Interpretation of the "Made in China 2025" plan: Industry 4.0 drives changes in the semiconductor industry

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Source: CCID Network - China Electronics News Author: Chen Bingxin

The impact of Industry 4.0 on the world is not limited to driving the transformation and upgrading of the manufacturing industry. For the semiconductor industry that provides the underlying technology, since it involves automatic robots, simulators, cloud computing, the Internet of Things, and big data analysis technologies, the transformation of industrial production, storage, logistics, and even product design processes requires the widespread use of microelectronic products such as processors, sensors, and microcontrollers. The new market demand will inevitably promote changes in the technology level of various microelectronic products, and then drive semiconductor companies to make adjustments at the industrial level. While providing market opportunities for the semiconductor industry, it is also reshaping the semiconductor industry.

After the State Council issued the "Made in China 2025 " development plan, a Chinese Industrial 4.0 transformation is also brewing. This is a huge and rare market opportunity. Although China's integrated circuit industry started late and has a significant gap with the international advanced level - although the import value of integrated circuits in 2014 narrowed slightly, it still reached US$ 217.6 billion, Chinese semiconductor companies should still seize this rare time window and make corresponding adjustments at the technical and corporate operation levels, and should not miss the development opportunity.

Infineon: Industry 4.0 is a closed loop

After Germany, the representative of advanced manufacturing, proposed the concept of Industry 4.0 , Industry 4.0 has become a hot word today. Almost everyone talks about industry upgrading and manufacturing transformation . Recently, China Electronics News interviewed Infineon, the largest semiconductor manufacturer in Germany and one of the founding members of Germany's Industry 4.0 . Maurizio Skerlj , senior director of microcontroller business of its industrial and diversified electronic market business unit, said: "For Industry 4.0 , we can understand it as connecting related elements through networking. Not only will production lines and production equipment become more intelligent, but the products being produced and processed will also become intelligent and actively participate in the production and manufacturing process."

In other words, Industry 4.0 should be a closed-loop process. It promotes the intelligent upgrading of industry, not just automation, but more importantly, the upgrading of information technology, that is, through the application of systems such as sensors and machine vision, the collection, response and prediction of big data are formed, and an effective closed loop is formed in the three aspects of product development and manufacturing, product design and manufacturing, and product quality and management system.

"When it comes to Industry 4.0 , people tend to pay attention to the intelligence of factories, but often ignore smart products." Maurizio Skerlj emphasized, " In fact, Industry 4.0 includes two major elements: smart factories and smart products. Smart products are conducive to changes in many fields, including the company's production logistics management, human-computer interaction, and future industrial production process management. Products become smarter and can be located, identified, and communicated at any time. In the production process of smart products, we can implant electronic tags or external sensors in each product. Under the information-physical system architecture, the product can tell the manufacturing process how it should be manufactured, know what steps it has completed and what it should do next, and control which factory it should go to in the next step."

Chips: Solving basic problems such as connection, perception, and cognition

So, how should Industry 4.0, which has such advanced concepts, be implemented ? Undoubtedly, Industry 4.0 is a vision, especially when the development level of China's manufacturing industry varies greatly and many companies have not yet completed the automation stage. However, it is also a gradual process that is being implemented. "This will be a gradual process, and the transformation should go through four stages, namely automation upgrade, information upgrade, Internetization within the factory, and Internetization of the entire industrial chain. " Zhang Cheng, a researcher at Huatai Securities, said. "During the implementation process, we should pay attention to several major factors: more factory automation, deeper horizontal and vertical integration between industries, the transformation from centralized control to distributed intelligent control, and big data analysis." Maurizio Skerlj said.

"Specifically, the overall architecture of Industry 4.0 will be roughly composed of three parts: 'cloud, network, and terminal'. 'Cloud' refers to industrial big data and industrial cloud. Data is collected, reacted to and predicted to form actionable big data. 'Network' refers to the Internet of Things within the factory and the industrial Internet covering the entire industrial chain. 'Terminal' refers to intelligent production equipment such as intelligent machine tools, robots, sensors, machine vision, and intelligent logistics equipment such as AGV and service robots. The intelligent production terminal is the core." Zhang Cheng said.

Specific to the products, it involves industrial sensors, microcontrollers, electronic tags, and efficient power devices. Specifically, high-precision industrial sensors are the key to capturing effective data in the Industry 4.0 environment. After collecting meaningful data, high-performance microcontroller products analyze and calculate the data, thereby issuing instructions to intelligently control production. The microcontroller then conveys the instructions to the power semiconductor to ensure energy-efficient production. In addition, in the entire production process, data security and equipment anti -counterfeiting are carried out throughout . Security chips can provide protection for data and information security of intelligent production."

