In 2015 for the semiconductor industry, does not seem too good for a year, in terms of GDP growth rate, Gartner revised down with IC Insights, seem to also confirm the fact of the weak global economic growth. But only to be sure, the semiconductor industry has become the madness of m&a semiconductor industry is important in a drama, and the rise of China has become the focus of industry pay close attention to. In 2016, the global semiconductor industry will be how to develop? As one of the important global supply chains in Taiwan, how to deal with? This is a worthy of concern.

2016 semiconductor mergers will continue to spread

Gartner research enterprise of science and technology and service vendors Wang Duan analysis research vice President, although enterprises the cost of capital is extremely low, in part to strengthen the company willing to take the merger and acquisition. But the main reason is the semiconductor industry has entered the high mature stage, according to Gartner, said only 3.3% CAGR from 2014 to 2019. Output in the last two years is not too bright eye, if the company itself for the pursuit of growth or expand the city share, then take the m&a strategy, is the most effective means.

But at the same time of mergers and acquisitions, mergers and acquisitions party may still be some unprofitable departments, the completion of mergers and acquisitions, these departments have a great chance to be sold. Like Avago m&a LSI, the flash memory control chip division sold to Seagate, is an example. And sale department standard, about how many is the product gross margin, with foreign standards, gross margin of 40%, is the threshold. From the sense that the gross margin Wang Duan thinks, like Avago m&a Broadcom (Broadcom) after Boradcom, also some product line may also can't escape the fate of the sold.

In 2016, whether there will be mergers and acquisitions? From 2014 to 2014, the amount of mergers and acquisitions between semiconductor companies are astronomical Numbers, but in order to survive in the market, Wang Duan believe that mergers and acquisitions is still ongoing, but the transaction won't like these two years is amazing.

But he also reminded, once, after the completion of the whole and related supply chain also can produce adjustment, like cooperation wafer foundry or EDA (electronic design automation), would be likely to be centralized, Avago will many OEM orders to TSMC to deal with, it is understood that TSMC will Avago as important a line of customers. The mergers of the semiconductor, the short term can cause a big impact to related supply chain, but in the long run, will tend to stable state.

Avago LSI and Braodcom successively m&a, in order to shape the leadership position in the market, at the same time, for its products division, you don't need to sell directly, to ensure that the overall gross margin.

Vertical integration the resurgence Rewrite the rules of the game

EDA are recent players start towards system integration of market development, chip design is no longer the only source of profit, Wang Duan, said that from the factory began to make its own chips, many system is anticipated. Only the system operators know that the ideal system performance, and specifications, so from the chip design, in order to achieve this goal. Like apple, samsung and huawei, etc., are all examples of bright. From this point, the past technology industry common vertical division of labor, there will be toward "vertical integration" development, system providers will play a dominant role.

Wang Duan more in the future development of Internet of things, for example, although the Internet of things can create output greatly, but semiconductor can benefit from eating pie is still limited, the reason is that there are software, application service level, should be considered such as the semiconductor industry are still from "systems thinking" to think about competitive strategy.

Engineering institute IEK system with IC process technology, a senior fellow at Lin Hongyu says, Internet of things industry has the characteristics of long tail, lead to system operators began growing its own chip design, it will shorten the distance between the traditional supply chain, system manufacturers can also with silicon ipr (IP) supplier contact. This will further affect the supply of silicon wafer foundry, EDA, ipr and chip design service industry such as the change of the market strategy. But the consideration to the investment risk, system operators to tend to a detailed set of chip specifications, again through the silicon chip design service providers to the ipr owners authorization processor core mode to common development, in order to reduce risk.

Past vertical division of labor supply chain chain, as we will change each other cooperation mode.

Wang Duan stressed, the rules of the game of the semiconductor industry is changing, but there is no clear only determine that the rules of the game, the semiconductor industry without taking action, most likely will be eliminated.

"While in the field of wafer foundry TSMC hero, market share is also rising, the future has a chance to 10 nanometers metric distance with Intel, but in the face of the rules of the game change, TSMC if do not take action, it may hurt yourself." Wang Duan said.

