At present, about 3/4 of the chip production is concentrated in East Asia, especially TSMC and Samsung. The chipmaker in Chinese mainland is accelerating its expansion in the global chip capacity.
Recently, there is a serious shortage of automotive chips, and many related chip manufacturers are adding orders for automotive chips to TSMC.
This situation makes the chip manufacturing industry which is inclined to Asia even more unbalanced. As a result, the US and EU countries are working hard to increase their domestic chip capacity and reduce their dependence on Asian manufacturers.
But such a move is costly. According to the estimates of the semiconductor industry association of America and Boston Consulting Group, the cost of manufacturing and operating new semiconductor facilities in the United States will be about one third higher than that of similar facilities in Taiwan in ten years.
The cost advantage of Chinese mainland is more obvious.The cost of Chinese Fabs is 37% to 50% lower than that of the United States. With the continuous improvement of the semiconductor industry chain in the region and the improvement of the overall technical level, its competitiveness in the global chip manufacturing industry can not be underestimated.
According to the financial times, the share of the United States in global chip manufacturing capacity has dropped from 37% in 1990 to 12% in 2020, while that of Europe has dropped 35 percentage points to 9% during this period.
The Chinese mainland's share of the market has been barely expanded to 15%, which is expected to grow to 24% in the next ten years.
Huge market and growth potential help Chinese Mainland become the main destination of foreign semiconductor investment worldwide. Data from the financial times show that since 2015, the Chinese mainland semiconductor industry has announced about 84 foreign direct investment (FDI) projects, 44% of which are in manufacturing.
Over the same period, the United States attracted 45 foreign semiconductor projects, followed by India (37), the United Kingdom (36) and Taiwan (29).
Wafer capacity transfer to China
With the support of Chinese governments at all levels, the semiconductor industry is expanding to many regions. Among them, the manufacturing industry is mainly concentrated in three regions: Central and western regions (such as Xi'an, Chengdu, Wuhan, etc.) focusing on memory chips and special equipment; Bohai Rim region (Beijing, Tianjin and Dalian) focusing on semiconductor manufacturing and equipment; Yangtze River Delta region (Nanjing, Shanghai, Wuxi, etc.) Focus on design, manufacturing, OSAT and equipment.
In the past decade, China's IC industry has developed rapidly. The average annual growth rate between 2011 and 2019 is 18%. In 2019, the total sales volume of China's IC industry will reach 756 billion yuan, an increase of 16% over the previous year.
Meanwhile, the structure of China's IC industry is being optimized, and the ratio of IC design, manufacture, packaging and testing is 4:3:3. The ratio of mature and developed semiconductor industry is 3:4:3 in the world, and the Chinese mainland is approaching the ratio gradually.
In recent years, semiconductor wafer fabs are moving from the US and Japan to Korea, mainland China and Chinese mainland Taiwan. According to semi statistics, in 2000, the combined semiconductor production capacity of the United States and Japan accounted for 57% of the world's total. At that time, the capacity of the Chinese mainland was only 2%.
However, by 2010, the semiconductor manufacturing industry in China and Taiwan was booming, even at that time, the Chinese mainland still had only 9%. But in 2019, Chinese mainland grew by 17%, driven by capacity expansion policies and new investments.
However, 40% of them are small diameter wafers of 150 mm and below. The Chinese mainland will continue to increase its production capacity and will surpass Taiwan, China to become the world's largest chip manufacturing market by 2021.
From the perspective of the wafer size capacity, as of 2019, the 300mm wafer ratio in Chinese mainland has increased to 12%, 200mm wafer to 15%, and 150mm less than 29%.
Since 2017, 39 semiconductor Fabs have been built in China. Of these factories, 35 are wholly Chinese owned and the rest are wholly foreign-owned.
The Chinese mainland has the largest semiconductor wafer fabrication project in the world. Currently, 57 wafer fabs are in operation. 26 wafer fabs are being built or planned, of which 19 are 300mm Fabs and 7 are 200mm.
Speed up the construction of Wafer Factory
In recent two years, the Chinese mainland's factories are growing faster and faster, whether they are foreign investors or local businesses. Especially in the current global shortage, the urgency of capacity expansion is more prominent.
As far as provinces and cities are concerned, as an important semiconductor City, Shanghai has announced the list of major construction projects in 2020. In terms of integrated circuits, the construction of 300 mm wafer advanced production line of Huali microelectronics, the 300 mm wafer SN1 project of SMIC international, and the characteristic process project of Jita semiconductor are under construction.
In addition, in the centralized contract signing of key projects held in Zhangjiang Science City, there are also projects such as Juchen headquarters and Shanghai Hualing high-end integrated circuit test platform.
Shanghai is the priority among priorities in Chinese mainland's chip manufacturing. In February this year, the Shanghai Municipal Development and Reform Commission announced the list of major construction projects in Shanghai in 2021. Among them, semiconductors play an important role, and several key projects deserve special attention, such as the R & D and transformation functional platform of Shanghai integrated circuit industry, the R & D and industrialization project of 300 mm wafer CIS integrated circuit of Geke semiconductor, etc.
