As a "bridge" connecting reality and virtual, analog chips even determine the future of China's semiconductor industry.
In the past two years, the US's suppression of Huawei and related companies has pushed the semiconductor industry to an unprecedented focus. In this context, the realization of domestic core independence is no longer a long-term goal of the past, but is replaced by a sense of urgency of "wind and rain." .
However, the backward situation of domestic cores is not a day's cold, and the independent realization of domestic cores is by no means a day's work.
The difference in strength is more than a disparity
From the perspective of the overall market situation, the global analog chips accounted for 12.2% of the global semiconductor market in 2018. Among them, the Chinese analog chip market accounts for more than 50% of the global market, and the market growth rate is higher than the global average. According to statistics from CCID Consulting, China's analog chip market reached 227.34 billion yuan in 2018, an increase of 6.23% year-on-year, and a compound growth rate of 9.16% in the past five years.
Although domestic analog chips have a vast space in the market, they are still far from abroad in terms of strength. Judging from the sales of global analog chip companies in recent years, there is currently no analog chip company in China that can rank in the top ten.
"Looking at revenue alone, the gap between domestic leading companies and international leading companies is actually one and more than 100 times. Taking revenue in 2019 as an example, Shengbang shares, as a leading domestic analog chip company, Revenue is less than 800 million yuan, while the international leading company TI’s annual revenue is 14.4 billion U.S. dollars (about 100.6 billion yuan), which is more than a hundred times worse." Hu core Internet (Beijing) Technology Co., Ltd. director and general manager Cambridge analyzed it.
From the perspective of industry maturity, the same is true. Naxin Microelectronics CEO Wang Shengyang believes: "From a global perspective, the analog chip industry has gradually transitioned from a rapid growth stage to a mature stage in the past 5-10 years."
In contrast, the domestic analog industry is still in the early stage of accumulation. Unlike most digital chips, the development of analog chip technology does not depend on Moore's Law, but is based on the number of experiments and the accumulation of technical experience in materials. Old-brand analog chip manufacturers such as TI and ADI have more than 50 years of development history and have accumulated a lot of research and development experience. However, my country's analog chip companies have been established for decades, or as short as two or three years. They are still young in terms of qualifications, and there is an objective gap between them and foreign giants.
The most obvious manifestation of the seniority gap lies in the technological leadership. Overall, in terms of relatively low-end products, such as low-end operational amplifiers, LDOs, DCDC power converters, etc., there is a small gap between domestic and foreign; the gap is relatively large in high-end analog products, such as the most widely used high-speed AD/DA Chips, the market is mainly monopolized by several multinational companies such as ADI, TI, MAXIM, etc. More than 95% of China's high-end AD/DA chips need to be imported. How big is the gap? Industry insiders pointed out that with a resolution of 14bit, the international ADC sampling rate can achieve 1G, 3G, 5G, or even 10G, but domestically it can only achieve 300M, 500M, and the gap is several times greater.
However, Wang Shengyang also pointed out that the gap at home and abroad is not only purely technical. "I think that high-reliability design, mass production quality control capabilities and experience, and delivery capabilities have become the current domestic shortcomings. When domestic chip companies begin to enter the higher-end and higher-barrier fields, this part is short. The board will appear quickly."
U.S. sanctions, do you know it or not?
In the field of analog chips, there is such a big gap between domestic and foreign, which is actually caused by many factors. If it is said that the country was still slack in the development of science and technology because of the idea of "buying is better than buying, or renting", then the sanctions imposed by the United States in the past two years have slapped this idea and also slapped Chinese analog chip companies. A lesson in reality.
Therefore, Hu Kangqiao believes, "Overall, the U.S. sanctions have more advantages than disadvantages for China's semiconductor industry. The positive effect is that no one was willing to adopt the domestic analog chips in the past few years, and domestic companies live very well. Difficulties, we can only fight for gross profit or price competition, and the current international situation makes China attach great importance to the replacement of domestic chips."
He learned that after the current domestic chips are made, many downstream customers choose to make two sets of solutions, one is a purely domestic chip solution, and the other is a solution that mixes domestic and foreign chips. "Over time, some more downstream customers such as government units and supply departments will have 100% localization requirements. Once the domestic upstream and downstream industries are linked, the upstream analog chip design companies will be better off. Even the initial products If there are defects, customers will also be willing to improve together with chip manufacturers. This is a very good development trend. On high-end analog chips, the US crackdown has actually started long ago, and it is not a recent move. Therefore, the impact in this respect is actually Not big.” Hu Kangqiao expressed optimism about the impact of US sanctions on the domestic analog chip industry.
Wang Shengyang also holds the same view: "From a general perspective, this has provided an important boost to the development of the domestic analog chip industry. More importantly, under the US sanctions, domestic chip manufacturers have been provided with leading companies in various industries. Opportunities for cooperation with our customers."
"Where is the strong US monopoly on chips? The reason is that in addition to technical barriers, there are market barriers. Before 2018, the entire domestic chip industry, including the analog chip industry, was mostly concentrated in the field of low-end consumer electronics. China uses price competition as the main competitive strategy. After the Sino-US trade friction, the industry’s leading customers have begun to actively seek localized alternative strategies. Under this opportunity, I think the domestic analog chip industry has ushered in a very important Growth window. In the past two years, domestic analog chip companies, including Nanochip, have doubled year by year." Wang Shengyang added.
