The trend of chip decisiveness cannot be reversed, but when will our “China semiconductor Manufacturing Company” appear?

The “chip shortage” has not only spread to the automotive industry, but has even spread to the world. Moreover, CCTV Finance Channel also reported recently that a German chip can rise from 3.5 yuan to 16.5 yuan, and a smart technology company can only accept the dilemma of “chip prices soaring five times”.

In fact, the increase in chip prices is no longer news, it is a fact that happens every day. Reporters have received information from car companies that the price of chips has increased by 10 to 20 times, so 5 times is still a “conscience price”. The report of the CCTV Financial Channel can be regarded as a realization of the “lack of core” anxiety in almost all chip-related industries at the national level.

Behind the price increase, according to the latest research report of Goldman Sachs, as many as 169 industries around the world are affected to a certain extent by the shortage of chips. Not only the automotive industry, but also steel products, concrete production, air-conditioning manufacturing, and even soap production are all affected.

However, we can’t just look at the A side of the crisis, the B side also contains opportunities. According to the statistics of Qichacha, by the end of May 2021, a total of 15,700 chip companies were registered, a year-on-year increase of 230%. The chip industry is still showing a rapid growth trend. In fact, since Huawei was sanctioned, the number of registered chip companies has grown exponentially. In 2020 alone, the number of registered chip companies will reach 21,700, a year-on-year increase of 216%.

Can the blowout of registrations solve the problem? In the short term, “far can’t quench near thirst”. But in the face of “lack of cores”, we have seen a spectacular prospect of great changes and restructuring in the industry. In the “Lushan Mountain” that lacks cores, we are drawn by this mighty force and need to think out of the way, what is the evolutionary logic behind this.

A wave of chip companies is on the way

The reports about the lack of cores are full of stories, how big the loss is, etc. Everyone is tired of reading it, so the reporter will say something else first. Let’s talk about the blowout of the number of chip companies registered, that is, the trend of 15,700 more chip-related companies in 5 months.

In fact, we can see from our analysis that according to the registered capital of chip companies in the first two months of this year (excluding self-employed), the number of chip-related companies with a registered capital of 1 million to 5 million yuan is the largest, accounting for 38%. Chip companies with registered capital of less than 1 million yuan and 10 to 30 million yuan accounted for 21% and 17% respectively. Only 9% of the above 30 million yuan.

In other words, just like in the ocean in nature, the largest number is always small fish and shrimp, and whales and sharks are always the few at the top of the pyramid. After all, in the field of chip manufacturing, China can currently compete with TSMC, Samsung, GlobalFoundries, and INTEL, the four companies that have entered the 7nm process, but none.

Let’s take a look at the current models of domestic automotive chip companies. There are basically three types: independent traditional automotive chip design companies, car manufacturers self-developed chips, and car manufacturers and chip manufacturers jointly develop chips. For example, Xiaopeng Motors, Guangzhou Automobile Group and other auto companies have launched self-developed chip projects or established chip response teams, and SAIC Group has also invested in 10 companies in the field of artificial intelligence chips.

However, according to the reporter’s interview at this Shanghai Auto Show, even companies such as Horizon, Black Sesame, and Xinchi Technology, whose production is all TSMC OEM. Only a few domestic companies have chip manufacturing capabilities, such as SMIC and CRRC, and they cannot meet the demand at all. A typical example is HiSilicon, a subsidiary of Huawei. Although it is already a leading domestic chip design company, once it is sanctioned, it will be extremely difficult.

Therefore, under the expectation that the “chip shortage” will continue for one or two years, we still need to reflect on the lesson that “people will have immediate worries without far-sightedness”. The car commune’s C-dimensional article “Chip shortage, a pure man-made disaster” may be a bit intense, but it is very clear. The combined effect of several aspects has led to today’s situation.

However, when talking about natural disasters or man-made disasters, we only see the past and the present. What matters is what will happen in the future? With the continuous breakthrough of China’s auto industry in the field of electrification and intelligence, the chip industry has become a visible core of competition, and it is a mountain that must be conquered. It can be said that domestic automotive chip companies are facing huge opportunities. The question is how can we have companies like “TSMC” grow up? The emergence of so many chip-related companies is of course a good thing, but can there be a “China Semiconductor Manufacturing Company”?

“Lack of core” is not fundamental

When the time comes to June, the situation of core shortage is still happening every day. The so-called “chip shortage” has made corporate executives even more panicked. Some executives even went straight to the chip maker. A typical example is Changan Automobile. At this year’s shareholders’ meeting, Changan Automobile Chairman Zhu Huarong inadvertently mentioned that Changan Automobile President Wang Jun was not able to be there because he wanted chips to go to suppliers to urge shipments, and he would not eat without chips. Use the method of “hunger strike”.

There are also improvements that are not lacking. For example, on June 2, General Motors said that GM North America allocated chips to high-margin trucks and increased truck production. This is one of the reasons why its first-half profit far exceeded previous expectations. And, after months of grappling with supply chain bottlenecks, GM is becoming increasingly stable in chip procurement and distribution. Therefore, GM expects semiconductor supply to return to normal in the second half of this year, which can increase vehicle production and shipments.