Geke semiconductor 300 mm wafer characteristic process line project, with a total investment of about 15.5 billion yuan, is expected to be completed in 2024. It will build a 300 mm chip factory with a monthly output of 60000 chips, and build a 300 mm wafer CMOS image sensor chip special process manufacturing line (including two characteristic processes of BSI and OCF for CMOS image sensor chips).
In addition, there are Huali microelectronics 300 mm wafer advanced production line construction, SMIC international 300 mm wafer SN1 project, Jita semiconductor characteristic process production line.
Among them, SMIC 300mm wafer SN1 project is implemented by South China Center. The total investment is 9 billion 59 million USD, the planned monthly capacity is 35 thousand, the technology level is 14nm and below, it is the first FinFET production line in Chinese mainland, and also the main bearing platform of SMIC international 14nm and the following advanced technology development and production.
The total investment of the project is 35.9 billion yuan. According to the plan, the project aims to build a 200 mm wafer production line with a monthly production capacity of 60000 wafers and a 300 mm wafer production line with a monthly production capacity of 50000 wafers. Products focus on industrial control, automotive, electric power, energy and other fields.
In March 2020, Jiaxing started 75 projects, including Gan RF and power device production base project, new annual output of 2 million IGBT power devices project, Xinhua third group (H3C) electronic information industrial park project, 5g communication core RF components capacity expansion and test environment construction project, etc.
As far as the company is concerned, liandian announced in February 2020 that the total investment of Xiamen factory phase II project is 3.5 billion yuan; tower announced that it will build a 300 mm wafer foundry in 2020;
In Guangzhou, the second phase of the can semi project (300 mm 65-90 nm analog IC) is planned to invest 6.5 billion yuan; the second phase expansion of the ymtc project will start in June 2020, which will increase the production of 200000 wafers per month;
SMIC set up a joint venture in Beijing in August 2020, focusing on 28nm with an investment of US $7.6 billion. The 300 mm wafer factory it invested in Shenzhen is expected to be put into production in 2022; nexchip also invested 17 billion yuan to build a 300 mm wafer factory in Hefei.
Strong demand for semiconductor equipment
With the transfer of wafer production capacity to Chinese mainland, the construction of wafer fabs is speeding up, and the demand for semiconductor equipment is rising. The 2020 largest fiscal year of fiscal year data for the US semiconductor equipment manufacturer, the fiscal year of the year, shows that the revenue in the fiscal year is US $17 billion 200 million, of which the revenue from Chinese mainland is US $5 billion 460 million, which is 31.7%, and has been increasing for 5 consecutive years.
Chinese mainland surpasses Korea and China Taiwan, becoming the largest semiconductor equipment market in the world.
In addition, the US semiconductor equipment company, pan Lin, has earned 10 billion 45 million dollars in fiscal 2020, and the Chinese mainland market has contributed 31% of its revenue.
The Chinese mainland's revenue in the first two quarters of the 2021 fiscal year of Tokyo electronics reached 153 billion yen, accounting for 24% of its revenue. The Chinese mainland's revenue from the mainland's two quarters before the 2021 fiscal year has surpassed that of Korea and has become the largest revenue market. In addition, ASML's DUV lithography is also the largest market in Chinese mainland.
From the sales of semiconductor equipment, we can see that the world's chip manufacturing is rapidly transferring to China. If this trend continues, China will manufacture more than one third of the world's chips in the near future.
Like a raging fire, Chinese mainland chip manufacturing industry is developing rapidly. But behind the prosperity, there are also worries. The main difficulty lies in the fact that core technology and equipment are hard to provide for themselves, and the capacity of local enterprises is still far from the capacity of multinational enterprises in Chinese mainland.
According to the report of IC insights, the long-term trend of IC market share growth in China and the Asia Pacific region is unchangeable.
It is expected that the combined share of China and the Asia Pacific region in the global IC market will increase from 63.8% in 2020 to 68.1% in 2025, with a CAGR of 9.4% during this period.
Since 2005, China has always been the largest consumer of IC, but it is not necessarily the main producer of IC now, nor will it be in the future. Of the 143.4 billion US dollars of IC sold in China in 2020, only 15.9% of the IC produced in China is about 22.7 billion US dollars.
Among them, the total output value of companies headquartered in China was only US $8.3 billion, accounting for only 5.9% of the country's total IC market last year. Non local companies with Fab business in China (such as TSMC, SK, Hynix, Samsung, liandian, etc.) still account for the majority of China's IC output.
In addition, mainland China lacks the local non memory IC technology. In view of the fact that the IC production and technology starting point of Chinese companies is relatively low, it is more difficult to purchase advanced semiconductor manufacturing equipment. Chinese mainland is also a country with a large number of products.IC insights believes that China is unlikely to make significant progress in achieving chip (memory and non memory) self-sufficiency in the next decade.
- THE END -Semiconductor industry observation