circuits reached 227.07 billion US dollars, down 1.2% from the previous year, but it has exceeded 200 billion US dollars for four consecutive years, making it the most valuable imported commodity. However, during the same period, the export of integrated circuits was 61.38 billion US dollars, and the cost decreased by 11.1%. The trade deficit was as high as 165.7 billion US dollars. This situation will continue for several years.

In terms of imported integrated circuit products, microprocessors and controllers account for the largest proportion, followed by semiconductor memories and then amplifiers.

But we need to note that among servers and personal computer MPUs in computer systems, and mobile communications and storage in communication equipment, many products have a domestic market share of zero, which means they are not produced.

In other words, the core chips needed by my country mainly rely on imports. In addition, it is worth mentioning that my country's manufacturing capacity is seriously insufficient.

The design industry is also insufficient. For example, it lacks the ability to independently design processes, does not have COT design capabilities, and has insufficient supply of IP cores; the design industry lacks the ability to design key IP cores, and SoC design is heavily dependent on the process resources of third-party IP cores.

In addition, the current situation is that the investment in integrated circuits is a bit messy. Professor Wei pointed out that under the guidance of the Outline, the enthusiasm of large funds and local funds for investment will rise, but there are too many historical debts that are difficult to make up in the short term. In the next five years, the investment demand in the integrated circuit field in mainland China is expected to accumulate to US$100 billion.

Technology and investment balance has not yet been achieved

In other words, the investment in technology R&D is insufficient. Professor Wei pointed out that my country's annual investment in integrated circuit R&D is less than 50% of Intel's R&D investment.

The industrial model needs to be clarified

There is a serious shortage of talent. Talent is the primary resource in the field of integrated circuits. Currently, there are less than 300,000 people working in the field of integrated circuits in my country, but the total output value requires 700,000 people, which means there is a serious shortage of talent.

In addition, the West has also adopted a multi-pronged approach to contain my country.

Finally, Professor Wei Shaojun concluded that the structural defects of China's integrated circuit industry have gradually emerged. The "foundry" model has always dominated the development of China's integrated circuit industry, but whether the development in the next 10-15 years will still be dominated by this model is worth exploring. Now is the time to study the topic of structural changes in the supply side of China's integrated circuits.

The development of China's integrated circuit industry requires strategic judgment, foresight of implementation paths, strategic determination in development, and execution of specific implementation. Innovation capability is the core of China's integrated circuit industry to achieve independent control and sustainable development, and talent is the foundation.

At the CEO Forum on the afternoon of March 23, senior executives from many companies expressed their views and expressed their expectations and visions for the future development of the Chinese market.

Committed to technological innovation and embracing the intelligent world

Luo Zhenqiu, general manager of TSMC (Nanjing) Co., Ltd., said that TSMC has been committed to technological innovation and embracing the intelligent world. In TSMC's view, the semiconductor industry continues to innovate, and technological progress will reshape our lives.

From mobile computing to ubiquitous computing, ubiquitous computing will drive the next wave of growth in semiconductors.

From the evolution of mobile phones, it is not difficult to find that smartphones are making Vaughan's life more convenient.

The evolution of smartphones, high-performance computing, and IoT applications has made us more and more demanding on semiconductor processes. Semiconductor technology makes the world smarter, and as demand continues to expand, low power consumption, high performance, and small area have become the mainstream.

This requirement makes the logic and storage processes more miniaturized due to 3D transistors. The chip structure has also evolved from traditional system packaging or multi-chip components to 3D wafer-level system integration.

In addition, technological innovations applied in ubiquitous computing are introduced.

TSMC's success is inseparable from its philosophy and innovation. TSMC has been committed to transforming the cooperation model in the design ecosystem and striving to promote vertical collaboration in the semiconductor industry chain to reduce design barriers and achieve resource sharing.

A deeper partnership - From concept to production, TSMC's open innovation platform facilitates innovation.

In TSMC's view, semiconductor innovation drives the growth of the information industry and makes the world smarter. In the future, universal computing will drive the next wave of growth in the semiconductor industry. The creative integration of advanced processes, derivative processes, and advanced packaging will drive the advancement of system products. The vertical collaboration of equipment manufacturing, semiconductor manufacturing, design services, and IC design companies has become an element in achieving growth in the semiconductor industry and a smarter world.

