SMIC's 14nm mass production time is officially confirmed!

On September 13, the 2018 China Integrated Circuit Industry Development Seminar and the 21st China Integrated Circuit Manufacturing Annual Conference were held in Wuxi, with companies from the integrated circuit industry chain including wafer manufacturing, equipment, and materials gathering. Li Zhi, executive vice president of SMIC, said at the meeting that the company's 14nm is in the customer introduction stage and will achieve mass production in the first half of next year.

On September 13, the 2018 China Integrated Circuit Industry Development Seminar and the 21st China Integrated Circuit Manufacturing Annual Conference were held in Wuxi, with companies from the integrated circuit industry chain including wafer manufacturing, equipment, and materials gathering. Li Zhi, executive vice president of SMIC, said at the meeting that the company's 14nm is in the customer introduction stage and will achieve mass production in the first half of next year.

Li Zhi analyzed that the global pure wafer foundry revenue has maintained growth. According to IHS data, the pure wafer foundry revenue in 2017 was 52 billion US dollars, and the revenue growth rate in the next five years will reach 8.9%. The demand for 8-inch foundry continues to be strong. Driven by advanced technology, the demand for 12-inch foundry will continue to grow. At the same time, we can also see the positive correlation between the development of the semiconductor industry and the development curve of the world's GDP. With the development of 5G, the Internet of Things, automotive electronics, cloud computing, big data, and artificial intelligence, semiconductors will have greater opportunities.

SMIC continues to expand its production capacity and lay out its industrial chain. According to reports, SMIC's monthly production capacity has increased by nearly 160,000 pieces in the past three years, an increase of 64%. In 2017, R&D investment exceeded US$500 million, accounting for 17% of sales, and capital expenditure was approximately US$2.5 billion.

In the distribution of sales revenue technology nodes, 150nm and 180nm accounted for 37.1%, 55nm and 65nm accounted for 24.2%, and 40nm and 45nm accounted for 17.5%. These three contributed more than 78% of the revenue share.

To speed up the investment in the new factory, on October 13, 2016, SMIC held a launching and groundbreaking ceremony for its new 12-inch integrated circuit production line in Shanghai.

On January 30, 2018, SMIC South, a subsidiary of SMIC, signed a joint venture contract and capital increase and share expansion agreement with the National Integrated Circuit Industry Investment Fund and Shanghai Integrated Circuit Fund, increasing its registered capital from US$210 million to US$3.5 billion and accelerating the introduction of advanced manufacturing processes and products.

In terms of R&D, we are accelerating the independent R&D of 14nm and below advanced processes. SMIC's 14nm patent applications rank fifth in the world. In the second quarter of 2018, the first generation of 14nm FinFET technology entered the customer introduction stage and will enter mass production in the first half of next year.

Li Zhi said that the challenges facing industrial development come from fierce competition, rising costs, bottlenecks in process technology, talent shortages and technical barriers. In terms of talent, SMIC actively introduces industry talents. Currently, SMIC has a total of about 17,800 employees, including nearly 550 foreign employees in China. In addition to front-line employees, 80% of them have a bachelor's degree or above. It has a senior R&D team of about 2,000 people, including 5 experts from the "Central Thousand Talents Plan", 1 expert from the "Shanghai Thousand Talents Plan", 2 experts from the "National Ten Thousand Talents Plan", and 1 expert from the "National Hundred Thousand Talents Plan".

SMIC has been favored by customers both in China and abroad. At present, 70% of domestic design companies are willing to choose SMIC as their first foundry partner. Since 2018, China's sales have accounted for more than 50%. Among the top 10 customers, 4 are Chinese customers, 4 are North American customers, and 2 are Eurasian customers. Communication and consumer electronics application terminal sales account for more than 80%.

While actively improving its industrial chain layout, SMIC has also strengthened vertical integration. For example, the establishment of SMIC Long Electronics has strengthened industrial chain linkage and vertical integration, and realized the full industrial chain layout of "manufacturing + bumping + packaging".