In last month’s “Reduction of 3.9 million vehicles, loss of 700 billion, and the “black swan” of lack of cores hits the auto industry,” the reporter has already talked about the situation that the lack of cores has hit the auto industry. AlixPartners, a consulting firm, has raised its forecast for a global “lack of cores” that will lead to a loss of automakers’ revenue in 2021 to $110 billion (about 714.5 billion yuan), an increase of 80 percent.

But as the media, what we need to think deeply about is, under the loss, do we need to be so pessimistic? The reporter believes that this is not necessarily a bad thing for car companies that have previously had headaches with high inventory. This is definitely a good thing for companies upstream in the chip supply chain, and it is a source of profit. We need to look at “lack of core” more objectively.

Therefore, the butterfly effect of “lack of core” is still fermenting, but it is not necessarily a bad thing. For example, in the channel terminal, from the recent reports of the automobile commune’s visit to 4S stores and related media, we can see the current situation of “no car to sell”, and it has become the norm to pick up a car within a month or two. We also noticed that, in fact, the channel terminal is very happy to see this kind of “tense” situation.

After several months of evolution, from the reporter’s point of view, this “chip shortage” is a critical moment to test the strength of global car companies and “the times create heroes”, just like the normal competition of the survival of the fittest in nature, just a comparison of China’s chip industry Below, it is indeed too weak, and it needs to grow as soon as possible.

“Whatever doesn’t kill me will eventually make me stronger.” For example, recently Bosch’s new fab in Dresden was officially inaugurated. This is the largest single investment in the Bosch Group’s more than 130-year history, with an investment of around 1 billion euros in the new plant. Moreover, the production of automotive chips at the new factory will start in September, three months earlier than originally planned.

On April 23, TSMC stated that the company’s board of directors approved a capital plan of US$2.887 billion. It is expected to build a monthly production capacity of 40,000 28nm chips in the Nanjing plant. It is expected that the production capacity will be gradually released in the second half of 2022. Intel on April 12 pledged to produce chips for cars within six to nine months.

As a side note, chip factories have a lot of input and output, and the cost is getting more and more expensive. For example, in the 65-nanometer process, the chip factory needs to invest 2.5 to 3 billion US dollars to break even. By the 14-nanometer process, the investment rose to more than $10 billion, equivalent to the construction cost of a nuclear-powered aircraft carrier strike group in the United States. Not just any chip company can afford these investments.

However, the reporter believes that the solution to the “lack of core” problem will definitely be shorter than the originally expected time. “Lack of cores” represents new opportunities and is a rare “clear stream”. China and the United States compete for this, and Japan is also envious. The question is whether China can win the chip war like it did with “two bombs and one satellite”.

Chip tiebreaker

Wei Shaojun, a professor at the School of Integrated Circuits at Tsinghua University, recently said, “Any technology that competes with chips will eventually become a loser.” The development of the automotive industry is also the trend of chips winning the future. Therefore, China’s auto industry needs more chip manufacturing companies such as “China Semiconductor Manufacturing Company”.

Why do you say that? With the trend of intelligent networking of automobiles, the number and value of chips used in bicycles continue to increase. Harald Kroeger, a member of the Bosch Group Board of Directors, said that in 2016, each new car in the world was equipped with an average of more than 9 Bosch chips. By 2019, this number has risen to more than 17, and the number has almost doubled in just three years. Fan.

From the perspective of the industry, according to the vehicle specifications and the degree of electrification, a traditional fuel vehicle needs roughly 100 to 200 semiconductor chips. On this basis, the number of electric vehicles should be doubled. drive motor, etc. A pure electric vehicle with a high level of intelligence even needs 800 to 1000 chips.

Therefore, more and more chips will be mounted on new cars, and the trend of increasing their value share is basically irreversible. And China is already the world’s largest single semiconductor market. According to statistics, the value of chips used in China in 2020 is 151.5 billion US dollars, accounting for 35%. That is to say, one out of every three chips produced globally is consumed in China. Even U.S. President Biden couldn’t sit still and called on major companies to be “hardworking kings” to fight a future chip war.

But we still seem to be avoiding the underlying problem. On February 26, the Ministry of Industry and Information Technology released the “Automotive Semiconductor Supply and Demand Docking Handbook”, which surveyed nearly 120 units of semiconductor companies in the upstream of the domestic industrial chain and downstream automobile companies and parts manufacturers to strengthen supply chain construction and increase production capacity deployment. But this doesn’t fundamentally solve the problem.

During the two sessions this year, a number of representatives of the people’s congress in the automotive industry also put forward suggestions to promote the localization of automotive chips and increase support for the automotive-grade chip industry.

“Lack of cores” is a temporary problem for the automotive industry. In fact, the core is that our chip industry has the manufacturing technology with independent intellectual property rights as soon as possible, and is no longer controlled by others. This is also a problem of gambling in the country. China once made its own chips in the late 1990s, and is not far behind. But unfortunately, it failed to attract the attention of the state and was stifled in the bud. This has been pointed out by many people of insight. Now, we once again appreciate the situation of being “stuck in the neck”, and we can no longer be so calm.

The starting point of each round of prosperity starts from the shuffling of the previous round. The “drop of water” that the chip price has increased by 5 times, sees the ongoing chip war.

Source: Gasgoo