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2019

06/06

China's semiconductor industry has fallen into the

Recently, Dr. Chen Datong, the founder of Howe Science and Technology, the founder of Exhibition Communications and the chairman of Huachuang Investment Committee, made a brilliant speech on the challenges and opportunities of semiconductor entrepreneurship under the Sino-US game at the final of the 2009 International Frontier Science and Technology Innovation Competition in the field of integrated circuits held by Zhongguancun Integrated Circuit Design Park. "Listen to your words and read for ten years." Xiaobian wrote this article on the basis of Dr. Chen's speech. I would like to use this document for semiconductor practitioners who are ready to start their own businesses or start their own businesses.

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The following is the main body of the article:





"From the rejuvenation incident to Jinhua incident in Fujian Province to the last of Meng Wanzhou incident to the present Huawei embargo, the game between China and the United States has intensified in the past two years. The cold war between China and the United States may be not only as simple as Shangganling, but also as a"protracted war", Dr. Chen said at the beginning.




Why does Dr. Chen feel this way? Because China's biggest import commodity is not oil, not aircraft, but semiconductors, which is also an important part of China's relatively weak.




The "Core" Acidic Course of Semiconductor Industry in China




Historians divide the past 200,000 years of mankind into the Stone Age, the Bronze Age and the Iron Age. The characteristic material in the information age is silicon. Nowadays, the output value of electronic components based on silicon exceeds that of steel. Silicon is the most common element in the earth's crust. The process of turning stones into silicon wafers is an achievement of turning stones into gold and one of the miracles of modern science. God seems to have played a joke on human beings. It took 200,000 years for our materials to return from stone to stone. In 1947, Bell Laboratory invented the semiconductor point contact transistor, which initiated the silicon civilization era of mankind. But China seems to have got up early in the market and caught up with a late gathering.

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Chen Datong also pointed out that, looking back on the past, China's semiconductor industry has experienced four stages of core acid process;




Stage 1: Closed development from 1958 to 79. According to Chen Datong, the characteristics of the local IC industry at that time were: 100% state-owned IDM; R&D depended on universities and institutes: reverse design + follow-up strategy.




Data show that China's semiconductor industry started in the 1950s, and in 1965, China has independently developed the first silicon digital integrated circuit, which is DTL (diode-transistor logic) digital logic circuit, only a few years later than Japan, the United States, and the momentum is no less than that of the United States in the early stage of semiconductor development. But later, for some reasons, China lagged behind in this regard.




Phase II: 1979-2000 entered a difficult transition period, when the country made several attempts, including 908 project, 909 project.




We can also see that in the early 1980s, two semiconductors research institutes of the Chinese Academy of Sciences, Beijing and Shanghai, successfully manufactured 4K memory in 79, 16K memory in 80 and 64K memory in 85. From 1984 to the end of the Seventh Five-Year Plan, 33 IC production lines were introduced. We will vigorously promote the development of integrated circuit industry.




In August 1990, the state invested 2 billion RMB and launched the "908 Project", including a 6-inch production line, a post-packaging enterprise and 10 design companies with 6 equipment projects. In fact, it took only four years to establish the project (which was approved only in 1994), which highlighted the slow decision-making mechanism of our country and could not adapt to the rapid development of high-tech industries. Finally, a second-hand 6-inch production line was introduced, which was not completed until about 1997.




"909" project can be said to be the most successful state-led semiconductor manufacturing project in China. The project was established in 1995, with a total investment of 10 billion RMB. Its main body is an 8-inch, 0.35-micron production line (Huahong NEC). Its advanced equipment has reached the international level in the same period. "909" is the result of one-time large-scale investment organized by the state on the basis of historical lessons. It is the success of "909" that has brought great opportunities for Shanghai and East China to form a new semiconductor industry community.



Stage 3: By 2000-2014, China was gradually in the market-leading position, and various semiconductor industries were rapidly rising, such as packaging, equipment, Foudry + fabless, etc.

At this stage, well-known enterprises such as Zhongxin International, Exhibition News, Redico, Huiding, Zhaoyi Innovation, etc., which are now in the sole position in China, were established.


Stage four: after 2014, under the guidance of the state and government's guidance fund and market, it has become a new mechanism. The mayor has the final say to transform the market into the final say, which has filled the industry missing, such as semiconductor storage and IC OEM production capacity and advanced technology, and realized the overall layout of the industrial chain in design, manufacture, packaging, equipment and materials. It has reached a stage of rapid development.