Technology trends: emerging under new demands

The construction of such a "cloud-network-end" system structure under the Industrial 4.0 environment will undoubtedly form new and higher requirements for the underlying semiconductor technology. In summary, there are roughly several important trends. First, the construction of industrial Ethernet requires communication chips that support multiple protocols. "Industrial Ethernet, interconnection, real-time control, and then safety and energy saving will be the core technology of smart factories." Wang Junfeng, deputy director of the integrated marketing department of Renesas Electronics General Solution Center, said in an interview with a reporter from China Electronics News. Specifically, it includes M2M, which realizes self-disciplined and coordinated operation through the networking of production equipment , the application of big data obtained through the network, and the coordination between business management systems such as development, sales, ERP , PLM , SCM and actual production processes. Because modern smart factories have four key points: one is to connect all networks to get data ; the second is to have smart machines ; the third is big data. After connecting all devices and all people, all data is transmitted to the smart terminal in large quantities ; the fourth is analysis. After obtaining the data, the corresponding trends are captured from it to improve the detection and prediction of equipment status. To ensure the realization of the above points, Wang Junfeng believes: " High-speed transmission, big data, real-time security and energy saving are all very important. This is the essence of the construction of industrial Ethernet." However, different manufacturers support different industrial Ethernet standards, including PROFINET (RT/IRT) , EtherCAT , CC-Link IE , DeviceNet , EtherNet/IP , Modbus TCP , CANopen , etc. "This requires the development of communication chips that support multiple protocols at the same time. Of course, the development process needs to consider the implementation of Ethernet protocols , application development, hardware development, consistency testing, etc. It takes a long time from development to mass production." Wang Junfeng said.

Secondly, end-level intelligent machine tools, robots, etc. require the support of high-performance, low-power, and secure chip products. "This has always been the direction that semiconductor manufacturers are committed to," said Wang Yijing, senior manager of Infineon's Industrial and Diversified Market. "In Industry 4.0 , system security and information security in a highly intelligent environment are the basic bottom line for the development of the Internet of Things. In particular, the greater the amount of sensitive data in the Internet of Things environment, the greater the risk, such as data, ID , IP being stolen, data being forged or tampered with, and equipment, servers, and networks being maliciously manipulated. Therefore, security plays a key role in the implementation of Industry 4.0 ."

Finally, high integration is also a prerequisite for coping with the Industrial 4.0 era. For example, more and more semiconductor suppliers are beginning to integrate MCUs with sensors. In industrial automatic control systems, sensors are at the top of the system. Sensors similar to sensory systems can quickly and accurately obtain information and withstand the test of harsh environments, which is the guarantee for the automatic control system to reach a high level. It can be said that without a large number of high-quality and low-cost industrial sensors, there would be no modern industrial production system, let alone the construction of the Industrial 4.0 system. In addition, wireless sensor networks with low energy consumption, low cost, easy to use and ubiquitous perception are rapidly emerging, making it possible to measure some important industrial process parameters that have not been online detected in traditional practices due to factors such as cost. " Sensor networks are an important part of the Internet of Things. MCU, as the core device of system control, needs to collect data from sensors such as accelerometers, gyroscopes, magnetometers, thermometers and hygrometers and analyze and process them. The MEMS process used by sensors is different from the MCU process. The SOC integration of the two has certain challenges in semiconductor technology, but it does not prevent the two from being widely used as independent modules in the Internet of Things. " said Jin Guangyi, product manager of GigaDevice.

Industrial transformation: Is the international M&A boom related to it ?

In response to the above technological trends, semiconductor companies are bound to make a series of new adjustments in their corporate architecture to adapt to the new market situation. Infineon has proposed a business philosophy from product to system. "The traditional fundamental concept of semiconductor companies is to make chips smaller and smaller so that the performance is getting better and better and the cost is getting lower and lower. This has always been the innovation pursued by semiconductor companies. However, our target market is undergoing a new change. We need to have a deep understanding of our customers' products, applications and markets, and then based on this understanding, provide customers with the most cost-effective products and solutions to help our customers achieve greater success. At the same time, we carry out more product research and development in response to the current and future needs of the market. We call this concept and action "from product to system". The purpose of this action step is to ensure that we can also continue to innovate, thereby widening the gap between ourselves and our peers and consolidating our position as a market leader." Maurizio Skerlj said.

