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2019

06/24

Under the Cold War of Science and Technology, China's Semiconductor Industry ushered in a golden period of investment

Under the trend of globalization, semiconductor industry has quietly become a key area of national strategic security. Under the urgent need of domestic substitution, the system company is fully open to domestic semiconductor manufacturers, and the entry threshold is greatly reduced. The global semiconductor industry continues to expand, the United States is still in the lead, China is catching up, has made considerable progress, but there is still a gap. The growing semiconductor industry in China has a lot of investment opportunities to be tapped. It has a strong ability to precipitate funds and a high return on investment. With the recent opening of Kechuang board and the successive adoption of Kechuang board by Lanqi Science and Technology and Medium and Micro Semiconductors, it can be said that China Semiconductor will usher in the golden opportunity period of industrial development and investment.


On June 21, 2019, at the "Core Road New Horizon-2019 Semiconductor Industry and Capital High-end Forum", co-sponsored by Hanneng Investment and Beijing Semiconductor Industry Association and guided by Zhongguancun Science and Technology Park Management Committee, more than 100 leaders, including relevant government leaders, top executives of excellent semiconductor enterprises and heads of first-line investment institutions, jointly discussed the development of Chinese semiconductor enterprises. Prospects for the development of investment institutions to explore suitable industrial links and investment methods.


The summit was opened by Zhang Zhihong, chairman of Beijing Semiconductor Industry Association, and Chen Hong, chairman of Hanneng Investment Group. Pan Deng, deputy director of Industry Department of Zhongguancun Science and Technology Park Management Committee, also delivered speeches on activities and semiconductor industry. Subsequently, three distinguished speakers interpreted the macro environment and development trend of semiconductor industry in depth.

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Wei Shaojun: Prospect Prediction of the Cold War of Science and Technology Caused by Sino-US Trade




Wei Shaojun, director of the Institute of Microelectronics of Tsinghua University, director of the National Science and Technology Major Project of "Nuclear High-Tech Foundation" and deputy director of the Beijing Semiconductor Industry Association, believes that the Sino-US trade conflict is still ongoing, and there is a danger of prolonging to the field of science and technology. Since the new century, the global economy has gained rapid development thanks to the unification of global technology in the field of Internet and mobile communications. If trade conflicts lead to the splitting of global technological standards, it will inevitably bring immeasurable negative impact on the long-term development of the global economy and industry.

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Chen Datong: Opportunities and Challenges in China-US Game


Chen Datong, Executive Partner of Puhua Capital (Huachuang Investment) and Vice President of Beijing Semiconductor Industry Association, delivered a keynote speech on "Opportunities and Challenges under the Sino-US Game". He believes that the cold war between China and the United States may not be as simple as the "Shangganling" campaign, and it is likely to be a protracted war, because China's largest import commodity is not oil aircraft, but semiconductors. Looking back on the past, China's semiconductor industry has gone through four stages of acid-core process. However, in recent years, China has made great progress in semiconductor entrepreneurship, with fierce competition, the successful cycle of entrepreneurship has been greatly shortened, the IPO environment has changed, and VC withdrawal has been accelerated. In the future, the merger and acquisition withdrawal of semiconductor enterprises will become more common. Today, China's semiconductor industry is caught in the whirlpool of Sino-US game, which brings severe challenges to China's integrated circuits, but it will be an opportunity. In Chen Datong's view, it is the golden age of entrepreneurship, and entrepreneurship in the severe winter era has more vitality. Enterprises only need to stay away from impetuosity, close to the market, work hard, accumulate sufficient technical strength, accumulate thin hair.

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Chen Shaomin: Prospects for Semiconductor Financing in the New Bureau of Science and Technology Cold War




Chen Shaomin, managing director of Hannon Investment and visiting professor of Shanghai Jiaotong University, delivered a keynote speech on "Semiconductor Financing Prospects of the New Bureau of Science and Technology Cold War". He believes that the cold war of science and technology is a process of competition among big powers, and semiconductor is the foundation of information industry. China is the largest manufacturer of electronic products in the world. In stimulating international competition, China has produced a large number of first-line OEM brand manufacturers using semiconductor international supply chain. In the past, these first-line OEM brands have been using the world-class semiconductor supply chain, and domestic semiconductor companies have no chance to enter. From the point of view of supply chain security, we should change our attitude and actively support domestic semiconductor companies. China's domestic semiconductor import substitution leads to market explosion. At present, for Chinese companies, it is an alternative market, including the entire semiconductor industry chain. Next tuyere, from the application point of view, mobile phones, IoT, AI, new energy vehicles are the next opportunities to drive semiconductor growth. At the same time, we should learn from the lessons of Japanese semiconductor development, formulate the correct strategy, follow the rhythm of the market, grasp the outlet in time, and make Chinese semiconductor enterprises go up against the wind.

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Round Table 1: Investment Opportunities and Challenges in Semiconductor Industry




From the perspective of investors, Zhao Lanyang, Managing Director of Hannon New Economic Fund, Liu Xinyu, Shengshi Investment Management Partner, Li Xiaojun, IDG Capital Partner, Li Lei, Dinghui Investment Managing Director, Cao Jia, Xiaomi Investment Managing Director, jointly discussed whether China can really produce more companies with strong competitiveness, sustained profitability and even great company in the next 5 to 10 years. Is the current domestic and international situation more conducive to the emergence of such companies or will it become more difficult? Different institutions also have different income and risk preferences. What is the investment logic behind it? At present, there are many semiconductor companies in China. How to judge which companies are really worth investing in? How to consider the exit of investment in semiconductor industry?

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Round Table 2: Semiconductor Financing Voice




Zhuo Hongjun, Secretary-General of Beijing Semiconductor Industry Association, Yang Tsinghua, Chairman of China Science and Technology Hanxia, Wang Shaodi, CEO of Zhicun Science and Technology, Wang Haili, founder of Qingwei Intelligence, and Moore Elite CEO Zhang Jingyang argue that around the current development situation and financing situation of semiconductor enterprises, whether it is difficult for Beijing Semiconductor Financing Environment? In the context of Sino-US trade, how do start-ups respond and what support do they want from investment institutions and governments? In addition to financing, what are the biggest difficulties encountered in the process of enterprise development? What are the suggestions for the government's industrial policy on R&D and talent? Some problems were discussed.





Summary





Semiconductor industry is very difficult to invest, and the professional threshold is high. Heneng Investment, as a top investment bank focusing on China's new economy, provides comprehensive financial services for new economic enterprises for a long time. Hanneng has invested in building a strong semiconductor industry group, bringing together professionals with both semiconductor industry and financial background to help build the semiconductor industry ecosystem. In the golden age of semiconductor investment in China, investors should stick to the "hunting ground" of semiconductor and have a keen sense of smell like hunters. Once the target appears, they should attack quickly.