Wang Duan explanation, over the past 65 metric, in addition to the first round of application processor operators will use,

Other digital chip providers will be adopted in the time after the follow up, so in the long term, 65 metric cheng capacity utilization can maintain a certain level. But after entering 20 nai metric distance, you will find willing to adopt advanced process began to decrease the number of the chip industry, once the apple and qualcomm began to more advanced production processes, so the capacity utilization rate of 20 nanometers to who will fill? In the past have semiconductor industry, such as stmicroelectronics MEMS fabs, always is 8 inch wafer factory to produce, and astonishing capacity, would stmicroelectronics product outsourcing, there will be a part of the product may adopt such a strategy, but at the same time, there will be other product line up, in order to ensure full capacity, as well as cost efficiency.

Wang Duan truth, if the future system industry will play a dominant role, then the wafer generation industry can also from the system Angle, trying to play a system of "main supplier", apple, for example, not only the application processor, such as fundamental frequency processor, power management chip and touch, etc., all can be committee by a single operator contract, this kind of practice can strengthen system operator for wafer generation industry dependence, if the system operator intends to chip design, wafer generation industry can also going to contact system operators, obtain active status, also can yet be regarded as an appropriate marketing strategy.

IDM light wafer strategy development will continue

In IDM industries, Wang Duan analysis, the current existing several IDM giant, the best method of semiconductor, IBM and panasonic semiconductor, etc, have been abandoned under 14 nanometer process research and development, the main reason is still the cost is too high, he to 12-inch wafer, with 16 nai metric, the quantity 1000 wafers, for example, the cost will be $145 million, if the quantity can reach 50000 pieces, that can want to see how much the cost would be high. So most of the IDM companies don't have the ability can cover such levels of plant, so will be more advanced products committee by wafer generation industry production. Existing capacity must be used to production more special products.

In the world of IDM, advanced manufacturing processes can continue to move, Intel is one of only two companies.

In addition to the IDM and the development of advanced process, another must also focus on, is the status of the analogy IDM companies in the field of semiconductor, the representative when to Texas instruments (TI) and infineon 12-inch wafer plant, represented by the former specializing in analog semiconductors, the latter is focused on the volume production of IGBT. Wang Duan analysis, the same product for mass production, 12 inch than 8 inches of the cost of fabs, only increased by 40%, but in a good naked crystal is a sharp rise in the number of two times, whether the yield, quality and cost and so on various aspects, 12 inch fabs absolute holds an absolute advantage, so the Texas instruments in this regard, almost all 8 inch wafer plant cannot match.

But he also mentioned that whether or smic, TSMC is starting to 12-inch wafer factory to OEM service analog chips, Taiwan and the mainland have a lot of 8 inch wafer plant customers, their respective to TSMC with smic 12 inch contract mobile, you can tell, 8 inch fabs competitiveness has gradually decline, in the long run, a wafer foundry or will endeavour to cost reduction and process innovation in the direction of development.

Red tide come Taiwan from the vertical supply chain

Although this year the global semiconductor industry appear constantly and news, plus China with silver bullet offensive continuously strengthening its semiconductor power, it also makes the Taiwan semiconductor industry's future development on a layer of concerns. However, according to the institute IEK estimates, Taiwan semiconductor industry in the global performance is still the leading role, is not need excessive concern, but how to effectively prevent actively, but Taiwan semiconductor industry should consider.

IC industry institute IEK system and process research, research manager Peng Maorong electronic systems research group pointed out that, for the moment, the biggest semiconductor application requirements, still comes from the PC (personal computer) and the mobile phone, the two combined has had an 50%, Peng Maorong cited Gartner research data to predict that global semiconductor production will decline 0.8% in 2015, will rise 1.9% in 2016, 2014 and 2019 CAGR of 3.3%, so the future of global semiconductor market growth will slow. But Taiwan's performance is better than global level, will grow by 1.9% in 2015, 4.1% growth in 2016.