The second important change is that with the continuous development and integration of technology, the rapid changes in market demand and the increasing homogeneity of products from various manufacturers, it is difficult to win competitive advantages with products alone, and high value-added overall solutions must be provided for different applications. Overall solutions that meet the needs of different customers have become the main means of competition for various semiconductor manufacturers, including competition in the industrial field. Since the first half of this year, there has been a wave of mergers and acquisitions in the international semiconductor industry. Intel spent $ 16.7 billion in cash to acquire ALTERA , Broadcom announced that it agreed to the acquisition offer of Avago Technologies, and NXP acquired Freescale. One of the important purposes behind this is to enrich product lines and provide customers with more complete solutions.

The third change is that the construction of the ecosystem has become the focus of competition. The semiconductor industry has entered an era of diversified and comprehensive commercial competition, expanding from simple product competition to competition between industrial ecosystems. Competition in the semiconductor industry is no longer just about technology, but about who can build a complete industrial ecosystem.

These trends are beyond the reach of small-scale semiconductor companies. The semiconductor industry is becoming more and more mature and concentrated. “The bigger the better” is becoming more and more common.

Compared with the development trend of the international semiconductor industry, China's integrated circuit industry started late, and there are problems such as small enterprise scale, weak continuous innovation ability, and lack of core technology. However, the introduction of the concept of Industry 4.0 and the implementation of the "Made in China 2025 " plan by the state have presented challenges to Chinese semiconductor companies while also showing huge opportunities. Chinese semiconductor companies should adapt to market demand and industry development trends and make corresponding adjustments.

"From the perspective of national security, only by achieving the localization of underlying integrated circuits can our country's information security be effectively guaranteed. Therefore, in the "Made in China 2025 " issued by the State Council, integrated circuits are placed at the top of the development of the new generation of information technology industry. With the arrival of the golden period of development of China's semiconductor industry, the scale of key enterprises has maintained rapid growth. This will be a huge and rare market. The Chinese semiconductor industry should seize this time window and should not miss it." Xu Xiaotian, executive vice president and secretary general of the China Semiconductor Industry Association, said.

Yu Xiekang, vice chairman and secretary general of the Integrated Circuit Branch of the China Semiconductor Industry Association, believes that "the global integrated circuit industry has entered an era of oligopoly competition, and mergers and reorganizations of integrated circuit companies at home and abroad are surging. If domestic integrated circuit companies want to become bigger and stronger and keep up with the pace, they cannot rely on closed-door research and development. To keep up with market demand trends, mergers and reorganizations are an important means."

Lu Shan, director of the Software and Integrated Circuit Promotion Center of the Ministry of Industry and Information Technology, believes that we should strengthen the construction of platforms and ecological systems, and accelerate the Internetization of industrial enterprises, the intelligence of products, and the ecologicalization of industries by integrating and applying new-generation information technologies such as industrial software, mobile Internet, cloud computing, and big data, thereby reconstructing traditional manufacturing.

To improve the low self-production rate, the big fund will continue to acquire global IC design companies

Source: Digitimes Publisher: Digitimes

Popularity 11 votes [ 7 comments in total] [ I want to comment] Time : August 31 , 2015 12:52

Since the establishment of the semiconductor industry investment fund ( hereinafter referred to as the Big Fund ) with a capital scale of RMB 136 billion by the mainland central government in the fourth quarter of 2014 , the investment trend of the Big Fund has been highly valued by global semiconductor-related industries. With the support of the Big Fund, DIGITIMES Research expects that during the 13th Five-Year Plan period, the advanced process and special process capacity of the mainland IC manufacturing industry will be opened up in large quantities.

The investment model of the Big Fund can be divided into direct investment, authorization and cooperation, mergers and acquisitions, and the establishment of a guidance fund. Among them, the targets of the Big Fund's direct investment are mostly leading local IC companies or their related companies, including SMIC, SMIC North, and AMEC, all of which are direct investment targets of the Big Fund.

Mergers and acquisitions will be the most important way for the Big Fund to support the mainland IC design industry. Only through mergers and acquisitions can the mainland IC design industry have the opportunity to obtain technology and market at the fastest speed. At the same time, through mergers and acquisitions, the problem of the mainland IC domestic demand market's dependence on imports and low self-production rate can be effectively improved. DIGITIMES Rearch predicts that during the 13th Five-Year Plan period, the number of cases of the Big Fund acquiring global IC design companies will continue to increase.

However, the Big Fund has a national strategic mission, and some of the Big Fund's investment targets and investment amounts are classified as confidential. Therefore, the Big Fund will also combine the funds of the investment company and make investments and acquisitions in the name of the investment company. DIGITIMES Research also speculates that Uphill , led by Wu Yuefeng, proposed to acquire ISSI , and the capital group led by Qingxin Huachuang successfully acquired Omnivision , and part of the funds were also supported by the Big Fund.

Source: CCID Network - China Electronics News

Author: Chen Bingxin

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