Foundry and EDA manufacturers talk about IoT: The semiconductor industry may undergo a major change

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As an emerging industry with high hopes, the Internet of Things (IoT) includes hot areas such as wearable devices, smart homes, smart cars, medical care, and industry. Although there has been much hype before, and the discussion is still focused on the upstream of the industry chain, there are signs that 2015 may be the year of the IoT industry's explosion. Semiconductor manufacturers including EDA, Foundry, and Fabless have launched targeted processes and technologies for the IoT field.

IoT does not pursue advanced technology, ultra-low power consumption is more important

Targeting the IoT market, TSMC has introduced an ultra-low power consumption process. Luo Zhenqiu, vice general manager of business development at TSMC China, said that in addition to the low power consumption process, TSMC is also working on advanced packaging to further reduce the size. Highly integrated processes can further reduce costs. "Whether it is EDA or design packaging, this industry is moving forward." He said that the reason why wearable products have a "3-month" effect is because the designed products are not attractive yet, "but the entire industry is working hard. What we are doing now is to reduce power consumption, improve integration, and enhance functionality."

"We built the IoT platform 4 or 5 years ago. After the pie became bigger, it was easier for everyone to do business. We launched a combination of ultra-low power consumption. The first is ultra-low power consumption; the second is special process integration; the third is advanced packaging. All three are indispensable." Luo Zhenqiu said that TSMC saw this opportunity and built many processes, from 28, 40, 55nm, including RF, embedded, flash memory, logic, and sensor processes, which are easy for domestic customers and the industry to use. He also believes that Chinese IC companies did not catch up with the PC era, but caught up with the tail of mobile computing. IoT will be a good opportunity for domestic companies to overtake and leap forward.

Xu Changshen, senior vice president of SMIC's marketing department, also believes that domestic manufacturers are now in a golden age of the IC industry. The right time, right place, and right people are all essential. From the perspective of the right time, the entire industry is undergoing tremendous changes, whether it is big data or cloud services, new changes have occurred. "For example, in the IoT industry, we do not need to use particularly advanced process technology, we can use some mature processes to make some applications very well." He said.

As a representative of EDA manufacturers, Synopsys Senior Vice President Ke Fuhua also introduced their efforts in the field of low power consumption. He believes that IoT pursues lower costs and lower power consumption. Therefore, Synopsys needs to help customers reduce the overall system power consumption, such as reducing the power consumption of storage, which may reduce power consumption more than the chip power consumption. "So we acquired some system-level modeling companies six years ago and did some system modeling work, including providing some very low-power IPs, focusing on the processes required for IoT, such as 65 and 55nm, instead of 28 or 14nm." He said.

IoT requires not only speed but also breadth

"The interesting thing about IoT is that for the first time, we see IC suppliers are hesitant in product definition." Wang Guoyong, deputy general manager of UMC, said that for most electronic products, IC suppliers are already very capable. For example, MTK provides a full set of solutions, and many product definitions are ahead of system companies. Sometimes system companies don't know what products to make, but IC suppliers have thought of it. However, it is no longer so clear how IoT ICs should be designed, what they look like, what to put in them, and how to open specifications. Service providers that provide big data may have a clearer understanding.

"To do big data, in the early stage, sensors must be sold cheaply, or even given away for free, so that the price can be kept low. If the sensor price is kept low, the IC price cannot be too expensive. So our approach to this market is different from before, so how can we make money in this market?" Wang Guoyong believes that to be an IoT semiconductor manufacturer, not only must there be speed, but also "width". The so-called speed is not needed, which means that the technology required by IoT is not new, and all smartphone technologies can be used; the second part is the supply chain, and the supply chain that can be used by mobile phones now can also be used by Wearable and IoT. The so-called width means that IoT has CIS, Highway, PMIC, RF... If your product line is wide enough, you will definitely find a chance to survive.

IoT business models will undergo major changes

Xu Changshen said that in the field of mobile phones, there are still relatively few Chinese IC design companies that have entered the Design In, because AP and Baseband are still monopolized by a few large international companies. However, in the future, after the outbreak of IoT, this situation may completely change, because IoT no longer needs 14 or 16nm, and it can fully play its role on mature platforms. "We actually still have a lot of room for optimization and development in mature processes, and SMIC will also spend a lot of effort in this area in the future." He finally believed that IoT will eventually make money through ecosystems and operations, "It will definitely be difficult for people who only make chips to make money."

Luo Zhenqiu said that in the next 5 to 10 years, the entire semiconductor industry is expected to undergo a very big change. "In the future, there will be more and more vertical integration of the industry chain. One possible change in the future is that system manufacturers will consider integrating software and hardware first, so foundries must not only communicate with design companies or IDMs, but also with system manufacturers and even lower-level customers directly."

It is interesting to note that major foundry companies are very keen to discuss the "Xiaomi model". "If you look at the entire IoT, we see the figures that the market value of the entire IoT is more than 60 billion US dollars, but this value is not in the hardware, but in the software and applications. If it is just the semiconductor sector, it may only account for 10-12%. So if we still use the old business model, to be honest, we may be eliminated soon." Luo Zhenqiu analyzed.

8-inch production capacity may be insufficient in the IoT field

Since the IoT field does not use the most advanced technology, but rather the old 8-inch technology, and the current domestic 8-inch production capacity is insufficient, the IoT is likely to encounter production capacity problems in the next few years. Wang Guoyong, deputy general manager of UMC, said that 8-inch will be out of stock in the next three years. "This is a structural problem. We started to find this phenomenon last year, and the more we look down, the more serious the situation becomes." Wang Guoyong believes that currently, including fingerprint recognition, RF IC, PMIC, etc., all require 8-inch production lines, and the entire mobile phone industry is shifting from 3G to 4G, so the problem of severe shortage of 8-inch production capacity will become more and more serious.

According to reports, in order to solve the problem of insufficient production capacity, UMC started to expand its production capacity in Xiamen last year, and planned to reach 65,000 pieces in the future. Now it has reached more than 50,000 pieces. In addition to UMC's expansion of 8-inch production capacity, SMIC's 8-inch wafer factory in Shenzhen has also been officially put into production recently. It is the first 8-inch production line put into use in South China. Specifically, SMIC's Shenzhen factory capacity plan is to reach an installed capacity of 10,000 pieces/month by the end of 2014, and at least 20,000 pieces/month by the end of 2015. The longer-term plan is to make adjustments with changes in market supply and demand and technical preparations, and eventually reach a capacity of 50,000 pieces/month. This time point may be completed by the end of 2016.

In terms of production technology, SMIC's Shenzhen plant equipment can cover different technology nodes from 0.18 to 0.13μm, so SMIC will also be committed to meeting customers' production needs for corresponding technology nodes. The Shenzhen plant still has vacant space, and whether to build an 8-inch plant or a 12-inch plant in the future will be determined based on market demand. In terms of product direction, SMIC's Shenzhen plant has a wide variety of product lines, including power management ICs, CIS, image sensors, display panel driver ICs, fingerprint recognition chips, radio frequency, etc., which are suitable for the industrial characteristics of Shenzhen and other southern China regions.

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