Peng Maorong goes further, if the Taiwan semiconductor industry to break up, can be divided into wafer foundry, sealing test three times, such as IC design industry, the output value in the world in front of the first, the latter in the second, so overall, still in the lead, but the face of a global regional IDM (device integration manufacturing), surveying and IC wafer foundry, sealing design, the overall competition relationship is very complicated. Plus most of Taiwan's semiconductor industry is a fairly small scale industry. IEK advice, should actively cooperate with foreign semiconductor industry, not only to focus on the Chinese mainland, if there is an opportunity, the United States may also be good partners. The recent across the supply chain, the rapid rise of red with panels, estimates that in the field of IC design, Taiwan still ahead, about two to three years of time, seal test for three to five years, the leading gap wafer foundry is the largest, up to 10 years.

Having said that, if the two sides to cooperate, Peng Maorong also puts forward some possible cooperation pattern, like a sea of higher-order application processor by TSMC advanced process responsible for; The wisdom of huawei watches the memory needed to Taiwan in macro or winbond can also be used to supply, while the continental automotive electronics by sunplus and jie technology to supply the corresponding chip.

But Peng Maorong stressed that even if Taiwan leading China has a considerable distance, but still can not be taken lightly, industry constitution is still necessary to strengthen options, such as strengthen the forward-looking technology research and development, perfect the industry development of environment and accurate talent cultivation plan, etc., in order to before 2020, have the opportunity to create a t $three million for Taiwan semiconductor production.

Long ago, semiconductor and technology industry has the features of vertical integration,

Now from vertical division to vertical integration.

Taiwan and how to get out of your way?

From the vertical Angle of the supply chain,

It may be a choice.

Continental mining strong style Only strengthen technology constitution in Taiwan

Gartner research enterprise of science and technology and service vendors place, vice President of research Wang Duan said considerations to national security, the Chinese mainland in the use of semiconductor chip, most are imported from abroad, the important system for major infrastructure or build, caused a certain degree of concern. So the positive development of the domestic semiconductor industry has become China's government necessary policy direction. But with the influence of the time for the global semiconductor industry is painfully slow, substitution of merger and acquisition or investment strategies of silver bullet, will be faster to reach their goals.

But even as the United States and South Korea will be regarded as the national security level semiconductor industry level, previously either the micron or South Korea SK hynix, purple light group's m&a strategy change, in a way that can be seen as political engagement between countries. Wang Duan thought, the Chinese government on the policy implementation has always been to "efficient", said even if the U.S. and south Korean government blocked China's silver bullet offensive, but don't say China is weak for, China can still from other aspects, to achieve the ultimate goal of China's development of semiconductor industry.

China in the past on a number of policy execution is to "efficient", said the promote semiconductor has its own, one school of theory is that China's semiconductor industry will have the opportunity to become a new force.

But wang rui also reminded, even though China is likely to achieve its industry, but in the process of m&a strategy execution, still need to pay attention to the cultural differences between countries, after all, China is a rising star in the semiconductor industry, is the emotional level, is it true that the United States and South Korea to accept the leadership of the industry of China, this is still uncharted territory, even if really completed mergers and acquisitions, the loss of key personnel will seriously affect the market and even the development of the technology research and development, so as long as the m&a strategy execution of beautiful, can significantly reduce the risk of merger.

As for between mainland China and Taiwan in the semiconductor industry competition relations, Wang Duan pointed out that Taiwan is not like China there are many big system, so if you can let Taiwan to Chinese investment, the further understanding of the mainland market dynamics, Taiwan industry will further develop marketing strategies to make money out of the mainland, and the money if you can give something back to the industry of Taiwan, nature can produce a virtuous cycle, like jobs or enhance the level of salary, this is positive.

He further said that Taiwan chip companies to think that the future of the rules of the game industry is gradually changing, when the "king system as" thinking in power, Taiwan chip industry if can cater to the demand of the system operator, nature can rushes out a piece of the sky, at the same time, Taiwan's chip industry will also have to earn income, put in new technology research and development, under the new technology and the market can juggle, Taiwan chip industry nature will not be eliminated by the market.