Ji Minghua, senior vice president of Semiconductor Manufacturing International Corporation, introduced in his speech the role of SMIC in the industry and some of SMIC's industrial thoughts on IoT applications as China's semiconductor industry grows rapidly.

Ji Minghua said that China ranks first in the world in terms of total semiconductor demand. However, domestically produced chips only account for 30%, and the vast majority are imported. Since 2012, China's electronic product market has developed rapidly, and the demand for semiconductors has also increased rapidly. Under such circumstances, the supply chain has been driven. This situation will continue for another 5-10 years.

Create a brilliant core path under the big pattern

Lei Haibo, President of Shanghai Huali Microelectronics Co., Ltd., said that China's semiconductor industry is developing rapidly, with both opportunities and challenges. To become bigger and stronger, industry scale investment is the foundation, R&D investment is the key, and talent is the basis. Huahong has been committed to creating chips for 20 years, and will not forget its original intention in the future. It will contribute to the development of China's information industry and roll up its sleeves to work hard.

New Trends in IC Packaging

Wang Xinchao, Vice Chairman of the China Semiconductor Industry Association and Chairman of Jiangsu Changdian Technology Co., Ltd., introduced the new trends in IC packaging in his speech.

The development of the packaging market and technology has driven changes in the supply chain model, and the continuous development of the product industry has also continuously put forward new demands on packaging.

Due to the constant demand for high-end technology, the mobile market represented by smartphones has squeezed traditional semiconductor markets such as PCs and consumer products. However, smartphones have also begun to grow sluggishly in the past two years. In Wang Xinchao's view, the mobile phone market will remain the main driver of semiconductor market growth in the next five years - the module packaging required by mobile phones will also grow rapidly. The Internet of Things has penetrated into various fields and is another major driver of market growth. Under the overall situation of the decline of the PC market and the saturation of the mobile phone market, we need to find the next growth point.

The Internet of Things (IoT) is considered to be the fastest growing area in the IC market in the next few years. Mobile phones are still the largest terminal category, but the growth is slow.

IoT architecture and the demand for semiconductor packaging.

One of the trend changes is the rise of SiP. Mobile communications and Internet of Things applications will continue to promote miniaturization and modularization. The characteristics of high-end SiP are very suitable for the technical requirements of these applications.

Trend 2, FO-WLP, the “third wave” of array packaging.

A new production model for wafer-level packaging: Flexline.

Trend 3: The rise of China. As China promotes the development of semiconductors, a strategic industry, all links in China's semiconductor supply chain are growing faster than other regions.

Opportunities and challenges in the development of advanced packaging and testing processes

The direction and challenges of packaging technology innovation and development

Guo Yifan, vice president of ASE Group, believes that the innovative development of advanced packaging technology comes from the continuous advancement of Moore's Law.

The packaging link plays a role in the fabless semiconductor industry chain. The packaging process provides process technology, combines design requirements and cooperates with materials/equipment to participate in innovation.

The future development of semiconductor technology requires systematic design and integrated solutions, and packaging will no longer be an independent link.

Innovative development of packaging technology under the new situation (integrated solution). Seek innovative development of advanced packaging technology in combination with design and materials/equipment fields.

In addition, the "2017 China Semiconductor Market Annual Conference and the Sixth China Integrated Circuit Industry Innovation Conference" also announced the "11th (2016) China Semiconductor Innovation Products and Technology Projects", "2016 China's Top Ten Semiconductor Manufacturing, Design, Packaging and Testing Companies", and "2016 China's Top Ten Semiconductor Power Devices, MEMS, Semiconductor Equipment and Materials Companies".

The list is as follows:

[About reprinting]: Reprinting is limited to full text reprinting and the title and content of the article must be completely retained. No deletion or addition of content is allowed to circumvent the original protection, and the beginning of the article must indicate: Reprinted from the WeChat public account "Semiconductor Industry Observation icbank". Thank you for your cooperation!

【About Call for Papers】: Semiconductor elites are welcome to contribute (including translation and editing). Once accepted, they will be published with your name, and you will be rewarded with a red envelope! Signing a contract to become a column expert will earn you a thousand yuan in manuscript fees! Please indicate "Submission" in the title of your manuscript email, and indicate your name, phone number, unit and position in the manuscript. Welcome to add my personal WeChat account MooreRen001 or send an email to jyzhang@moore.ren

Click to read the original text and join the Moore Elite