BYD's "Chinese Chip"

IGBT is to BYD as HiSilicon chip is to Huawei.

China is entering the era of independent intellectual property rights in an all-round way. BYD IGBT, which has broken the technological barriers of foreign monopoly, is accelerating the pace of domestic substitution.

On June 15, BYD (002594) announced that its holding subsidiary BYD Semiconductor has completed the introduction of A+ round of strategic investment. This round introduced 30 strategic investors including Hubei Xiaomi Changjiang Industrial Fund Partnership, Hubei Lenovo Changjiang Technology Industry Fund Partnership, Shenzhen Country Garden, etc. in the form of capital increase and share expansion, with an increase of nearly 800 million yuan.

This is BYD Semiconductor's second round of rapid financing in two months. On April 14, BYD Semiconductor announced the introduction of external strategic investors for the first time, and completed the A round of financing in just 42 days. Sequoia Capital, CICC Capital and SDIC Innovation led the investment, and Himalaya Capital and other domestic and foreign investment institutions participated in the subscription, with a total capital increase of 1.9 billion yuan.

So far, BYD Semiconductor has raised a total of about 2.7 billion yuan in just two months, and its current valuation has reached 10.2 billion yuan. In the future, it will continue to introduce strategic investors such as South Korea's SK Group, Xiaomi Group, CMB International, Lenovo Group, CITIC Industry Fund, Houan Fund, SMIC Juyuan, SAIC Capital, BAIC Capital, Shenzhen Huaqiang, Blue Ocean Huateng, and INVT.

After 15 years of independent research and development technology accumulation and large-scale development of new energy vehicles, BYD Semiconductor has grown into China's largest IDM automotive-grade IGBT manufacturer, with products covering passenger cars and commercial vehicles, and its cumulative installed capacity ranks first in the country.

In the global competition for the new four modernizations of automobiles, only technology innovation-driven companies can stay ahead. BYD Semiconductor's "Chinese Chip" will enable the sustainable and healthy development of China's new energy vehicles.

IGBT bottleneck　

Do you still remember the CCTV program “Great Power Equipment”? IGBT once appeared prominently in it.

IGBT is the abbreviation of Insulated Gate Bipolar Transistor, and its scientific name is "insulated gate bipolar transistor". It is a core component in the field of industrial control and automation, and is widely used in traditional industries such as industry, 4C (communication, computer, consumer electronics, automotive electronics), aerospace, national defense and military industry, as well as strategic emerging industries such as rail transportation, new energy, smart grid, and new energy vehicles.

IGBT is known as the "CPU" in the power electronics industry. It is the core device for energy conversion and transmission. IGBT chips and power battery cells are called the "dual cores" of new energy vehicles. They are key technologies that affect vehicle performance, and their cost accounts for about 5% of the total vehicle cost. IGBT directly controls the conversion of direct and alternating current in the drive system, determines the vehicle's torque and maximum output power, and directly affects the vehicle's acceleration ability and maximum speed. If the power battery generates electricity, then IGBT tames electricity. The role of IGBT is to regulate and control current. In addition, IGBT chips are also used in the core components of charging piles.

IGBT is a type of automotive power semiconductor. As one of the core technologies of new energy vehicles, it has long been monopolized by foreign manufacturers. The global IGBT market is mainly occupied by giants such as Infineon, Mitsubishi Electric, Fuji Electric, ON Semiconductor and ABB, with a total market share of more than 65%. Infineon, which ranks first, has a market share of 34.5%. In the domestic IGBT market, Infineon, Mitsubishi Electric, Fuji Electric and others also occupy more than 50% of the market share. All this is because the design threshold of IGBT is high, the manufacturing technology is difficult, and the investment is large.

An IGBT chip that is only as big as a fingernail needs to have hundreds of thousands or even millions of microstructure circuits etched on its surface. There are more than a dozen parameters involved, which need to be considered in many aspects according to the application. The difficulty of wafer manufacturing process is mainly concentrated in the processing of thin slices. The processing of complex processes requires the factory to achieve ultra-high cleanliness. Dust of a few tenths of a micron can cause the IGBT chip to fail. Not only that, the design difficulty of IGBT module is also very high, and it is necessary to consider multiple indicators such as material matching, heat dissipation, structure, power density, appearance, weight, etc.