However, it should be noted that this benefit is more from a long-term perspective. From the current reality perspective, the biggest problem facing domestic analog cores is that the localization rate is too low, and the difficulty of upgrading is huge. According to the statistics of the Prospective Industry Research Institute, the top five companies in the domestic market with a market share are all foreign companies. They are benchmarked against the leading foreign analog ICs. Domestic analog IC products are still at an absolute disadvantage in high-end applications.
To what level can the localization rate of analog cores be increased in the short term? Even Hu Kangqiao, who is optimistic, believes: "It is great to be able to increase to 10% in 5 years. This means that the simulation company has enough capital and financial resources, and it is very difficult at the beginning." But so low. To what extent can China’s localization rate ensure that domestic downstream customers are not burdened by "stuck necks"? This is probably the biggest question faced by domestic analog chip companies and related customers.
The best era of domestic analog core
Obviously, the domestic analog chip industry, like other semiconductor industries, has ushered in a historical opportunity that can be met but not sought. The desire of enterprises to strive for the upper reaches is important, but the “visible hand” of the government will also play an extremely important role in promoting. Fortunately, the central and local governments have tailored relevant preferential policies for this purpose, such as tax reductions and exemptions, Film subsidies, the registration system of the Science and Technology Innovation Board and the Growth Enterprise Market, etc.
Among multiple policies, Hu Kangqiao believes that “the best policy for analog IC companies is the registration system of the Sci-tech Innovation Board and the Growth Enterprise Market. Under this policy, companies that were previously “half alive” are now going to be listed soon after they have changed. , Talents and advertising effects have been suspended through listing."
In this regard, Wang Sheng Yang Shen believes: "Through the registration system of the Sci-tech Innovation Board and the Growth Enterprise Market, science and innovation enterprises, especially semiconductor enterprises, can benefit from the dividends of the capital market and receive support from the capital market in the early stage. We can see that in the past two years, many domestic simulation companies have successively landed on the Science and Technology Innovation Board.
Regarding the government’s help to enterprises, Aiwei’s CEO, Hongjun Sun, also feels, “As a high-tech company, Aiwei has invested heavily in R&D and has a high demand for financing. In this regard, government leaders have actively helped Aiwei to connect with banks. Solve financing problems. Because some products of Aiwei require outsourcing processing, sometimes they encounter difficulties during customs clearance. In this regard, government leaders actively invite Xinzhuang Customs to come to directly communicate with us and answer questions. In order to solve the company’s employee accommodation problems, the government provides There are many such cases. The government’s efforts in optimizing the business environment have really made companies feel warm and caring."
In addition to policy support, the market is also a big driving factor. In the future, with the rise of industrial Internet of Things, 5G, and new infrastructure, the future of the domestic analog IC industry will undoubtedly have greater opportunities.
"5G, artificial intelligence, industrial Internet, big data center and other major new infrastructure fields have generated huge demand for the chip industry, which will usher in new opportunities for the development of related chip industry chains." Wang Shengyang believes. He is more optimistic about the auto industry and believes that the auto industry will become a blue ocean market in the future. It is understood that Nanochip has also introduced a digital isolation chip that meets vehicle regulations in due course.
Sun Hongjun also mentioned, “In the future, the development of 5G, the evolution of AI, new energy smart cars, and smart homes will bring huge demand for analog, mixed signal and other devices. We hope that Aiwei can grasp this history. opportunity."
Undoubtedly, the domestic analog chip industry has ushered in a "best era", but at the same time we have to recognize several practical problems. First, the technical barriers to analog chip design are high and industry talents are scarce. The design of analog chips not only requires comprehensive professional knowledge, but also requires designers to have long-term experience accumulation. Generally, excellent analog chip designers even need more than 10 years of industry experience. The above-mentioned interviewers Hu Kangqiao and Wang Shengyang even directly said, "The talent gap for analog IC is very, very large!" Whether domestic analog talents can support the important task of future development remains to be tested.
On the other hand, semiconductors have become the hottest "outlet" today, and countless semiconductor-related companies have emerged. Jiwei.com has reported that according to Tianyan Check information, from January 1 to May 26, 2020, China has added a total of 2,021 companies whose business scope includes "chips, integrated circuits, and MCUs (micro control units)". Since May, 3922 have been added. And this figure, according to incomplete statistics, may be more than 3,000 in the domestic IC journey for decades. However, in the long run, do these companies really engage in related businesses in the semiconductor industry? Can it survive? All are still unknown. Even if it is a listed company, "whether it can continue to make profits after listing and whether it can continue to maintain competitiveness depends on the company's own accumulation." Hu Kangqiao pointed out.
For the domestic analog chip industry, the US sanctions have indeed brought the "dark moment", but at the same time they have also created excellent opportunities for domestic substitution. Can domestic cores seize the opportunity and survive the desperate situation? This is undoubtedly a big test for domestic cores.