Dr. Chen Datong pointed out that after 2000, the total value of China's semiconductor industry soared from US$100 million to US$37 billion in 2018, and many of them succeeded, and this brutal growth of Chinese integrated circuits has its own characteristics. According to his point of view, this mainly includes the following six aspects:

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New Change of China's Integrated Circuit Entrepreneurship


Dr. Chen pointed out that since 2014, the support of national policies and funds has promoted the layout of integrated circuits in China, attracted more returns of Chinese concept stocks and overseas mergers and acquisitions. At the same time, it has increased the attention of local governments to the integrated circuit industry, which has also promoted a new transformation of China's integrated circuit industry entrepreneurship.


According to Dr. Chen's point of view: "In recent years, China's semiconductor entrepreneurship has made great progress. Ten years ago, the semiconductor industry mainly focused on overseas entrepreneurship, and now mainly on domestic entrepreneurship. Now, semiconductor entrepreneurship market positioning is more accurate, customers are more clear, but competition is also fierce; secondary entrepreneurship, the situation of leading enterprises is increasing, and more entrepreneurial teams with their own resources; Enterprises'innovative consciousness and actions are more obvious; the successful cycle of entrepreneurship has been greatly shortened, the IPO environment has changed, and the VC launch has been accelerated. In the future, the merger and acquisition withdrawal of semiconductor enterprises will be more common."

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Dr. Chen also pointed out some problems. "However, the rapid development of the industry has accompanied many problems. The semiconductor industry has quietly become a star enterprise. It has caught a star disease and has been following the wind." a lot of "pigs on the draught" have appeared, such as AI. There is also a general overvaluation, impetuous heart, infected with the Internet disease.


Undoubtedly, after years of development, China has made great progress in integrated circuits. How many years will it take for China to catch up with the world? According to Chen Datong, China has basically caught up with the world level in packaging, and it will take 5-10 years for design, 10-15 years for manufacturer, memory and OEM, and 10-20 years for equipment/material.


But now, Chinese semiconductor is in the whirlpool of Sino-US game, which brings severe challenges to Chinese integrated circuits. In Chen Datong's view, this will also be an opportunity.

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In the golden age of semiconductor entrepreneurship, corporate CEO is crucial




The best time to plant a tree is ten years ago, followed by now. The same is true in the field of integrated circuits.




In Chen Datong's view, this is the golden age of entrepreneurship, because winter is often a good opportunity for entrepreneurship, with vitality; coupled with education for all, the importance of entrepreneurship is highlighted; in addition, the system companies are fully open, the entry threshold is greatly reduced. But at the same time, IC entrepreneurs need to be wary of three challenges.

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In Chen Datong's view, there are three elements: vision, mind and execution.




He pointed out that a good CEO should not only have macro vision, be able to predict the trend of industrial development to determine market positioning, but also have a keen intuition, insight into customer psychology, to determine product functional details; at the same time, a CEO should have a heart, open-minded, profitable, decentralized, knowledgeable; do not worry about attracting first-class team; at the same time, a CEO should also have executive power, which It's not just about simple command management, it's about an effective management system and corporate culture within the company.

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Chen Datong further pointed out that the CEO should be one of the most knowledgeable people in the company, and need to discover the Blue Sea and follow the market rules.

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According to the 80-point rule of product standard, if there is no perfect product in the market, if the customer's acceptable bottom line is 60 points (pass line), the product must achieve at least 80 points, which must exceed the acceptable bottom line of the customer, but do not over-pursue perfection and over-design.


The rule is: 1% market opportunities, only 1% people can see that the white swans are ugly ducklings, BAT is a clear example, startup star companies almost no success!



The law of double time for new market development: The lesson that 3G start-ups teach us is that new market growth takes more than twice as long as analysts predict. The products of those start-ups who are in the forefront of the market have suffered the disaster of extinction.


The law of double time for new technology development: the development of disruptive new technology often takes more than twice as long as the entrepreneurial team predicts.

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In Chen Datong's view, entrepreneurship is not human work, it is a kind of life practice, is a very human way of life. At the same time, entrepreneurship is also a process of learning how to be a person. In his eyes, Tang Seng, a visionary and sentient monk, is the best CEO.

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He emphasized that if the CEO of an enterprise and the enterprise itself want to succeed, they should have the spirit of "stay hungry, stay foolish".

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