According to the forecast of French market research company Yole, by 2022, the total revenue of the global IGBT market will exceed US$5 billion, of which the total revenue of IGBT for new energy vehicles will account for about 40% of the entire IGBT market, becoming the main incremental growth of the market.

According to a report by CITIC Securities, the current cost of IGBT for pure electric vehicles above Class A is between 2,000 and 4,000 yuan, and for plug-in hybrid models it is about 2,500 to 3,500 yuan. The cost for luxury cars is relatively higher, at more than 5,000 yuan.

Therefore, the domestic replacement of IGBT is imminent. Gradually getting rid of long-term external dependence and breaking through bottlenecks are the top priorities for the long-term development of China's new energy vehicles.

BYD IGBT 4.0 "breaks the barrier"

The improvement of the technological level of high-end components will drive the overall technological level of the industry to rise accordingly.

As the first Chinese company to achieve large-scale mass production of automotive-grade IGBTs, BYD has finally bid farewell to the "bottleneck era" of IGBT core technology.

15 years ago, BYD set up a research and development team to develop IGBT. In 2008, its acquisition of Ningbo Zhongwei Semiconductor Wafer Factory caused a sensation. In 2009, the first generation of IGBT chips was successfully developed and passed the scientific and technological achievement appraisal of the Power Electronics Branch of the China Electrical Equipment Industry Association, achieving a breakthrough in core technology.

In December 2018, in winter in Ningbo, the rigid technical barriers of IGBT began to loosen. BYD announced the launch of its automotive-grade product IGBT 4.0. After multiple iterations and upgrades, IGBT 4.0 has reached the world's leading level in key indicators such as chip loss, module temperature cycle capability, and current output capability, breaking the technology monopoly of foreign giants.

The first model to use IGBT 4.0 is the BYD Tang, which can accelerate from 0 to 100 km/h in 4.5 seconds. Compared with the current mainstream products in the market, its current output capacity is 15% higher, the comprehensive loss is reduced by about 20%, and the temperature cycle life is increased by about 10 times.

With the continuous upgrading of IGBT technology, the basic materials of power semiconductors have evolved from silicon (Si) and gallium arsenide (GaAs) to silicon carbide (SiC). This material is more resistant to high temperatures and can withstand higher voltages. The MOSFET (metal-oxide semiconductor field-effect transistor), which originally had weak voltage resistance, can be comparable to automotive-grade IGBT after using silicon carbide.

BYD Semiconductor is the world's first semiconductor manufacturer to apply SiC to automotive main electronic control. The BYD Han EV, which is about to be launched, is equipped with a SiC electronic control module.

It is expected that by 2023, BYD's new energy vehicles will be able to fully replace IGBT with SiC MOSFET, and the vehicle's driving performance will be further improved by 10% on the existing basis.

In May this year, the BYD IGBT project with a total investment of 1 billion yuan was officially started in Changsha. After the production line with an annual output of 250,000 8-inch wafers is put into production, it can meet the annual demand for 500,000 new energy vehicles.

At present, BYD's IGBT chip wafer production capacity has reached 50,000 pieces per month, and it is expected to reach 100,000 pieces per month next year, which can meet the demand of 1.2 million new energy vehicles a year, which is equivalent to the sales level of new energy vehicles in 2019.

More open and more powerful

Toyota and Panasonic’s joint venture, Volkswagen and Ford’s alliance, Huawei’s 5G automotive ecosystem… More and more strategic agreements in the automotive industry are sending a signal: the entire automotive industry and ecosystem are moving towards openness and cooperation.

On the basis of vertical integration of its core technologies, BYD is also moving towards openness, which means new opportunities, innovation and integration. In 2020, BYD's openness process began to accelerate.

In March, BYD completed the separation of its major parts business and established five independently operated companies, namely Fudi Battery, Fudi Vision, Fudi Technology, Fudi Power and Fudi Mould, covering almost all core areas of new energy vehicle parts. With the establishment of five Fudi companies, it marks the advancement of BYD's open strategy from 1.0 to 2.0. The independent Fudi will have more autonomy and will help accelerate the popularization of global electrification.

In April, BYD announced that its subsidiary "BYD Microelectronics" was officially renamed BYD Semiconductor after internal reorganization, and introduced strategic investors through capital increase and stock expansion, seeking to go public independently at an appropriate time. Currently, BYD Semiconductor's cumulative IGBT installation volume ranks first among domestic manufacturers, with an IGBT market share of 18% in 2019.