Global semiconductor industry into a new pattern, embodied in industrial maturity, concurrently Evergrande, monopoly. Under the background of the rise of China's semiconductor industry, which development strategy should be taken?

Industry is more and more mature

Previously, the semiconductor industry has "swallow gold beast" and "the printing press," said. Today, "swallow gold beast" remain up to its name, and "printing money" but may have a false idea.

The global semiconductor industry after nearly 50 years of development, the main driver of it, i.e. the main application market, respectively is personal computer, Internet, mobile products, is now waiting for a new killer application.

Before semiconductor industry average growth rate of about 17%, is now increasingly close to global GDP growth. Market prediction, according to data issued by the company in 2015, 2016, 2017 and 2018 in the semiconductor industry growth rate is respectively 0.2%, 2.4%, 2.0% and 2.2%.

Another industry an important symbol of maturity, promote industry progress of classic - Moore's law has officially been fixed, every two years before the nodes into a technology (or 0.7 x), is changed to today's 2.5 or 3.0 years (or 0.75 x, 0.75 x).

Industry is the result of the supplied by Evergrande, monopoly. Industry before someone called semiconductor industry is three pillar in the future. This view has been as a joke to listen to, but now he has come close to. Investment of nearly $60 billion a year, Intel, samsung and TSMC three accounts for more than half. Many top IDM companies have started to stop tracking 28 nm process by Moore's law, to embrace the foundry, lead to global generation of industrial performance.

Concurrently Evergrande, monopoly is increasing but also in South Korea continues to dominate in the memory, the global DRAM makers left three (samsung, SK hynix and micron), NAND maker, the remaining four groups (samsung, Toshiba, sandisk, SK hynix and light/Intel), which accounts for over 60% than South Korea.

In addition, in the global foundry industry, the market share of 52%, TSMC to global foundry 28 nm and below accounted for 80%. And status in the global ranking first, Intel has lasted for more than 20 years. On the other hand 2015 semiconductor companies mergers again in full swing, mergers and acquisitions amount to $125 billion.

The rise of China's semiconductor

Under this background, China's semiconductor industry began to rise.

Since the snowden event, China issued a strong call to quickly solve the problem of autonomous supply of semiconductor industry. In 2014, "national integrated circuit industry investment fund (hereinafter referred to as the big funds)", and initiated a new round of development boom.

The biggest change is the fund as a seed fund, guide other joint investment of funds, and is to return funds by the specialized company in accordance with the market-oriented operation, to minimize the interference of the government. Despite the global semiconductor industry are mature, and China's semiconductor industry development in the emerging industry, the two are not synchronized.

Under the new pattern, an unavoidable question is the west continue to obstruct the progress of China's semiconductor industry. Their methods have two aspects, one is the tough blockade embargo, such as treatment of zte, sent a letter to stop and zte's trade activities, or launch "337 investigation" and the anti-dumping penalties. Another way is the so-called "community of interests", all in the name of cooperation all-win control the development direction of China's semiconductor industry, or weaken China's own research and development. Two ways used interchangeably, they are both to get the interests, and to obstruct the progress of China's semiconductor industry.

As the industry, China's semiconductor industry in the global rise is inevitable, the problem is in which point in time, and to have much impact.

China's semiconductor industry requires research and development, mergers and acquisitions and the troika of the joint venture and cooperation, is very important, need to go hand in hand.

In accordance with the current observation, in the research and development, as a result of weak foundation, large investment, low returns, coupled with a lack of talent, etc., therefore, on the whole enterprise's enthusiasm is not very high, there is no enough confidence. On the other hand also reflects the country in support of research and development is still not enough, and imperfect industry environment. But in the long run, to strengthen their own research and development is the fundamental measures, this step must be determined to stick to go on. Because no one any advanced technology to China, only China's own longer, opponents will relax a little.

Merger of the method is very attractive, but also relatively easy, the industry for their high hopes, also achieved certain results. Why merger can get industry, may be associated with the mentality of rush. But as the big fund manager Ding Wenwu say, lack of economic and technical strength and experience in global operations of the acquisition of main body, if only to stay in the level of capital operation, the integration of the future, the development has multichannel XianGuan. Merger and acquisition (m&a) is not an end, is only one of the means, so is the key to success after the merger. Observed at this stage may be warm enough to spare, so for merger might be the right guidance, to do more homework ahead of time, less impulse. "Suitable" has certain rationality. In addition, to learn more about the success and failure of international experience, the key project for higher yield rate.

Joint venture and cooperation, also is a very good method, is conducive to China's semiconductor industry under the new height to move on. Recently, China's semiconductor joint venture and cooperation projects to increase rapidly. Which closely related to international and domestic industry environment, one aspect is the world's industry competition intensifies, can achieve profitable market contraction, and China is the world's biggest IC market, industry hotspot on China, plus China can provide funds as well as a variety of preferential policies, including many project China provides a large number of low-cost land, this land project appreciation space is very big in the future. In terms of mentality, with the method of joint venture, China more, save worry save trouble, easy to success. However, after the joint venture cooperation, the future risk is relatively larger.

In order to increase its self-sufficiency rate of chips, a larger scope in recent Chinese strive to break two classes: the main chip memory and CPU (mainly server chips). Now, such as Intel, qualcomm, AMD is very clear, in order to avoid leakage technology, by adopting the strategy of technology blockade blindly is not always work, so these international giants are changing technique, sometimes put on a "ma3 jia3" of China, made a friendly gesture.

Server chips, for example, qualcomm and guizhou government joint ventures "in guizhou, China core semiconductor", server chip business special research and development, now the server development platform is ready; AMD x86 technology to tianjin sea ray, the partnership is primarily in the domain of the server; Not to mention the sense of smell, would have Power architecture of open source IBM, already have a few Chinese companies under the OpenPower platform.

Intel, of course, didn't also backward, and in January 2016, Intel and with tsinghua university: science and technology, the tripartite agreement announced the development of reconfigurable computing technology and the new general-purpose CPU based on x86 architecture. Intel in China for 31 years, global server product for the first time it starts in China.

We must always remember, however, they are all have protective and opening up, the most advanced technology will never to China. Overall, the manufacturers are using money and huge market in China, they bear little risk.

In short, the troika is important way, is very important to the development of China's semiconductor industry, and have different emphases.

For joint venture and cooperation projects, China save worry save trouble, but only provides mature process to make the industry of uneven, because it is impossible for advanced manufacturing technology to China, the risk of future are many, and may not be able to jump on others for further development of the design of the trajectory.

As for mergers and acquisitions, at present most popular, because relatively easier, achievement effect obviously, integration of trouble and risk is very big also, however, take a long time.

For the research and development, is probably the most difficult to obtain, because it is ", predecessors trees descendants cool, "and the probability of success is not too high. But the research and development is the fundamental strategy for China's semiconductor industry, almost no shortcut to bypass it. Does not have its own research and development, China's semiconductor industry is impossible to achieve the final success. Although for the research and development of important position to recognise that many, but really want to make the long term, the steadfast work or not. Currently the most urgent thing, must encourage enterprises to set up the determination and confidence, and builders to conquer difficulties, at the same time, countries to provide more perfect incentives.

Although China's semiconductor industry is in a special environment, but also could not find a troika compared to the development of more effective way, doomed to pay hard work, follow the rules of industry development, on one step at a time. Troika is only a means, fundamentally still needs especially the backbone enterprise of steadfast striving, thus arouse the enthusiasm of backbone enterprises is particularly critical. Success only most of the backbone enterprises, China's semiconductor industry may have a greater hope.