Dai Hui: The development of the chip industry cannot be separated from China, and "de-Sinicization" is impossible

Against the backdrop of the Sino-US competition, global 5G is still advancing in full swing. Although affected by the epidemic, global smartphone shipments declined in 2020, but 5G mobile phone shipments still reached 280 million to 300 million units, a significant increase compared to 20 million units in 2019. With the rapid implementation of 5G around the world, new technologies around 5G are being used one after another, driving investment in 5G-related equipment and providing a strong impetus for the reconstruction of the industrial chain.

On May 11, 2021, at an online live broadcast of the "5G RF and DDR Theme Summit", Aijiwei Vice President Dai Hui was invited to give a keynote speech entitled "5G, Chips, Digital Economy and the High-tech Game between China and the United States". Focusing on the 5G/chip rules of the game under the high-tech game, Dai Hui elaborated on the following important points, which aroused great attention from the audience.

"De-Sinicization" cannot happen

In the high-tech game between China and the United States, chips have become the core. ZTE was banned from supplying chips in 2018 and Huawei was banned from supplying chips in 2019.

China has strong capabilities in whole-machine design and manufacturing and has accumulated rich experience in the electronics supply chain. Electronic products are the most important export commodities, consume a large number of chips, and also drive the development of the global chip industry.

After the Western world made basic innovations, China used engineering and application innovation (follow-up innovation) to gain global markets with huge output and high cost-effectiveness. If the core whole-machine design and manufacturing industry is retained, Western countries will not be able to "de-Sinicize". For example, Shenzhen is still a global avant-garde city for electronic whole-machines, and new species (such as e-cigarettes) are going global.

The supply ban and shortages have given many mainland semiconductor companies opportunities to rise, and new products have been given rare opportunities to be introduced. For example, in the mobile phone and automotive fields, these semiconductor devices can be subdivided into discrete components (resistors, capacitors, inductors, etc.); IoT (Wifi, Bluetooth, PLC, 4G...); analog and RF; second/third generation semiconductors; automotive chips, etc.

Driven by huge demand, mature processes are developing rapidly in China, production capacity is at full capacity, and coupled with good domestic geological conditions and stable electricity, domestic semiconductor manufacturing capabilities are rapidly improving.

5G eases (not intensifies) the high-tech game between China and the United States

It seems that the high-tech confrontation between China and the United States was triggered by 5G, but in fact, 5G plays an important role in easing the high-tech game between China and the United States.

Before 3G/4G, China and the United States had a strategic partnership. China provided extremely cheap smartphones and feature phones, while the United States dominated the world through the Internet and operating systems. China and the United States cooperated closely, and the United States also achieved digital hegemony.

However, with the development of 3G/4G, the smartphone industry is gradually moving towards standardization, and the risk of production model being copied is gradually emerging. Samsung has also built a supply chain in Vietnam. If it remains in the 4G era, Apple and other companies may relocate their production capacity on a large scale.

With the advent of 5G, the chip volume of 5G smartphones has increased by more than 50% compared to 4G, and the complexity has been greatly improved, allowing China's manufacturing advantages to continue to play a role. Apple's industrial chain cannot be transferred on a large scale in the short term, and Samsung has also brought some 5G models back to China for manufacturing. 

After Qualcomm's previous patents for 3G, 4G, etc. gradually expire, it can continue to collect licensing fees based on 5G, and Apple and Samsung have also ushered in the phone replacement market because of 5G.

7nm and 5nm processes and higher processes have found great use in 5G mobile phones. Without 5G, TSMC's advanced process progress would not have been possible so quickly.

It is obvious that the United States is strengthening its advanced chip manufacturing process in order to strengthen its voice in core chips and digital hegemony. However, basic processes and chips cannot be consumed by humans, and still need to be combined with China's complete machine links to form products that can be finally consumed.

In summary, 5G enables the entire electronics industry to profit from it, and 5G also prevents China and the United States from fundamentally decoupling in the electronics industry.

Competition and cooperation between 5G and new technologies such as WIFI 6

WiFi 6 can be said to be a competitor or a partner of 5G, and it also uses some technologies of 4G. Because enterprises can set up their own WiFi, WiFi 6 is attractive to corporate users. 

Qualcomm, INTEL and MARVELL can all provide chip solutions for OPEN RAN. Japan's Rakuten is the first network to adopt OPEN RAN. Germany has also issued more than 70 private network 5G licenses, including to Mercedes-Benz and other manufacturers. The park can use OPEN RAN to build 5G in the free frequency band. OPEN RAN is actually equivalent to super WIFI.

Satellite Internet (such as SpaceX) is very useful for families in remote areas, and is also suitable for backhauling 4G/5G base stations in remote areas. The two technologies can complement each other. Due to power limitations, total traffic is limited and cannot subvert ground mobile communications.

6G may introduce satellite communications, but it will still be basically ground-based mobile communications. 6G will change the core network, network security, etc., and China will surely lead the formulation of standards.

Cloud computing becomes the driving force of domestic CPU/GPU ecology

In the traditional stand-alone era, the compatibility requirements for CPU and GPU were very high, and it was difficult to build an ecosystem.

In the cloud era, even if only one application is adapted, it can drive the sales of many chips, thereby promoting the development of CPU, GPGPU, and AI chips. ARM's server CPU ecosystem has made great progress in China.

In the field of IoT, RISC-V is unstoppable and has begun to compete with ARM. Huami is one of the earliest companies to design RISC-V chips.

The rise of Chinese OS groups, and the general OS has a backup plan

Domestic proprietary operating systems have made tremendous progress, such as server OS, IoT OS, etc.

In the general ecosystem, multiple LINUX-based OSes on PCs have been widely used.

Hongmeng uses the Android ecosystem for general mobile phone operating systems. WeChat can also become a mobile phone OS when necessary, and its rich service accounts and mini-programs are the ecosystem.

China becomes the world's largest AI application market

There are several elements in the development of AI: algorithms, computing power, samples, and demand.

In terms of basic algorithms, it is estimated that there will be no major breakthroughs in the next few years.

The three main applications of AI are: speech recognition and synthesis, image and video recognition, and natural language processing. These three aspects are widely used in the Chinese market, especially face recognition in security, which is widely used in China. The core of autonomous driving is also video-based artificial intelligence.