The mainland market of every industry and at the same time represents the opportunities and threats. China is the world's major electronic manufacture and exporter, coupled with its market scale, the mainland every year to import a large number of chips. According to reports from Bain & Company, the ratio of imports of chips in 2020 will be close to 55% of global memory, logic and analog chips, and local production in China accounts for only 15% of chip, to help bridge the gap between supply and demand is not big, therefore the mainland to promote its position in the global semiconductor industry, improve the consumer and industrial equipment using microprocessor and memory chip production, in order to meet the domestic demand and exports.
In order to achieve the goal, China has established semiconductor industry groups across the country, the central and local government also plans to spend 720 billion yuan in the next 10 years, in addition to meet the demand of consumer and industrial semiconductor, and in part to support strategic needs, the development of defense used in sensitive industries such as communication and semiconductor, to reduce dependence on foreign chip maker.
Have given the semiconductor industry with high barriers to entry, the mainland take more cooperative manner, and the existing company such as guizhou government in January 2016 and Qualcomm, Qualcomm) joint venture, is responsible for the production of advanced server chips. Thunis has become Taiwan's testing industry force into the largest shareholder. But the mainland and hard disk giant witten (Western Digital and WD), meguiar's (Micron) trading case, by the mainland economic growth rate slows, U.S. regulators and other different factors and failed.
In high speed railway, for example, when the global stagnant demand of high speed railway, the mainland with control of the market demand and huge bargaining chip, to participate in mainland manufacturers have to accept strict IP transfer and ownership restriction conditions. Mainland so to quickly obtain the advantages of high-speed rail market within the next 10 years.
The government in mainland China, however, cannot directly control the consumer demand of automobile industry, the situation is different. China can only be encouraged through a joint venture, Volkswagen and general motors (GM) and other foreign companies in China, so the fox with GM in entering the mainland market after decades retained its market leading position.
As for the mainland also very slow in the progress of the aerospace industry, the main because of insufficient funds, and not from the Boeing company (Boeing) or Airbus (Airbus) to obtain the technology transfer. The two companies have factories in mainland China, but the main focus on the value chain in less involved in IP assembly or completed stage.
Semiconductor industry and automobile industry, the global consumer and business mainly based on quality, technology, value and brand choice system and element, so Chinese government can't control the market demand. Manufacturers must provide the efficiency of terminal consumer satisfaction and price to maintain a competitive edge.
Mainland into the semiconductor industry needs first considerations, the problem is where to cut both memory, logic, or analog chips, or pure chip design, wafer foundry or integration business model, all need to have basic IP and innovative ability.
Wafer foundry, the biggest challenge lies in the advanced manufacturing technology. The mainland market in mobile phone and tablet device such as a low cost has established stable ecological system, local industry more ability to continue to strengthen, efforts from assembly plant promotion to the system design and even the silicon chip design.
Logic chip design for China in addition to economic benefits, and strategic and security considerations, therefore is quite important. Logic chip and data center and the Internet of things (IoT) key platform, the FPGA, GPU, and RISC processor, etc. The new architecture, are each has its competitive advantage, can even challenge the supremacy, so China can consider to launch its own platform.
The advantage of the memory has shifted from America to Japan, then go to South Korea. Although the mainland manufacturers don't have leading storage technology, has show a strong heart, such as wuhan new core (XMC) with the manufacturers of flash memory Cypress Semiconductor together a $24 billion investment.
Internet related applications make sensors, energy management and the demand of the signal processor, such as analog chips, plus China actively promote electric vehicles and new energy, improve the analogy to the industry to enter the mainland market will, mainland companies have the opportunity to through integration into the market.
For the mainland to show the purpose of global semiconductor market, the semiconductor industry must be proactive, consider all kinds of feasible offensive and defensive move. Looking for investment and expand the opportunity to participate in, for example, from the other in partnership with the mainland enterprises to develop health industry learn from experience, and learn how to choose the right partners may obtain advantage is more important than the beginning.
As for mainland China semiconductor industry should be looking for or take over potential partners, both at home and abroad and aiming at win-win cooperation mode, common development, ecological system of technical adjustment, the production conforms to the mainland, it will cost is lower than that of the pure or IP transfer more efficient. For merger and acquisition targets at the same time, foster ability and talent, set the integration plan, to ensure the success of the transaction and stay on talent.
